Migrating companies into and out of Jersey
05 June 2023
Jersey law allows a company incorporated outside Jersey to migrate into the island and become a Jersey company. Conversely, it also allows a company incorporated in Jersey to migrate to another jurisdiction. Corporate migration (also known as "continuance" or "redomiciliation") is a convenient and increasingly popular process that we regularly help our clients to implement.
In addition to Jersey, we also advise on the laws of BVI, Cayman and Guernsey, each of which permit inward and outward corporate migration via similar processes. For migrations between these jurisdictions, we can provide all necessary legal support.
Migrating into Jersey
A company moving to Jersey will continue to be bound by all of its existing contractual obligations without the need for a potentially complex and costly business transfer including the assignment or novation of its contractual arrangements. From a Jersey law perspective, the effect of the migration is that:
- the property and rights of the company will continue to be its property and rights after the 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.
Provided the law of a company's current home (overseas) jurisdiction allows it, the company can apply to the Jersey Financial Services Commission (the "JFSC") for permission to migrate to Jersey. The JFSC is the government authority which regulates financial services in Jersey.
The application to the JFSC must broadly include the following:
- a completed application form;
- articles of association which conform to Jersey company law and which will become the company's constitutional documents upon its migration to Jersey;
- a statement of solvency signed by all of the directors of the company and anyone who will become a director on the company's migration into Jersey;
- confirmation of certain matters from legal counsel in the overseas jurisdiction, including that the company is permitted to migrate to Jersey;
- particulars of the directors and secretary of the company; and
- evidence that creditors will not be unfairly prejudiced by the migration (this can be confirmed by a director of the company).
The length of time it takes for a company to migrate to Jersey will largely depend on the requirements of its existing home jurisdiction. From a Jersey perspective, no timescales are specified 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.
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 Jersey regulatory laws.
Migrating out of Jersey
In most cases, a company wishing to leave Jersey and move its jurisdiction of incorporation overseas can do so within a matter of weeks. The overseas jurisdiction must also have laws allowing inward migration.
The directors of the company will need to hold a board meeting to approve the migration proposal and related details, including a statement confirming the company's solvency.
The company must also obtain shareholder consent by special resolution approving the migration. Shareholders must be provided with a summary of the proposed application and be informed of their right to object to the migration.
Unless all of the company's known creditors agree in writing to the migration, the company must publish notice of the proposed migration. The company must also send a notice to each creditor informing them of the company's intention to migrate and their right to object.
The application to the JFSC must broadly include the following documentation:
- a completed application form;
- the shareholders' special resolution;
- confirmations of no objection from the Jersey Comptroller of Revenue and Department of Customer and Local Services;
- confirmation of certain matters from legal counsel in the overseas jurisdiction;
- evidence that no shareholder has applied to court with an objection to the migration, or that any application has been settled;
- evidence that notice to creditors has been given and no creditor has applied to court to restrain the migration, or that any application has been settled;
- the directors' statement of solvency; 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. The consent will become unconditional upon delivery to the JFSC of a certificate of incorporation issued by the relevant 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 Jersey law as of that date.
The content of this briefing is a summary of the relevant law and is intended for information purposes only. Advice from one of our experts should be sought in each case.