Jersey for
Private Equity
OVER
12,500
FINANCE PROFESSIONALS INCLUDING HIGHLY SKILLED AND EXPERIENCED FUND SPECIALISTS
US$356 BILLION NET ASSET VALUE OF FUNDS UP 38% SINCE 2009
Jersey is a world renowned international finance centre and home to a wealth of professionals. The successful combination of stability and reliability has kept Jersey at the forefront of global finance for over half a century.
Thanks to its approach to EU regulation, Jersey is affirming its position as a leading domicile for alternative funds businesses in Europe, particularly in the private equity and real estate arenas. For the year to 30 June 2014 Jersey has seen an increase in the AUM of Jersey domiciled private equity funds of 67.5% and for real estate funds of 35.1%.*
Jersey’s economy is stable and Standard and Poor have awarded Jersey one of the best credit ratings it awards (‘AA+ / A-1+ long and shortterm sovereign credit rating, with a stable outlook’).
Substance
Jersey for Funds
Jersey’s concentration of fund expertise, structuring capability and robust but flexible regulation is increasingly attracting managers interested in relocating all or part of their business. Jersey has seen a significant increase in Jersey based fund promoters over the past five years.
230K 210K 190K 170K 150K
2009
2014
123 JERSEY BASED FUND PROMOTERS UP 76% SINCE 2010*
Jersey has long held significant appeal for the management and administration of alternative funds. It has attracted a significant number of hedge, private equity, venture capital, mezzanine and real estate funds and built up an experienced range of fund administrators, both as part of the services supplied by major custody banks and large specialist fund administration firms and by boutique groups who can provide more bespoke services to meet individual investor needs.
317
Jersey has a visible financial industry. It is highly regarded internationally as a stable and strong corporate jurisdiction with a high standard of regulation. The Jersey Financial Services Commission (JFSC) is considered to have one of the best reputations of any jurisdiction.
Managers can draw on Jersey’s deep experience in fund administration, asset servicing, tax advice and accounting, and have fast access to real governance expertise. There is a long standing ability for Jersey to field local directors and officers of management entities with risk and portfolio management skills.
*Monterey Insight – Jersey Fund Report 2014
SINGLE CLASS PRIVATE EQUITY FUNDS MANAGING IN EXCESS OF
US$69 BILLION LONDON 45 mins
ENGLAND
AA+ CREDIT RATING
WITH STABLE OUTLOOK
BRUSSELS 1hr 10 mins
FRANKFURT 1hr 55 mins
JERSEY PARIS 1hr 20 mins
FRANCE
GENEVA & ZURICH 1hr 45 mins
SUNNIEST PLACE in the British Isles
350 MILES
of stunning coastal paths
OVER 200
Bars and restaurants
6 GOLF COURSES
+ a championship Rugby team
Flexibility of fund vehicles Jersey funds may be established as companies, unit trusts or more commonly for private equity, limited partnerships and separate limited partnerships. Jersey Limited Partnerships have several advantages, including no upper limit on the number of limited partners, and partner confidentiality can be maintained. Funds may be open or closed ended, providing significant flexibility for investor needs.
Regulation of Funds and Managers Jersey offers a full spectrum of fund regulation, from highly regulated recognised funds which may be marketed widely to the general public to unregulated funds which fulfil certain criteria and therefore are exempt from Jersey regulatory requirements. The JFSC can, for certain funds, provide authorisation within just three days. Managers domiciled in Jersey are required to be regulated by the JFSC and the approval process consists of: • The completion of a form where infomation relating to the manager’s business is provided to the JFSC.
This includes, in summary ownership structure, financial information, outsourcing policy and the names of principals;
option that is fully compliant with AIFMD, providing managers with the flexibility to market to investors both inside and outside the EU.
• Demonstrating relevant experience of managing funds and that the manager is actively managed by at least two (where the manager is not handling client monies) or at least three (where the manager is handling client monies) experienced individuals.
Over 185 Jersey funds and over 55 Jersey managers are already actively marketing into the EU with authorisation from the JFSC.
Audited accounts must be provided to the JFSC and the manager must comply with a prescribed set of codes of practice.
