This advisory is intended to provide an introduction into the main features of Jersey limited partnerships and the Jersey legislation relevant to the operation of such partnerships. It is not intended to provide a comprehensive guide and further advice should be sought in relation to specific transactions.

Advantages of Jersey

Jersey is the premier offshore jurisdiction of choice for many global corporations and financial institutions, and lead onshore counsels. Its enviable position owes much to the excellent quality of its service providers and its flexible and well-developed legal and regulatory framework. The provision of corporate and finance advice and related services represents the core business of Walkers globally and is the primary focus of the Jersey office.

Benefits of using a Jersey limited partnership

Limited partnerships are often used for the purposes of tax and financial planning because they are tax transparent, ensuring tax neutrality for the limited partners who are subject to tax in accordance with the rules of their own jurisdictions. Additional benefits of Jersey limited partnerships include the limited liability afforded to its limited partners. In addition, the Jersey partnerships law is very flexible, such that the partners in a Jersey limited partnership are free to agree the terms attaching to the structure and operation of the partnership between them. For this reason, Jersey limited partnerships are very popular vehicles and common uses include investment funds, real estate and asset holding vehicles and investment structures.

Formation of Limited Partnerships


A limited partnership is a partnership between one or more persons who are "general" partners (who manage the partnership and have unlimited liability) and one or more other persons who are "limited" partners (passive investors who have no involvement in the day to day running of the partnership and have limited liability). Jersey limited partnerships are established pursuant to the Limited Partnership (Jersey) Law 1994, as amended (the "Partnerships Law").

Regulatory consent

The consent of the Jersey Financial Services Commission (the "JFSC") pursuant to the Control of Borrowing (Jersey) Order 1958 (as amended) must be obtained in order to create interests in a Jersey limited partnership (or to raise money in Jersey by the creation of interests in any limited partnership).

An application for consent must be made to the JFSC, providing information on the nature and purpose of the limited partnership, the general partner(s) (and the beneficial owners(s) of any corporate general partner(s)) and the nature of the limited partner(s).

Establishment and Registration

Under the Partnerships Law, a Jersey limited partnership must be registered in Jersey by delivering to the registrar of limited partnerships in Jersey (the "LP Registrar") a declaration in respect of the partnership signed by each person who will be a general partner on its formation. The declaration will include the following details for submission to the LP Registrar:

  1. the name of the limited partnership;
  2. a registered office address; and
  3. details of the general partner(s) – including, the full name and address of each general partner, who is a natural person, or the place of incorporation and registered or principal office in the case of any company acting as a general partner.

It is common to appoint a corporate services provider in Jersey to establish a Jersey limited partnership and its general partner, provide a registered office (which the limited partnership must have in Jersey), fulfil the role of a nominated person and to attend to the ongoing Jersey filings (such as tax return filings with Revenue Jersey and statutory filings with the Jersey Registry) on behalf of the Jersey limited partnership and its general partner.

Legal Personality

A limited partnership does not have its own legal personality separate from its partners. The general partner, in its capacity as general partner of the limited partnership, acts and contracts on behalf of the limited partnership. A limited partnership will automatically dissolve in the absence of a general partner.

General Partners

The general partner of the limited partnership is responsible for the management and administration of the limited partnership in accordance with the terms of the partnership agreement. Partnership property acquired or held in the name of the limited partnership or by or on behalf of any one or more of the general partners must be held or deemed to be held by the general partner(s) as an asset of the limited partnership in accordance with the terms of the limited partnership agreement.

The debts or obligations incurred by a general partner in conducting the activities of a limited partnership are debts or obligations of the limited partnership. A general partner is liable for the debts and obligations of the limited partnership if the assets of the limited partnership are insufficient to discharge the debts and obligations of the limited partnership.

Limited Partners

A limited partner in the limited partnership has no authority or power to bind the limited partnership. Subject to the terms of the limited partnership agreement, the liability of a limited partner for the debts of the limited partnership is limited to the difference (if any) between the value of the money or other property contributed by them to the limited partnership and the value of the money or other property that they have agreed to contribute to the limited partnership.

A limited partner may lose its limited liability where such limited partner participates in the management of the limited partnership in its dealings with third parties who reasonably believe, based on the limited partner's conduct, the limited partner to be the general partner of the limited partnership. Helpfully, however, there are extensive safe harbour provisions in the Partnerships Law comprising a nonexhaustive list of activities which a limited partner may participate in or carry out and which do not constitute participating in the management of the limited partnership.

Limited partners can only be admitted to a limited partnership to the extent allowed by the limited partnership agreement. Admission must be made by way of entry in the partnership's register of limited partners.

Contributions and return of capital

A limited partner's contribution to the limited partnership can be in the form of money, any property or services. The Partnerships Law does not prescribe how contributions are made, drawn down or returned to limited partners during the life of the limited partnership and the partners are free to agree such terms, as well as those relating to distributions from the limited partnership within the partnership agreement (as long as the limited partnership is solvent when approving a distribution).

Transfer of interests

A limited partner can only transfer their partnership interest or any part of it, if permitted to do so by the limited partnership agreement, or if all the partners consent to the assignment and the assignment is made in accordance with the terms of the limited partnership agreement or the consent, as the case may be.

