Starting Point Employment Law Guide: Starting a business in Jersey

Jersey - not just cows

Jersey is the largest of the Channel Islands and is a British Crown dependency.

It has its own financial legal and judicial systems. It is not part of the UK or of the European Union (although it has close relationships with both). It also has its own breed of instantly recognisable cows.

Starting a business in Jersey

Starting a business in Jersey (or relocating one here from another jurisdiction) is relatively straightforward, particularly compared to some other jurisdictions. However, there are some key issues of which you should be aware.

How should I structure my Jersey business?

We have extensive expertise in assisting clients in determining and implementing the most appropriate structure for their business.

The most common form of ownership structures are as follows:

• sole traders;
• partnerships;
• limited companies; and
• limited partnerships (an increasingly common option for fund managers).

We have significant expertise in advising all of the above structures, particularly where there are regulatory or other considerations to take into account.

Jersey companies

The majority of businesses in Jersey elect to trade through a company structure which has limited liability.

The key legislation governing companies in Jersey is the Companies (Jersey) Law 1991 (the "CJL").

The CJL provides that a company may be formed:

• as a public or private; and
• having the liability of all or any of its members:
  • limited by shares (i.e. limited to the amounts unpaid on their shares);
  • limited by guarantee (i.e. limited to the amounts which they undertake to pay on a winding-up); or
  • unlimited; and
• which is a par value, no par value or a guarantee company.

Types of companies permitted under the CJL include cell companies, being either protected cell companies (which can create protected cells, not having their own separate legal identity) or incorporated cell companies (which can create incorporated cells with their own separate legal identity).

Of the possible combinations, the most common type of company formed in Jersey is a private par value company limited by shares. This is in part due to the similarity between such form of company and an English private limited company. From a legal perspective a no-par value company offers greater flexibility in terms of capital etc.

The main incorporation steps for a Jersey Company are as follows:

• An application form submitted to the Companies Registry via their MyRegistry portal. Details to be confirmed in the application form include:
  • details of the proposed shareholder(s), controller(s) (including the proposed directors) and ultimate beneficial owners of the company; 
  • the name and intended registered office address of the company; and
  • the proposed activities of the company.
• A memorandum and articles of association, in a form suitable for the type of company.
• Payment of the prescribed fees, which vary by the required response time as follows:
  • £205 for an incorporation within five business days of documents being received by the Registry;
  • £308 - within three business days;
  • £395 - within two business days;
  • £543 - within one business day; and
  • £856 - within two hours.

There is also an out of hours service available by agreement with the Companies Registry which attracts a minimum fee of £1,548.

"Anti-money laundering" and "know your client" documents and information must be provided to the Companies Registry or regulated corporate services provider in order to establish a Jersey company, including information relevant to Jersey's beneficial ownership and control register (which is not currently a public register).

It may also be necessary to apply for authorisation from the Jersey Financial Services Commission should the business be intending to undertake regulated financial services.

The company may also need to register under the Jersey data protection law if it will hold/process personal data. In practice, almost every corporate entity will require some form of registration.

More information on employing employees in Jersey is set out below.

Finally, certain unregulated activities are subject to anti-money laundering/"know your client" regulations, and require registration with the Jersey Financial Services Commission.

Tax

Although some registrations may be automatic following the grant of an appropriate business licence. Businesses generally need to register with:

• Revenue Jersey (for income tax);
• Customer and Local Services (for social security contributions); and
• the Taxes Office (for GST).

Goods Services Tax (GST)

GST at the standard rate of 5% is payable on the majority of goods and services supplied in Jersey for local use, including imports.

Registration is required for businesses with a turnover of over £300,000, within any rolling 12 month period.

Personal taxation

Most Jersey residents (other than high net worth individuals) are subject to income tax at 20%. There are no capital gains, gift or inheritance taxes. Sole traders and partners in partnerships are taxed at 20% on the profits of their businesses.

Employers must make appropriate deductions in respect of income tax from wages and salaries and account to Revenue Jersey for them under the Income Tax Instalment Scheme (ITIS).

Stamp duty is only payable on the acquisition and financing of Jersey property and a capped probate duty is payable on the registration of Jersey wills. There is no stamp duty generally in respect of the transfer of shares in a Jersey company (except local real estate transactions where property is owned through shares, in which case Land Transaction Tax at the same rate as stamp duty is ordinarily payable).

Social Security is payable both by employers and employees as follows:

From 1 January 2027, the UEL will be removed, meaning employers will pay contributions at a rate of 2.5% on all earnings above the SEL, regardless of how high an employee's salary is.

Corporate taxation

In general terms, a Jersey incorporated company is subject to Jersey income tax at a flat 0% rate in respect of its income, unless it is within a restricted sector of local financial services companies or utility companies or it has local property-related income.

A financial services company, which is regulated in Jersey in respect of certain types of financial services, is subject to Jersey income tax at a 10% rate. 

A utility company, which provides local utility services, is subject to Jersey income tax at a 20% rate.

Property-related income is subject to the 20% standard income tax rate.

