Migration of companies into and out of Jersey01 Oct 2019
The Companies (Jersey) Law 1991, as amended (the "Law") has long been recognised as a robust but modern companies law which has adopted a versatile and flexible approach to corporate regulation. One of the features of the Law which typifies this approach is the process enabling a company incorporated outside Jersey to migrate into the island and become a Jersey company. Similarly, the Law also allows a company incorporated in Jersey to migrate to another jurisdiction.
Migrating into Jersey
A migration can, in certain cases, be a cost-effective means of moving a business from one jurisdiction to another. A company moving to Jersey will continue to be bound by all of its existing contractual obligations without the need for complex and costly arrangements effecting a business transfer or the assignment or novation of contractual arrangements. From a Jersey law perspective, the effect of the migration is that:
- the property and rights of the company immediately prior to the migration will continue to be the property and rights of the company post-migration;
- the company will continue to be subject to all criminal and civil liabilities, contracts, debts and other obligations; and
- all legal proceedings which are pending by or against the company may still be continued by or against it once it has completed its migration to Jersey.
The process for migrating a company to Jersey
Provided the law of a company's current home (overseas) jurisdiction permits it to do so, the company may apply to the Jersey Financial Services Commission ("JFSC") for permission to migrate to Jersey and become a company incorporated under the Law. The JFSC is the government authority which regulates financial services in Jersey.
In summary, the application to the JFSC will include the following:
- a completed application form (in the prescribed Form C100);
- articles of association (also referred to as "articles of continuance") which conform to the requirements of the Law and which will become the constitutional documents of the company upon its migration to Jersey;
- a statement of solvency in the form required by the Law signed by all of the directors of the company and anyone who will become a director on the company's migration into Jersey;
- confirmation from legal counsel in the overseas jurisdiction that (i) the company may migrate to Jersey, (ii) all necessary authorisations have been given in the overseas jurisdiction to enable the migration to take place, and (iii) following the migration to Jersey, the company will cease to be incorporated in the overseas jurisdiction;
- particulars of the directors and secretary of the company;
- evidence that creditors will not be unfairly prejudiced by the migration (this may be confirmed by a director of the company); and
- any additional information/documentation which the JFSC may request in respect of the application.
Consideration should also be given to whether the migration may give rise to any Jersey licensing or regulatory requirements. This will be relevant where, for example, the company will have a physical office and staff in Jersey or where the company's activities will require it to have a licence under the Financial Services (Jersey) Law 1998 or the Collective Investment Funds (Jersey) Law 1988.
The length of time it takes for a company to migrate to Jersey will largely depend on the requirements imposed on the company in its existing home jurisdiction. From a Jersey perspective, no timescales are stipulated in the Law and, provided that the JFSC is satisfied with the application and associated documentation, the most important factor will be to ensure that the migration into Jersey coincides with the company's de-registration in the overseas jurisdiction.
Migrating out of Jersey
The process of migrating a company out of Jersey has become simplified in recent years. In most cases, a company wishing to leave Jersey and move its jurisdiction of incorporation overseas may do so within a matter of weeks.
The process for migrating a company out of Jersey
Board of Director approval
The directors of the company will need to hold a board meeting to approve:
- the migration proposal;
- the circulation of the necessary documents to shareholders (see "Shareholder approval" below)
- the issuance of all notices to creditors (see "Notice to creditors" below);
- a solvency statement which must be signed by all of the directors of the company confirming the company's solvency position; and
- the application to be made to the JFSC.
The company must obtain shareholder approval for the migration by means of the passing of a special resolution. Shareholders must be provided with a summary of the proposed application and be informed that any shareholder who opposes the migration may object to the Royal Court of Jersey within 21 days after the passing of the special resolution on the grounds that the migration would unfairly prejudice their interests.
Notice to creditors
Unless all of the company's known creditors agree in writing to the migration, the company must publish notice of the proposed migration in the Jersey Gazette. The company must also send a notice to each creditor informing them of the company's intention to migrate and their right to object to the Royal Court of Jersey within 21 days after the date of the published notice.
The application to the JFSC must include the following documentation:
- a completed application form (in the prescribed Form C101);
- a certified copy of the shareholders' special resolution;
- confirmation from the Comptroller of Taxes in Jersey and the Department of Health and Social Security in Jersey that they have no objection to the migration of the company;
- confirmation from legal counsel in the overseas jurisdiction to which the company seeks to migrate that (i) all property and rights of the company will continue in the overseas jurisdiction, (ii) the overseas jurisdiction permits the continuance, (iii) the company will remain subject to all civil and criminal liabilities, contracts, debts and other obligations, and (iv) all legal proceedings and other actions pending by or against the company may still be continued by or against it once it has completed its migration out of Jersey;
- evidence that no shareholder has objected to the Royal Court of Jersey on the grounds of unfair prejudice or that, if such an objection has been made, the matter has been concluded in a way that does not prevent the migration;
- evidence that notice to creditors has been given and/or that no creditor has or will object to the application;
- the statement of solvency signed by all of the directors; and,
- a copy of the latest financial statements of the company.
If it is satisfied with the application, the JFSC will issue a conditional consent to the migration. This consent will become unconditional upon delivery to the JFSC of a certificate of incorporation issued by the competent authority in the overseas jurisdiction. When this is received, a formal certificate will be issued by the JFSC and the company will cease to be incorporated under the Law as of that date.
How we can help
Bedell Cristin has acted on numerous migrations both in and out of Jersey for private companies as well as regulated and listed entities. For advice and assistance in relation to a migration, please contact Edward Bennett, Sara Johns, Guy Westmacott or Louise Hassell.