This article is kindly contributed by Ogier. Contact details can be found at the end of the article.
Unlike English law and provided certain statutory criteria are met which are explained in more detail below, as a matter of Jersey law a company incorporated in Jersey can be migrated overseas (also known as redomiciliation) and similarly a foreign incorporated company can be migrated or redomiciled to Jersey. Ogier has worked on a number of migrations in and out of Jersey to a variety of jurisdictions as corporate groups have streamlined their group structures. Migrations are often linked to:
- a desire to consolidate the number of offshore jurisdictions used by clients; and
- a merger or other consolidation of entities within a group.
It is important to note that by migration we mean the legal continuance of a company which, although initially incorporated in jurisdiction 1 will, on and from migration, be incorporated in jurisdiction 2 with and subject to all of its assets and liabilities.
This is different from a transfer of tax residence which may potentially be achieved by a change of management and control.
Migration into Jersey
The Companies (Jersey) Law 1991 (the “Law”) allows a company registered in a foreign jurisdiction to migrate from its home jurisdiction to Jersey provided that the laws of the foreign jurisdiction allows it to do so. Upon a migration into Jersey becoming effective:
- the property and rights of the company immediately prior to the migration continue in the Jersey company;
- the company continues to be subject to all criminal and civil liabilities, contracts, debts and other obligations; and
- all legal proceedings pending may be continued against the company.
The application for migrating a foreign company to Jersey involves the following key actions:
- the company must adopt articles of association which conform to Jersey law which are filed with the Registrar of Companies;
- a statement of solvency must be signed by each director and each proposed director;
- the particulars of the directors and secretary must be filed (but are not made public);
- confirmation is required from legal counsel in the foreign jurisdiction that the company may migrate, all necessary authorisations have been given in the foreign jurisdiction to enable the migration to take place and, on continuance in Jersey the company will cease to be incorporated in the foreign jurisdiction;
- evidence that creditors will not be unfairly prejudiced must be provided (this may be confirmed by a director of the applicant company); and
- any other information the Registrar of Companies in Jersey may require.
Potential applicants will also need to consider any other Jersey licensing or regulatory requirements such as the Control of Housing and Work (Jersey) Law 2012. This will typically be relevant only to those companies seeking to conduct a business and engage employees within Jersey. Alternatively, a licence may be required under the Financial Services (Jersey) Law 1998 or the Collective Investment Funds (Jersey) Law 1988.
Migration out of Jersey
A Jersey company may also migrate to a foreign jurisdiction from Jersey and continue as a foreign incorporated company in that jurisdiction. The procedure to migrate out of Jersey is slightly more lengthy than that to migrate into Jersey as notice to creditors must be given.
The following is a summary of the key aspects of the process required under Jersey law to migrate from Jersey to a foreign jurisdiction.
The members and each separate class of members of the Jersey company must pass a special resolution (a two thirds majority under Jersey law) approving the migration. The written resolution or the notice of meeting (as the case may be) must include a summary of the proposed application and inform members that any of them may object within 30 days of passing the special resolution. An objection may be made by application to the Jersey courts on the grounds that the migration would unfairly prejudice the shareholder’s interests.
Board of Directors Approval
There are two board meetings to be held in relation to the approval of the migration.
The first meeting is to approve the proposal to migrate and the issue of all notices (including an advertisement in the local newspaper in Jersey) and the circulation of the members’ special resolution.
The second meeting may be held a minimum of 30 days after the publication of the advertisement and is to:
- note that the 30 day creditor and member objection periods have each expired;
- note that all local government consents have been obtained (see below);
- approve and each director and incoming director to sign a solvency statement; and
- approve the final application to be made to the Registrar of Companies in Jersey.
Notice to Creditors
At least 31 days prior to the application being made to the Registrar of Companies in Jersey notice must be published in the Jersey Evening Post newspaper and sent to each creditor informing them of the company’s intention to migrate and the right of any creditor to object within 30 days after the date of the published advertisement.
The key documents forming part of the application to be made to the Registrar of Companies in Jersey include:
- A certified copy of the members’ special resolution.
- Confirmation from the Department of Income Tax and the Department of Social Security in Jersey that they have no objections to the migration.
- Confirmation from a lawyer in the jurisdiction to which the company seeks to migrate that all property and rights of the company will continue in the foreign jurisdiction, the foreign jurisdiction permits the migration, the company will remain subject to all civil and criminal liabilities, contracts, debts and other obligations and all legal proceedings and other actions pending may be continued.
- Evidence that notice to creditors has been given and no creditor has applied to the Royal Court for a restraining order or such application has been determined.
- Evidence that no member has applied to the Royal Court of Jersey on grounds of unfair prejudice or any application has been determined.
- Copy of the latest financial statements of the company.
A co-ordinated approach to the migration to the foreign jurisdiction is required and therefore the company will need to liaise with its foreign advisers to ensure that all relevant formalities are dealt with in the foreign jurisdiction. After processing the Jersey application the Registrar of Companies will issue a conditional consent which will become unconditional upon delivery to the Registrar of Companies of a certificate of incorporation from the relevant registrar or regulator in the foreign jurisdiction. When this is received a formal certificate will be issued by the Registrar of Companies in Jersey and the company will cease to be incorporated under the Law as of that date.
Ogier has acted on numerous migrations both in and out of Jersey for private companies, funds and regulated entities.
Ogier is a world leader in the provision of Jersey, Guernsey, BVI, Cayman and Luxembourg law advice. With over 190 lawyers, Ogier covers all time zones and key financial markets. If you require more information on the contents of this article please contact Chris Byrne, Partner by telephone +44 1534 504270 or by e-mail at firstname.lastname@example.org.
Get practical advice & insights on the Legal Implementation of Transfer Pricing for Multinational Groups