Jersey law provides for a number of business forms for investors. These include:

Limited Liability Company

A Jersey limited liability company (LLC) can be formed by Jersey residents or non-residents and typically takes only a day to complete registration. The Jersey LLC combines elements of both Jersey limited companies and statutory partnerships, resulting in it having a separate legal personality without being considered a body corporate.

Key aspects of an LLC include:

No requirement that a Jersey national be a participant, manager, or director of the company;
No minimum capital requirements, although a toll of 0.5% of the capital must be paid (maximum of GBP 5,000);
An LLC run by non-residents is taxed only on its Jersey sourced income; and
An LLC is a transparent entity for tax purposes and accordingly, allocated profits of the LLCs are taxable in the hands of the members of the LLC (as per New LLC Law adopted on 11 September 2018).

Jersey has published new rules for the taxation of LLCs which are effective from 1 September 2022. The key aspects of an LLC as per the new rules include:

An LLC is a resident in Jersey for tax purposes unless its business is centrally managed and controlled in a country or territory outside of Jersey where:

the highest rate at which an LLC or its members may be charged to tax on any part of its income is 10% or higher; or
the LLC or its members are required to satisfy a test that is substantially the same as the economic substance test provided in the domestic law (see Sec. 12.5. for details);

The income and property of an LLC must be treated as the income and property of its members;
The income of a member includes that proportion of the LLC’s income which is attributable to the member for the financial period, regardless of the amount actually distributed to the member during this period;
The proportion of an LLC’s income that is attributable to a member must be the same as the proportion of the profits of the LLC to which the member is entitled in accordance with Article 31 of the Limited Liability Companies (Jersey) Law 2018;
A permanent establishment of the LLC must be treated as a permanent establishment of the member while determining whether a member of an LLC has a permanent establishment in Jersey;
The LLC must provide a true, complete, and correct return containing:

the LLC’s financial statements for a financial period, including the total income of the LLC for a financial period;
for each member of the LLC:

the member’s name and address, and
the proportion of the profits of the LLC for the financial period to which the member is entitled in accordance with Article 31 of the Limited Liability Companies (Jersey) Law 2018; and

any other information required by the Comptroller; and

The Comptroller may rely on the information included in the return filed by the LLC for determining a member’s income.

Partnerships

Partnerships in Jersey can be formed in a number of ways, including general partnerships, foreign partnerships, and 3 forms of limited partnerships. Partners in partnerships can be natural persons or legal entities.

Key aspects of a general partnership include:

The liability of each partner is unlimited;
Details of the partnership do not have to be registered; and
Each partner is taxed based on their residency.

Key aspects of a foreign partnership include:

Control and management are conducted outside Jersey;
Is considered non-resident even if some partners are resident in Jersey; and
Partners are taxed on income sourced in Jersey.

On 24 February 2017, Jersey enacted the Limited Liability Partnerships Law 2017, replacing the erstwhile law of 1997. The new law has introduced, inter alia, provisions in respect of reinstatement of a partnership after the cancellation of registration and LLP secretary to replace and assume functions of the designated partner.

Key aspects of a limited partnership include:

Consists of general and limited partners, each of which can be natural persons or legal entities;
Requires lodging of a declaration with the Registrar;
Not a legal entity separate from its partners;
Each partner assessed for tax - residents on worldwide income, non-residents on Jersey sourced income; and
The Comptroller may require an LLP to deliver a statement of profits or gains arising to the partners from the activities of the limited liability partnership.

Separate and Incorporate Limited Partnerships

Jersey law also allows for the establishment of separate limited partnerships and incorporated limited partnerships. Key aspects of these partnership types include:

A separate limited partnership has a legal personality but it is not a body corporate; and
An incorporated limited partnership has a legal personality and is a body corporate.

Effective for financial periods beginning from 1 January 2022, economic substance requirements are required to be met by partnerships resident in Jersey and engaged in relevant activities (see Sec. 12.5. for details).

Business Forms for Foreign Companies

Foreign companies are allowed to establish subsidiaries, branches, or representative offices in Jersey. There are no specific capital requirements, and the participation of Jersey nationals is not required

Sole Traders

Jersey allows for the establishment of a business as a sole trader.

Key aspects of a sole trade include:

The owner's liability is unlimited;
Not required to formally register as a company, although an application must be made for a license;
May keep simple accounts; and
The business can be converted to an LLC.

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