In the new era of tax transparency, Jersey has fully embraced international standards of exchange of information principles, has signed inter-governmental agreements with both the US and UK and is a member of the early adopters group for the Common Reporting Standard, an OECD initiative intended to standardise automated exchange of information between countries for tax reporting purposes. A single standard for automatic exchange of information on a non-discriminatory basis will further enhance Jersey’s competitive position.
FATCA and Global Tax Information Exchange
AIFMD Jersey’s strategy is to have the right frameworks in place to continue to provide fund establishment, management and administration services on a business as usual basis following the commencement of the AIFMD. Under the AIFMD Jersey has the status of a ‘third country’ non-EU jurisdiction. Additionally, Jersey has introduced the option of a fully AIFMD-compliant regime and obtaining an EU-wide passport as soon as the passport becomes available to non-EU third countries.
Base Erosion and Profit Shifting Agenda Jersey, with its transparent and easy to understand tax regime is well positioned to deal with the challenges faced under the BEPS Action Plan, and with a wealth of highly skilled private equity focused individuals with a huge amount of industry experience.
Combined, this range of options means that Jersey continues to operate its existing fund regime while at the same time offering an
ns:
The EU through National Private Placement Regimes
ENT
M VE INVEST
COLLECTI
CONTROL OF BORROW ING
NOTIF
ICATIO
The ‘rest of the world’ only
N ONL Y
ds Listed Fun Expert Funds Private Placement Funds Very Private Funds Exchan ge Trad ed Fun Eligib ds le Inv estor Fund s
RTIONATE PROPO
A JERSEY MANAGER CAN ESTABLISH DIFFERENT JERSEY FUNDS TO ACCESS:
+
ULATION REG
ptio o d n of fu m s Fund ctru e ised p n g s o ll Rec unds sified F a fu Unclas
-
SKILLED WORKFORCE approx. 99,000 population
EXCELLENT
healthcare & schools
QUICK & EASY commuting
OUTSTANDING natural beauty
granted. Subsequent increases in value are not taxable in Jersey. There is also no stamp duty on the transfer of shares and social security liabilities are substantially smaller than other jurisdictions.
Tax Regime in Jersey
Immigration
Taxation of Business Profits – stable and predictable A fund, whether established as a company, unit trust or limited partnership, is not generally subject to any local Jersey tax. The general rate of tax for corporate entities in Jersey is 0%. Certain regulated financial activities are taxed at 10%. This includes banks, trust companies, investment managers and certain fund functionaries undertaking custodian and administrator functions. Partnerships and Unit Trusts are tax transparent investment vehicles. Fund management business is taxed at 0%.
Personal Tax – low taxation with certainty Only income is subject to tax. There is no capital gains, inheritance or wealth taxes. The general rate of income tax for residents in Jersey is 20%. High net worth individuals relocating to the island can effectively cap Jersey income tax liabilities at £125k per annum. Dependent upon how long executives are due to spend in the jurisdiction, it may be possible to structure their affairs to ensure that only Jersey source income rather than worldwide income is subject to tax in Jersey. Non-resident investors are generally not subject to Jersey tax.
Employee share schemes The taxable element of employee share schemes in Jersey is restricted to any discount received when the incentive is
1,446
COLLECTIVE INVESTMENT FUNDS
www.linkedin.com/company/jersey-finance
Jersey is very keen to encourage reputable new business and the authorities will support such businesses moving to the jurisdiction. It is necessary for the manager to obtain a licence to establish a business and take on employees in Jersey. This can be processed at the same time as the regulatory application. The decision as to whether or not to grant a licence is made with regard to the need to regulate and manage demand on Jersey’s resources, including the expected contribution of a business towards Jersey’s economy. In relation to the employment of professionals, where the required skill-set cannot readily be found in Jersey, it is possible for an application to be made for the post to be filled by ‘essentially employed’ individuals. This allows a business to recruit the necessary persons from outside Jersey. There are no travel restrictions into Jersey for those who hold British passports or are from an EU Member State. No work permit is required if you are a British Citizen or a national of a Member State of the EEA.
Conclusion Flexibility, expertise and clarity are absolutely key for private equity managers and Jersey is extremely well placed to offer these qualities and provide managers with a compelling, long-term and future-proof solution.
WITH A NET ASSET VALUE
US$356 BILLION
@jerseyfinance
HOME TO SOME OF THE WORLD’S LARGEST FUND ADMINISTRATION PROVIDERS
www.youtube.com/jerseyfinance