A Jersey exempt company, owned by non residents, is the most common form of company used by offshore investors. Exempt companies pay an annual exempt company fee of Ł600 but otherwise are not subject to any other Jersey taxes, except in respect of Jersey source income other than bank deposit interest. Jersey exempt company status is also available to companies incorporated outside Jersey.
Dividends and interest paid by an exempt company bear no local withholding tax and can be made entirely free of exchange control or other constraints. Similarly, directors' fees and salaries payable to non residents are exempt from local taxation, whether directors' meetings are held in Jersey or elsewhere.
An International Business Company ("IBC") may be a Jersey company, a foreign company controlled and therefore resident in Jersey or a Jersey branch of a non resident company. An IBC status will be appropriate to those companies which wish to carry on an international trade or business in Jersey. International business profits are taxed at rates ranging from 1/2% to 2%. An IBC may elect to treat bank deposit interest as profits derived from international activities and therefore taxed at the rates above. Otherwise Jersey bank interest and other income is taxed at 30%. The tax rates, agreed when the IBC proposal is submitted to the Jersey authorities, provides full flexibility to meet any requirements of the parent company or other jurisdictions. Any company starting or increasing international business would be strongly advised to consider the possible advantages of using a Jersey IBC in any structure.
Companies incorporated in Jersey are subject to the Companies (Jersey) Law 1991. There are no rules about thin capitalisation nor are there any restrictions on shareholder loans. There is no necessity for banking to be in Jersey and there are no unexpected restrictions on the composition of the board of directors.
COMPANY SERVICES PROVIDED INCLUDE:
Arranging the incorporation of companies in Jersey and other jurisdictions.
Provision of directors and company secretary.
Provision of registered office for Jersey companies, and to maintain confidentiality, nominee shareholders.
Maintenance of statutory records.
Administration of company assets and investments.
Maintenance of accounting records and preparation of periodic and annual accounts.
Preparation of invoices and statements for trading companies.
Preparation of management accounts and cash flow statements for management control and borrowing proposals.
Investigation and insolvency work.
Winding up companies in the most efficient way to end their useful life.
EXAMPLES OF OFFSHORE COMPANY VEHICLES INCLUDE:
Underlying a Trust for Asset Holding Structures.
Patent and Royalty Companies.
Investment and Asset Holding.
Ship, Aircraft and Vehicle owning Companies.
Cross Border Trading Structures.
International Business Companies: providing international treasury finance or group financing activities, benefiting from participation exemption, for example as applied in the Netherlands or Luxembourg. operating as a Jersey branch of a foreign company.
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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