No we don't mean New Jersey in the US we're referring to the British Channel Islands just off the coast of France. Jersey and Guernsey both (Alderney and Sark also fall into the same basket but are too small to refer to on their own so we'll focus on the big two) fit into a very limited category of jurisdictions within the world. These are zero tax jurisdictions that compete on reputation. That is to say their attitude is they are aware zero tax jurisdictions are frequently used for tax evasion, money laundering, etc. and their attitude is to be whiter than white in their reputations and transparency. The other two main contenders are Bermuda and Isle of Man with Gibraltar and a couple others playing a similar role but to a lesser extent.
Jersey and Guernsey are both effectively members of the European Union via their affiliation with UK but unlike Isle of Man are not a part of the VAT Directive.When the business makes sense to be located there I'm a big fan.
Let's start with the basics:
In most cases they are 0% tax (there is technically what's called a 0/10 regime but the 10% tax rarely applies to offshore companies)
No requirements to file audited financials (you'll hear me harp on this a lot as it increases maintenance expenses quite a lot when audited accounts are required) in fact generally no filing requirements at all, there is an audit requirement in Guernsey but there are also exceptions
Company formation is even more arduous than in Gibraltar as part of the desire to many the jurisdictions clean and white with a great reputation
Local banking is available in Jersey for companies but banks are very strict and the environment is changing a lot meaning many companies won't get accepted and local management is generally required for acceptance with only a few exceptions
Corporate directors and shareholders are an option and records are not public though must be maintained at the registered office
While company formation can in theory be completed within a day in practice the due diligence process generally means it takes much longer
A variety of company types are available depending on the nature of the businessIn general Jersey and Guernsey are very similar. That being said I prefer Jersey 99 times out of 100 over Guernsey. Why?Jersey is slightly cheaper to form a company typically around 500 GBP (typically Jersey formation costs are around 1750 GBP and over 2000 GBP in Guernsey).
Jersey has lower operational challenges in terms of potential audit requirements, etc. making it simply easier and more cost effective to maintain a Jersey company in most cases.Jersey is the larger of the two islands with slightly more people and infrastructure, in particular more established banking, which gives a minor advantage on the challenging international banking front.Although different in their own ways they are both very similar to Isle of Man from an offshore perspective.So what's unique?Zero Tax RegimeWhile it is possible to structure zero tax companies within Europe Jersey, Guernsey and Isle of Man are the only truly zero tax jurisdictions within Europe. What does this mean?Two things primarily: A company can be genuinely tax resident on its own in the jurisdiction and have a 0% corporate tax rate Operations can take place locally and even though the income is domestic source income it can remain 0% taxThis later point is extremely important because although it's frequently possible to have a non-resident and consequently 0% tax company in a few other jurisdictions such as Cyprus and Gibraltar or use some careful structuring to reduce the taxable income to zero in jurisdictions such as Malta in each of those cases and in almost any jurisdiction on the planet domestic source income is taxable.In other words Jersey, Guernsey (and Isle of Man) are great places to set up a local operation from a tax perspective (there are other factors of course such as operational costs, infrastructure, availability of local skilled labor, etc.)
Jersey and Guernsey are both effectively members of the European Union via their affiliation with UK but unlike Isle of Man are not a part of the VAT Directive.When the business makes sense to be located there I'm a big fan.
Let's start with the basics:
In most cases they are 0% tax (there is technically what's called a 0/10 regime but the 10% tax rarely applies to offshore companies)
No requirements to file audited financials (you'll hear me harp on this a lot as it increases maintenance expenses quite a lot when audited accounts are required) in fact generally no filing requirements at all, there is an audit requirement in Guernsey but there are also exceptions
Company formation is even more arduous than in Gibraltar as part of the desire to many the jurisdictions clean and white with a great reputation
Local banking is available in Jersey for companies but banks are very strict and the environment is changing a lot meaning many companies won't get accepted and local management is generally required for acceptance with only a few exceptions
Corporate directors and shareholders are an option and records are not public though must be maintained at the registered office
While company formation can in theory be completed within a day in practice the due diligence process generally means it takes much longer
A variety of company types are available depending on the nature of the businessIn general Jersey and Guernsey are very similar. That being said I prefer Jersey 99 times out of 100 over Guernsey. Why?Jersey is slightly cheaper to form a company typically around 500 GBP (typically Jersey formation costs are around 1750 GBP and over 2000 GBP in Guernsey).
Jersey has lower operational challenges in terms of potential audit requirements, etc. making it simply easier and more cost effective to maintain a Jersey company in most cases.Jersey is the larger of the two islands with slightly more people and infrastructure, in particular more established banking, which gives a minor advantage on the challenging international banking front.Although different in their own ways they are both very similar to Isle of Man from an offshore perspective.So what's unique?Zero Tax RegimeWhile it is possible to structure zero tax companies within Europe Jersey, Guernsey and Isle of Man are the only truly zero tax jurisdictions within Europe. What does this mean?Two things primarily: A company can be genuinely tax resident on its own in the jurisdiction and have a 0% corporate tax rate Operations can take place locally and even though the income is domestic source income it can remain 0% taxThis later point is extremely important because although it's frequently possible to have a non-resident and consequently 0% tax company in a few other jurisdictions such as Cyprus and Gibraltar or use some careful structuring to reduce the taxable income to zero in jurisdictions such as Malta in each of those cases and in almost any jurisdiction on the planet domestic source income is taxable.In other words Jersey, Guernsey (and Isle of Man) are great places to set up a local operation from a tax perspective (there are other factors of course such as operational costs, infrastructure, availability of local skilled labor, etc.)