JERSEY Law and Practice Contributed by: Nienke Malan and Christopher Griffin, Carey Olsen
Company Overview
invest a minimum of USD1million (in the case of a Notification-Only Fund) or USD100,000 (in the case of an Expert Fund) or who meet certain other criteria. Jersey has a unique relationship with both the UK and the EU. It has been treated by the EU as a “third country” for financial services purposes for many years, and since the introduction of the Alternative Investment Funds Managers Direc - tive (AIFMD) has proven a popular location for managers and funds wishing to access EU/EEA markets using private placement routes. Jersey’s strategy in relation to the AIFMD and, more recently, the UK AIFM Regulations, is to have the correct frameworks in place to continue to provide fund establishment, management and administration services on a “business as usual” basis. Jersey has achieved this by placing an AIFMD/UK AIFM Regulations “overlay” on exist - ing regulatory frameworks such that a Jersey fund need only comply with AIFMD/UK AIFM Regulations to the extent that it is necessary and without imposing any additional Jersey-specific reporting or other requirements. 2. Alternative Investment Funds 2.1 Fund Formation 2.1.1 Fund Structures Alternative investment funds in Jersey are typi - cally structured as companies (including pro - tected cell and incorporated cell companies), limited partnerships or unit trusts, each offering distinct advantages tailored to specific invest - ment strategies and investor requirements.
A Jersey company has its own separate legal personality and may sue, and be sued, in its own name. Advantages The Companies (Jersey) Law 1991 is based on familiar UK company law but with certain enhancements that allow for a more flexible and practical regime. There are a number of advan - tages to Jersey companies, including as follows. • The law provides for a flexible capital main - tenance regime and, subject to the board giving a 12-month forward-looking cash- flow-based solvency test, a Jersey company may fund a distribution from any source other than its nominal capital account (in the case of a company whose shares have a nominal value) or any capital redemption reserve. This means a Jersey company may still be able to make distributions when it has accumulated losses (including where it has a negative profit and loss account). • There is no requirement for distributable profits in order to fund a repurchase or redemption of shares out of a non-capital account, and there is no requirement for available profits in order to fund a repurchase or redemption out of capital; subject to a solvency statement requirement, shares can be repurchased out of any company account (including capital accounts). • A private company is not required to appoint an auditor or file its accounts. • Jersey does not levy stamp duty or any equivalent transfer tax on transfers of shares (subject to limited exceptions in respect of local property).
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