Knowledge

This briefing provides an overview of the various regulatory frameworks in place that work towards making Jersey an economically secure and internationally recognised jurisdiction, including its tax, regulatory and data protection regimes.

Tax regime

The tax regime in Jersey is separate from that of the United Kingdom. The States Assembly, the island's independent parliament, sets out the island's own legislation and policy and the island is self-funded.

Tax rates in Jersey have historically been low. Standard corporation tax in Jersey is 0%, although all companies must file an annual tax return. A rate of 10% may be applicable to businesses conducting certain regulated activities, including some banking, fund administration and insurance business, and a rate of 20% applies to certain businesses, such as telecommunications, gas supply and large retail businesses.

Importantly, financial services businesses are generally not subject to capital gains, value-added or sales taxes.

The island has taken steps to ensure that these relatively low tax rates do not conflict with international tax standards. Jersey is 'whitelisted' for tax purposes by both the Organisation for Economic Co-operation and Development (OECD) and the European Union (the "EU"), whilst also maintaining domestic measures to prevent tax avoidance.

Tax reporting

From an international perspective, Jersey adheres to the US Foreign Account Tax Compliance Act ("FATCA") as well as the Common Reporting Standard ("CRS"), demonstrating its commitment to global tax transparency initiatives and the prevention of cross-border tax evasion. 

Under FATCA and CRS, financial institutions in Jersey (including banks, investment funds and trust companies), must meet reporting and due diligence requirements where an entity is controlled by a US citizen or resident, or any other resident of a CRS-compliant jurisdiction. Reporting must be completed annually, and the information is then exchanged with the Internal Revenue Service in the US or the relevant body in CRS countries.

The island has also signed Tax Information Exchange Agreements with 38 states to facilitate the exchange of relevant information between tax authorities. A full list of the states that Jersey has TIEAs with – including the UK, the US, Switzerland and Ireland – can be found here.

Economic substance

Jersey introduced the Taxation (Companies – Economic Substance) (Jersey) Law 2019 (the "ES Law") in order to ensure cooperation with international standards.

The ES Law applies to all companies, anywhere in the world, which are tax resident in Jersey and which carry on any 'relevant activities' (including banking, insurance and fund management business), requiring them to demonstrate that they have sufficient 'economic substance' in Jersey. The ES Law imposes certain obligations on these companies, such as demonstrating adequate employees, expenditure and physical assets in Jersey.  

For more information on economic substance, please see our detailed briefing on the ES Law.

Financial crime regulation

With a financial services sector dating back decades, Jersey has a well-established, and continually evolving, structure in place to ensure the highest standards of regulation. Thus, those making use of Jersey entities can be confident that they are based in a respected and well-regulated jurisdiction.

The Jersey Financial Services Commission (the "JFSC") is the regulator for financial services in Jersey and has a long history of ensuring that the island's regulatory regime operates to the highest international standards. The JFSC is committed to maintaining Jersey's position as a leading international finance centre, delivering balanced, progressive, risk-based financial regulation.

The Financial Intelligence Unit – Jersey (the "FIU") is an operationally independent organisation, and is responsible for analysing and reporting on financial intelligence. The FIU plays a key role in contributing to the island's robust regulatory systems, so that risks are properly identified and mitigated.

Beneficial ownership

Since 2017, the island has operated a centralised and non-public register of beneficial ownership of Jersey legal persons. Beneficial ownership information must be provided on all companies, foundations, incorporated limited partnerships and limited liability partnerships. Trustees must also hold ultimate beneficial ownership information on trusts. The JFSC also maintains a public-facing register with information on significant persons. This system enables the island to ensure that it remains transparent and continually compliant with international standards. 

Anti-money laundering

In 2024, The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism ("MONEYVAL") published their fifth-round mutual evaluation report on Jersey following a review of the island's anti-money laundering and financial crime prevention measures. MONEYVAL's report found that the island was compliant or largely compliant with 39 of the 40 recommendations set out by the Financial Action Task Force (FATF) and that no 'fundamental improvements' were needed. Overall, the report concluded that the island has a high-quality and comprehensive regulatory regime that effectively combats the risks posed by money-laundering and the financing of terrorism.

Data protection

Jersey, whilst not part of the EU and directly subject to the European General Data Protection Regulation ("GDPR"), has introduced many of the principles of GDPR through the Data Protection (Jersey) Law 2018, which ensures that similar high standards are met for the safety and protection of data. This has led to adequacy decisions from both the UK and the EC, which confirmed that Jersey's data protection and privacy standards were sufficient to safeguard UK and EU personal data, enabling the transfer of personal data without the need for further safeguards or specific authorisation.

Conclusion 

As a jurisdiction, Jersey demonstrates a truly global outlook. The island consistently keeps pace with evolving international standards, ensuring that they are implemented to the highest level.

Accordingly, Jersey is a highly attractive and stable jurisdiction for fund, corporate and trust administration and this overview has touched on just some of the reasons why.

If you would like any further information, please get in touch with your usual Bedell Cristin contact or one of the contacts listed.