Business licensing

Anyone wishing to set up a new business in Jersey will need to understand the provisions of the Control of Housing and Work (Jersey) Law 2012 ("CHW Law"), which governs:

• The residential and employment status of employees.
• Business licensing.

Residential and employment status of Jersey residents

Jersey residents fall into one of six residential and employment categories.

• Permanent Entitled – those who are Jersey born and have completed 10 years residence or those who can demonstrate 25 years of continuous residence.
• Entitled – those with 10 or more years' residence (similar to the previous categories).
• Licensed - those with less than 10 years' residence who are working in a role for which their employer holds a "licensed" permission (previously referred to as "essential" employment), permitting them to lease or purchase either Qualified or Registered property.
• Licensed for lease only – those who are working in a role for which their employer holds a '​licensed for lease only', permitting to lease (not buy) either Qualified or Registered property.
• Entitled for Work – achieved after five consecutive years of residence or as an eligible partner. 
• Standard – formerly called Registered Status, being those with less than five years' residence.

Further details of the residential status categories are set out in the Appendix.

Jersey property falls into one of two categories:

• Qualified - in which only those who are Entitled or Licensed may live; or
• Registered – in which anyone may reside.

Skilled High Earner route

An application route for those wishing to move to the island to undertake business activities is the Skilled High Earner route which is designed for non‑resident entrepreneurs who will establish themselves in business in Jersey and obtain Licensed permission. 

Applicants must not already be ordinarily resident in Jersey, own residential property in the Island, or hold an existing residential status. 

Applicants must establish and actively run a Jersey business, working more than 25 hours per week and a minimum Jersey-taxable income of £250,000 per year must be generated until Entitled status is obtained, or for up to 10 years. 

Applicants must demonstrate a meaningful economic or social contribution to Jersey, such as mentoring local businesses, serving on boards, or supporting charitable initiatives. 

Ongoing requirements associated with this route include property ownership or rental being restricted to residential properties valued at £2 million or more. A licensed permission is granted for an initial period of five years, at which point it will be reviewed for continued compliance with the conditions.

High Value Residency (HVR)

The HVR scheme is a selective relocation route for high-net-worth individuals that requires personal wealth exceeding £10 million and an annual worldwide income above £1.25 million.

There is a minimum amount of income tax payable of £250,000 per year, although meeting the minimum does not guarantee approval.

The Chief Minister (acting through the Housing and Work Control Panel) may grant Entitled residential status where satisfied that doing so will have wider social and economic benefits including business contribution, voluntary or charitable engagement, and other background considerations.

There is an expectation under this scheme for the individual to purchase or lease a high value property, typically valued in excess of £3.5 million for a house or £1.75 million for an apartment.

Obtaining a business licence and a staffing license

A person carrying on a business in Jersey must generally obtain the appropriate business licence under the Control of Housing and Work (Jersey) Law 2012. A resident business requires a resident business licence and a non-resident business requires a non-resident business licence.

A resident business is a business carried on in Jersey that does not fall within the statutory definition of a non-resident business. Broadly, a non-resident business is carried on from outside Jersey and has no permanent business premises in the Island. The distinction determines the appropriate licence: a resident business licence for a resident business and a non-resident business licence for a non-resident business.

An application is made to the Government of Jersey Business Hub. It should describe the proposed activities, ownership and operating arrangements and (if staff will be employed) the staffing permissions required.

The licence may define the permitted business activities and include conditions.

In addition to a business license, a resident business will need a staffing licence if it employs anyone with Licensed, Licensed for Lease Only or Standard status (ie non locally qualified staff). The staffing licence specifies the maximum number of workers in each of those categories who may work in or for the business. A resident business employing none of those categories does not require a staffing licence.

A business licence does not replace any regulatory, professional or industry-specific approval required under other legislation – such a regulatory approval to conduct a financial services business from the Jersey Financial Services Commission.

Exceptions to maximum licence numbers

The following workers do not count towards the maximum numbers stated in a staffing licence while the relevant conditions are met:

• a replacement worker where the replacement and outgoing worker overlap for no more than 30 days;
• a worker covering parental leave for up to 52 weeks, sick leave for up to 52 weeks, or other leave, including a secondment or training leave, for up to three months;
• a person with Licensed, Licensed for Lease Only or Standard status who works more than 25 hours a week for a first business under that business’s staffing licence, when working a second job for another business;
• an agency worker, for the business to which the worker is supplied, where the worker remains employed or engaged under the agreement with the agency;
• a zero-hours worker during any period in which no hours are worked for the business;
• a worker carrying out specified exempt employment activities, including qualifying office-holders, qualifying international-group workers and qualifying establishment visitors; and
• a short-term worker who works for the business for no more than 10 days in a 12-month period.

Further exemptions apply in specific circumstances, including to certain young people who became ordinarily resident in Jersey while in full-time education and financially dependent on a qualifying parent. Businesses should retain records establishing that the relevant conditions and time limits are met.

Who does not require a business licence?