General Administration


A limited partnership is required to keep accounting records sufficient to show and explain its transactions and disclose with reasonable accuracy its financial position at any time but its accounts do not have to be audited unless required by the terms of the limited partnership agreement or any other applicable legislation or regulations.

Annual confirmation statement

The general partner must file an annual confirmation statement in respect of the limited partnership before the end of February in each year confirming that the details held by the Registry are accurate (in particular, in respect of the partnership's registered office, its general partner and the limited partnership status (eg continuing or in wind up). The general partner must notify the LP Registry of changes to the beneficial owner, controller or significant person information within 21 days.


The Partnerships Law requires copies of the register of the limited partners (including their contributions), the declaration of limited partnership and the limited partnership agreement (including any amendments thereto) to be kept at the limited partnership's registered office.

Jersey tax treatment of limited partnerships

Limited partnerships are not legal persons and are therefore not taxable entities and they are tax transparent for the purposes of Jersey tax. Limited partners are subject to tax in accordance with the rules of their country of residence. There is no withholding or similar tax required to be deducted from income or capital distributions to limited partners in the limited partnership.

The general partner will not be subject to Jersey tax on its income or capital gains in Jersey (other than at a rate of 0%) by virtue of the performance of its function as a general partner registered in Jersey.

Non-Jersey tax resident limited partners in a Jersey limited partnership are not subject to Jersey income tax or any withholding tax on their share of partnership profits or gains arising from business or investment activities carried on outside Jersey. A limited partner who is not a resident of Jersey will only be liable to Jersey tax in respect of Jersey source income (other than, Jersey bank interest, pursuant to the Income Tax (Jersey) Law 1961). Jersey source income includes profits from a trade carried on in Jersey but excludes profits from international activities, that is, business activities carried on outside Jersey.

A limited partner who is resident in Jersey for taxation purposes will be liable for Jersey income tax on its proportionate share of the income of the limited partnership whenever, and from whatever source, it arises. Such limited partners must report any such income when making their annual tax returns. That partner's share of profits will be taxed at the standard rate of Jersey income tax of 20%.

There is no stamp duty in Jersey on issues or transfers of limited partnership interests. However, Jersey stamp duty is payable on the value of the partnership interests at rates of up to 0.75% (subject to a cap on liability of £100,000) upon the registration of a grant of probate or letters of administration which will be required in order to transfer the partnership interest of a deceased individual sole limited partner. There is no capital gains tax, estate duty or inheritance tax in Jersey.

Regulatory requirements

Economic Substance

The economic substance regime for Jersey limited partnerships is captured in the Taxation (Partnerships – Economic Substance) (Jersey) Law 2021 (which came into force with effect from 30 June 2021, bringing partnerships into scope) (the "Partnerships Substance Law") (together the "Substance Laws").

A partnership will be caught within the scope of the economic substance regime if it is a "resident partnership" which carries on one or more "relevant activities" and receives gross income from the relevant activity. The relevant activities falling within the scope of the economic substance regime include:

  1. banking business;
  2. insurance business;
  3. shipping business;
  4. fund management business;
  5. financing and leasing business;
  6. headquartering business;
  7. distribution and service centres business;
  8. operation of a holding company; and
  9. holding intangible property.

A company or limited partnership which carries on fund management business, is one which provides fund management services to a fund (including a collective investment fund or a Jersey Private Fund), with respect to its investments and risk decisions. It does not include the provision of other services to a fund, such as administration or registered office services. Limited partnerships which act as fund vehicles are exempt from the Partnerships Substance Law. Accordingly it is the functionary acting as the decision-maker of the fund (such as a general partner, managing trustee or investment manager) to which the substance laws normally apply.

A limited partnership will be a "resident partnership" if certain conditions are met, but being "resident" for substance purposes does not cause the partnership in question to be taxable person in Jersey – limited partnerships continue to be transparent for Jersey tax purposes. A Jersey law governed partnership will generally be treated as resident in Jersey unless its "place of effective management" ("POEM") is in a jurisdiction where the limited partnership is subject to a substantially similar economic substance regime or the highest rate of income tax of any person is at least 10%. A limited partnership's POEM is where the key management and commercial decisions necessary for the conduct of its business are taken. A non-Jersey partnership is resident in Jersey if its POEM is in Jersey.


By way of overview, a limited partnership may be dissolved by:

  1. an act of the partners:
  2. absence of a general partner: winding up of a limited partnership must commence where the sole or last remaining general partner becomes bankrupt or withdraws from the limited partnership. Similarly where the last remaining general partner is an individual and dies, becomes legally incapable to transact or retires from the partnership or is a body corporate and itself is dissolved. A limited partnership is not required to be wound up under if, within 90 days of the commencement of the winding up, the limited partners, either unanimously or as otherwise provided for in the partnership agreement, elect one or more general partners;
  3. an order of the Royal Court in Jersey: on the application of a partner, the Royal Court in Jersey may order the winding up on a limited partnership if it is satisfied that:
    1. the limited partnership is being conducted in a manner calculated or likely to affect prejudicially the carrying out of the limited partnership's activities;
    2. the limited partnership is being conducted in a manner oppressive to one or more of the limited partners; or
    3. circumstances have arisen that render it just and equitable that the limited partnership be wound up.

The dissolution of a limited partnership takes effect upon the cancellation of registration of the declaration of the limited partnership being registered by the LP Registrar.

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.