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Offshore Trusts Report: Jersey

Jersey Foundations

In 2009 Jersey became the first Crown Dependency to offer Foundations.

Whilst similar in design to Foundations in other jurisdictions, the Jersey structure has mandatory requirements for one member on its council to be licensed as a Qualified Person by the Jersey Financial Services Commission and for the Foundation to have a ‘guardian’, who has a duty to supervise the council’s activities. In addition, the flexibility of the Jersey structure allows it to be tailored to suit a broad range of needs.

Whilst Jersey is first and foremost a trust jurisdiction, with many years of experience in the administration of trust structures, there are many countries in which the trust is an unfamiliar concept. Consequently the ability to create a more familiar vehicle such as the Foundation will be of interest to those from areas of the world where the trust is not well understood, and will likely encourage more HNWIs to do business with Jersey.

Foundations have a long history in continental Europe. In medieval times they were used for charitable or religious purposes. They are now commonly used for wealth management, and residents of jurisdictions like the Middle and Far East are more familiar with foundations than with trusts, which do not exist in their legal systems. Indeed, Mourant du Feu and Jeune, one of Jersey’s leading law firms, says that clients and advisers from many civil law jurisdictions, such as China, Russia and some continental European jurisdictions prefer Foundations because they offer familiarity, transparency and flexibility, the firm says.

In November 2009, Mourant announced that it had completed a Foundations related “hat-trick.” Having advised on the first Jersey Foundation for private beneficiaries and the first Jersey Foundation for charitable purposes, it also advised Royal Bank of Canada on the first continuance of a foreign foundation to be registered in Jersey and to continue its life as a Jersey Foundation.

The continuance came from Liechtenstein and involved a team of Mourant du Feu & Jeune advisers assisting in the flow of information between the Jersey and Liechtenstein registrars.

Giles Corbin, head of Mourant du Feu & Jeune’s Trusts practice, which advises on the structuring and drafting of Foundations, said:

“A Foundation is a new concept for Jersey and has been welcomed as a positive step in affirming the Island as a leading jurisdiction for private wealth management business. Jersey is fast becoming a jurisdiction of choice for the structuring, drafting and administration of Foundations because of its OECD white-list status and the expertise of its advisers and administrators.”

Since Jersey’s Foundations law came into force in July, making it the first Crown Dependency to offer Foundations, Mourant du Feu & Jeune has advised on over half of all Jersey Foundations that have been created.

Alan Binnington, Private Client Director at RBC Wealth Management, noted that whilst Jersey is first and foremost a trust jurisdiction, with many years of experience in the administration of trust structures, there are many countries in which the trust is an unfamiliar concept, the ability to create a more familiar vehicle such as the Foundation will be of interest to clients from areas of the world.

“Unlike a trust, which is essentially a relationship between the trustees and the beneficiaries, rather than a legal entity, the Foundation has a separate corporate personality, similar to a company, and this may be more attractive to clients who are uncomfortable with the trust concept," he said.

Jersey is keen to ensure that its Foundations are subject to the same regulatory regime as trusts, notes Binnington. “The new law accordingly contains a requirement that one of the members of the Council of the Foundation is a regulated person. In addition, whilst beneficiaries will not have any rights to enforce the council’s duties, there is a requirement that each foundation has a guardian, who will hold the council members to account,” he continued.

The text of the Foundations (Jersey) Law 2009 was released for public viewing following the Privy Council’s approval of the text in mid-June 2009. A consultation paper setting out the proposed registration and process fees for foundations was also issued by Jersey’s Financial Services Commission.

Broad agreement from industry has been obtained via the Foundations Working Group that fees for foundations should track, where similarities exist, those currently set for Jersey companies.

In order to be consistent, amendments have been proposed to other Registry Fees Notices, with respect to searches, to bring them into line with the proposed search fees for foundations.

Welcoming the Privy Council’s decision in a prior statement, Economic Development Minister Alan Mclean said: “More than ever, in these difficult times, we need to do what we can to support and diversify the island’s Finance Industry. I am pleased that Jersey is the first of the Crown Dependencies to bring in Foundations, and we hope this kind of innovation will help to protect and develop the industry that pays for more than half of Jersey’s essential services.”

The Foundations (Jersey) Law 2009, entered into force on July 17, 2009.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Jersey News

Cayman Islands Named Leading Specialized IFC Friday 8/9/2017 The Cayman Islands has again been named the world's number one specialized financial center by the Banker magazine, part of the Financial Times Group.

Jersey Proposes Infrastructure Levy Friday 23/6/2017 Jersey is consulting on the introduction of a land development charge, to be called the Jersey Infrastructure Levy.

Jersey Research Highlights China HNW Succession Issues Thursday 15/6/2017 Jersey's financial services promotion agency, Jersey Finance, has published new research on the key challenges facing wealth management practitioners working with China's wealthiest individuals.

Abu Dhabi Tax-Free Zone To Launch Foundations Friday 2/6/2017 Abu Dhabi Global Market, the low-tax international financial center, is seeking feedback on its proposal to allow the formation of "foundations," a trust-like entity widely used in civil law jurisdictions.

Jersey Regulator Issues AML/CTF Funds Guidance Thursday 16/3/2017 Jersey's financial services regulator, the Jersey Financial Services Commission, has issued new anti-money laundering and countering the financing of terrorism guidance for Funds and Fund Operators.

Channel Islands Exchange Attracting New Listings Thursday 3/11/2016 Steps taken by the Channel Islands Stock Exchange to enhance and diversify its offerings contributed to a 13 percent increase in new business during the first half of the year.

JFSC Reports On Trust Company Business Compliance Wednesday 30/3/2016 The Jersey Financial Services Commission has published an annual review of its findings during on-site visits in 2015 to review the practices of trust company businesses.

Jersey Raises Trust Company Fees Tuesday 23/2/2016 The Jersey Financial Services Commission has raised Trust Company Business registration and application fees for 2016.

Jersey Regulator Issues 2016 Business Plan Friday 12/2/2016 The Jersey Financial Services Commission has set out its objectives and priorities for the coming year in its 2016 Business Plan and Budget.

Channel Islands Exchange Welcomes Solid 2015 Thursday 28/1/2016 There was an eight percent increase in the number of securities listed on the Channel Islands Securities Exchange in 2015.