A business does not require a business licence if it carries on only exempt business activities, together with activities reasonably incidental to them. The exemptions include, subject to their detailed conditions:

• specified regulated activities, and activities administered or managed by a regulated person, carried on by a non-resident business or by a resident business whose workers are qualifying office-holders present in Jersey for no more than 60 days in a 12-month period;
• providing accommodation or premises where the statutory conditions are satisfied, including a resident business providing no more than five separate premises or units;
• a resident business providing domestic or personal services to no more than two households;
• activities carried out by a qualifying business visitor for establishment purposes;
• urgent activity by a non-resident business following a designated critical incident; and
• qualifying repair or maintenance of medical equipment by a non-resident business for no more than 60 days in a 12-month period.

A business, other than a non-resident trading business, is also exempt if it operates in Jersey for no more than 10 days in a 12 month period. A non resident trading business includes a person without permanent business premises in Jersey who is physically present in Jersey to buy from, or sell goods or services to, the public.

There is also a limited exemption for a resident sole trader or single-member company where the owner has a qualifying status, is the only person working in or for the business and works for the business for less than eight hours a week.

A separate exemption applies to remote workers. A person who is in Jersey for no more than 60 days in a 12-month period may work remotely for a business that does not carry on business in Jersey without requiring an appropriate Control of Housing and Work status. This exemption concerns the individual’s remote work; it does not permit an overseas business that is itself carrying on business in Jersey to operate without the appropriate business licence.

An exemption from the business licence requirement does not remove the need to comply with immigration, regulatory or other legal requirements.

Registration cards

Before a person starts new employment, the employer should establish the person’s Control of Housing and Work status and confirm that its business and staffing licences permit the appointment. A registration card is the usual evidence of status unless the person or work is exempt.

The employer should:

• inspect the registration card and photographic identification;
• confirm that the identification and card relate to the same person;
• check that the status shown permits the proposed employment and that any required staffing permission is available;
• check that the evidence is current; and
• retain appropriate evidence of the checks, subject to applicable data-protection requirements.

A person is exempt from needing an appropriate status for work performed for no more than 10 days in a 12-month period or where the work is an exempt employment activity. Exempt employment activities include qualifying remote work for a non-Jersey business, qualifying work by directors and other office-holders, qualifying work for the Jersey branch of an international group and qualifying work by a business visitor for establishment purposes. The detailed conditions and time limits must be satisfied.

An exemption from Control of Housing and Work status or from holding a registration card does not itself remove any requirement for immigration permission, a work permit, a business licence or another regulatory approval.

Employing people

Employers must do the following for every employee:

• Ensure that they understand the residential and employment status of the individual which they wish to employ.
• Ensure that their business licence permits the engagement of the employee in question.
• Provide a written statement of terms for each employee, setting out the terms and conditions of employment. This must be done within four weeks of the employee's start date.
• Pay each member of staff at or above the minimum wage (currently £13.59).
• Obtain Employer's Liability Insurance and display the certificate.
• Obtain a registration card and photographic identification for every new employee.
• Make the correct deductions from the employee's wages.
• Keep a record of the wages paid and deductions made for 10 years.
• Account to the relevant government authorities for ITIS and Social Security contributions in respect of each employee and submit man power returns.
• Provide each employee with an itemised payslip each time that wages are paid.

Work permits

The following employees do not require a work permit to work in Jersey:

• a British or Irish citizen or a British subject with the right of abode or individuals who hold indefinite leave to remain;
• a European Union (EU)/European Economic Area (EEA) passport holder who holds settled/pre-settled status;
• a family member of an EU/EEA passport holder who holds settled/pre-settled status;
• a participant in the Youth Mobility Scheme;
• a Commonwealth citizen admitted on the grounds of UK ancestry;
• a Commonwealth citizen with a certificate of entitlement to the right of abode;
• a minister of religion;
• a business visitor; or
• a non EU/EEA passport holder who has no restrictions attached to his/her stay.

Employees from other countries may require a work permit or there may be other permit free categories that apply.

To obtain a work permit for an employee, employers will need to make an application to the relevant authorities. To do this they will need to ensure they have capacity to engage the individual pursuant to their business licence and fulfil the criteria set out in the work permit policy.

Following Brexit, individuals coming to Jersey for the first time from outside the Common Travel Area (CT) i.e. UK, Ireland, Isle of Man and Channel Islands are likely to need a visa and a work permit unless they hold settled/pre-settled status or fall into another one of the above categories.

Securing commercial premises

The residential property market in Jersey is heavily regulated in order to preserve housing stocks for the local population.

Commercial property is more accessible, and generally acquisitions of purely commercial premises will not require separate consent. If the premises in question include dwelling accommodation, however, consent to the transaction will be required to be obtained from the Population Office.

There is very little statutory intervention into the commercial landlord and tenant relationship in the Island, and it is therefore recommended that legal advice is taken before entering into negotiations (or committing to) property transactions. Similarly, because Jersey does not have a registered system of title, it is important to engage lawyers at an early stage when negotiating the purchase of real estate in the Island (whether commercial or residential).

Further information

We are happy to supply specific advice where required.

Appendix - a summary of residential status