Jersey: The Autumn Migration – Channel Islands As A New Home For Fund Managers

Last Updated: 6 December 2011
Article by Andrew Weaver

In April 2010, the United Kingdom introduced a 50% income tax rate for higher earners. In July 2011, the Alternative Investment Fund Managers Directive ("AIFMD") was formally adopted as European law; it is to be transposed into national law by EU member states no later than July 2013.

As well as substantially increasing regulatory compliance requirements for fund managers in Europe, the AIFMD also imposes remuneration restrictions on fund management professionals. At a national level in Europe, regulation and compliance is increasing and states are seeking to reduce government spending whilst also to enhance revenue-raising measures, both in respect of income and capital.

There have been many reports in the press over the last year or two about the potential for increasing tax and regulation in international financial centres, causing a migration of talent in the fund management industry. For some time many policy makers did not heed this, taking a Christine Keeler approach - "they would say that wouldn't they". Based on the activity we have seen in the Channel Islands recently, there is in fact a very real migration from the cold hard winter of stifling regulation, high taxes and austerity to the summery shores of locations which combine appropriate regulation balancing investor protection with entrepreneurialism, sensible levels of taxation and a comfortable lifestyle.

Channel Islands Attraction

The Channel Islands are attractive to these migrant managers, for the same reasons that are the grounding for the Channel Islands' success as international financial centres. The first of these is stability, which has permitted the growth of a diverse financial services industry in the Islands, exporting expert, high value services throughout the world. Nurturing this is a long-established principle of appropriate prudential regulation (accompanied by the introduction of modern tools for regulatory supervision). Finally, a long-held recognition for fair taxes and effective government can permit both innovation and development, whilst also supporting the weak and most vulnerable in society.

Apart from the Nazi occupation of the Islands during World War II, the Channel Islands have been a stable, safe environment closely connected with the British crown since 1204. Even before the Second World War, Jersey was developing as a safe haven for wealth preservation. Strong, long-lasting relationships with the United Kingdom and more recently with European governments and those further afield have long been promoted based on a sense of co-operative self-reliance.

Well Regulated

Financial services regulation has a deep-rooted base in Jersey. Even before the introduction of the Collective Investment Funds (Jersey) Law 1988, the financial services regulator in Jersey used powers under the Control of Borrowing (Jersey) Law 1947 (as it is now known), to regulate investment funds and their service providers in Jersey. The development of the Financial Services (Jersey) Law 1998 and its extension in 2007, to fund services providers, has given the regulator modern and effective tools for regulation of the funds industry. A willingness to co-operate internationally and the implementation of these high standards has established Jersey as a well regarded financial centre.

Jersey is a third country for the purposes of the AIFMD, and the expectation is that the introduction of the directive will allow the Island unrivalled access to European markets, whilst also satisfying the requirements of the European Union for supervision. The approach of the regulator is one of adequate but not over-intrusive or prescriptive regulation which will allow innovation without compromising in quality and standards. Regulation is principles based and the regulator is flexible enough to recognise that different business models may demonstrate compliance in different ways.

Tax Benefits

Jersey is not a zero-tax jurisdiction. Income tax is charged on local residents at 20%, a rate that has not changed for over 50 years. Wealthy immigrants are subject to a specific "1(1)(k)" tax scheme which has recently changed to encourage more immigration. In response to international encouragement, corporate income tax is zero rated, save in respect of certain financial services businesses and utilities. Migrating fund managers will typically experience the zero rate at a corporate level. In line with many countries, Jersey does not seek to tax capital or income in investment funds, taking a tax neutral approach allowing effective global allocation of capital. Jersey has a well developed social security system to look after the weakest in its own society and also contributed over 0.2% of its gross national income in overseas aid in 2010, a very substantial contribution rate.

Enviable Lifestyle

When coming to the Island a migrating fund manager will find a sophisticated, international society, stable and confident, with an international outlook keen to take its place in the world. Services are modern and sophisticated, an enviable lifestyle is available with high quality schooling, excellent sporting facilities, a wide array of beaches and internationally regarded restaurants, and access to the UK and Europe is an easy, short flight or ferry-ride away.

Jersey's government is keen to encourage inward investment and the establishment in the Island of enterprises which have both a small footprint (in terms of demand for both human capital and other resources) and provide high value services. Typically fund managers are a perfect fit. Incentives may be available and there is a designated government representative to assist high value migrants through the process of local licensing, business establishment and establishing a home.

In conclusion, for those fund managers finding that they are currently facing the prospect of a winter of increased regulation and taxation, it may be time to consider a migration south to a welcoming business friendly environment.

As originally appeared in Finance, Offshore – Autumn 2011

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.