Jersey companies are proving increasingly popular with Chinese
businesses considering listing in London. Ogier recently acted for
Naibu, the 10th largest local sportswear brand in China, on its
£68m listing on the AIM Market. Naibu Global International
Company plc, incorporated in Jersey, joins a number of other high
profile Jersey companies already listed on the London Stock
Exchange. Naibu designs, manufactures and supplies Naibu branded
clothing and accessories through 2,800 Naibu stores and sales
outlets across China.
Jersey holding companies as listing vehicles
Jersey incorporated companies are attractive to both investors
and the companies themselves for a number of reasons, not all of
which are comparable in other jurisdictions.
Jersey is a politically stable jurisdiction with a global
reputation as a first class international finance centre and has a
proven track record for attracting investment from around the
world. it was designated by the OECD as a 'white listed'
jurisdiction and is an OECD issuer territory, which means a wider
pool of investors can participate in IPOs and the highest standards
of corporate governance can be achieved.
Chinese businesses with an international reach can derive a real
advantage from their holding company being incorporated, managed
and controlled in a tax neutral jurisdiction:
In Jersey there is no corporation tax, no capital gains tax and
no capital transfer tax.
There is no requirement for a Jersey company to make any
withholding or deduction on account of Jersey tax in respect of
dividend or interest payments.
No stamp duty or similar taxes are payable on the issue or
transfer of a Jersey company's shares.
A Jersey company may elect not to be resident for tax purposes
and be exclusively tax resident elsewhere. The effective rate of
taxation then will be dependent on the chosen jurisdiction.
In summary, companies formed as listing vehicles can expect to
pay no income tax in Jersey, whether or not they are tax resident
Jersey company law
As well as offering a potentially extremely favourable tax
environment, Jersey's corporate laws also appeal to businesses
and investors alike:
They are familiar: Jersey companies law is to a large extent
modelled on English law.
They are flexible: Jersey law is generally more flexible than
its English counterpart. in addition, Jersey offers the following
advantages in the context an IPO:
The ability to list shares directly on the London stock
exchange (as opposed to only depositary receipts, which adds to the
cost of a structure) and to trade shares directly through CREST
(the UK share settlement system).
Jersey companies can use the letters 'PLC' at the end
of their names - just like their UK counterparts.
Jersey companies are eligible for inclusion in exchange
indices, for example FTSE 100/250.
Takeover Codes: The UK City Code on Takeovers and Mergers
applies to companies listed on London's main market and to
other Jersey public companies that are centrally managed and
controlled in Jersey. This is a key shareholder protection.
Jersey is a tried and tested jurisdiction for IPOs on
international exchanges around the world. We expect to see
increasing demand for AIM listings for Chinese businesses following
the Naibu example, particularly as AIM offers a cost-effective and
often faster listing process than many other international
We also anticipate growing demand for European 'trophy'
assets seeking listings in the Far east to tap into strong consumer
demand in those markets. Jersey is well placed as the jurisdiction
of choice for incorporating the listing vehicle for such companies
given its familiarity in Europe and the fact that it is acceptable
to the leading international exchanges in Asia.
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.
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