By Joe Moynihan President of the Jersey Bankers Association
Managing Director, AIB Bank (CI) Limited
Jersey has an excellent reputation in the banking industry with
45 banking license holders, including branches and subsidiaries of
some of the world's leading banks.
These banks come from the United Kingdom, Europe, the United
States, Canada, South Africa and the Gulf. Banks are attracted to
Jersey thanks to its political and economic stability and its legal
and regulatory environment. With a history of providing banking
services to clients all over the world for almost 50 years, Jersey
is truly one of the world's top international finance
As banks and their clients expand their businesses
internationally, there is a requirement to provide services from
jurisdictions that can facilitate efficient international financial
services in a tax neutral environment, which simplifies investments
for non residents. Jersey is such a location.
Jersey banking services have been catering for the needs of
'internationally mobile' individuals for many years.
Products and services have been specifically designed for this
client base. As private wealth has increased generally over the
years and individuals have relocated and/or sought to invest in
other jurisdictions, the banking industry has adapted to meet those
needs. The use of offshore investment vehicles such as hedge funds
and private equity have placed further demands on Jersey banks, who
have responded with increasingly sophisticated products and
For Chinese banks seeking to expand their businesses globally to
assist their clients, the opportunities provided by Jersey should
not be ignored. As clients relocate, or businesses invest into new
jurisdictions, there are many ways in which a Jersey presence can
assist in terms of retaining clients and in identifying further
Setting upin Jersey
Under Jersey regulations only banks in the world's top
500 or banks of systemic importance in their country of origin are
allowed to operate from the island. Should a bank wish to consider
setting up an operation in Jersey, there are a number of options
It is possible to set up a wholly owned subsidiary in Jersey.
This option has been used by many banks and involves setting up a
Jersey company, requiring capital. This would normally involve
acquisition of premises, staff etc.
Another option is to set up a Jersey branch of the parent bank.
The branch does not have the same level of corporate governance
overhead and does not require capital. This would usually entail a
physical presence with staff, premises etc.
Jersey based businesses are used for joint ventures,
collaborations and partnerships. It would be possible for a Chinese
bank to enter into an arrangement whereby clients are introduced
and become clients of another Jersey bank, in order to
'test' the market. Should the Chinese bank then decide to
set up an operation, clients would be invited to transfer accounts
to the bank.
Jersey regulations also provide facilities for banks to operate
as 'managed banks'. This means that an existing Jersey bank
acts as 'manager' of the Jersey bank/branch, taking
responsibility for the operation. This arrangement is often
suitable for 'start up' situations and may result in
conversion to full bank arrangements in the future if
Chinese banks considering opportunities in Jersey should contact
Jersey Finance to arrange introductions to the Jersey regulator and
meetings with other professionals in the industry. The Jersey
Bankers Association, which supports the strong and diverse banking
industry, would also be happy to assist.
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).