Law Changes Widen Business And Corporate Appeal Of Jersey

by Carla Johnson, Investors Offshore.com, London

10 March 2008

Jersey is in the process of implementing a series of legal and regulatory changes designed to make the Island a more attractive jurisdiction for incorporating companies, it has emerged.

These changes aim to bring further flexibility and a far wider range of options for legal and finance professionals setting up companies in the Island. The measures will be particularly advantageous for those establishing special purpose companies, group holding companies or joint venture vehicles.

Some of the changes took effect in January and included the introduction of treasury shares, the abolition of the financial assistance provision, increased flexibility to the format of cell companies incorporated in Jersey, and a change in the law so that a regulated financial services business can now act as a corporate director of another Jersey company.

In the second quarter of the year, following Privy Council approval, further law changes will come into force which simplify procedures when certain types of companies wish to reduce capital or make distributions to shareholders. There will also be a relaxation of the rules on share buybacks.

The later legal amendments will also include new provisions designed to make Jersey a more attractive jurisdiction for public limited companies, including the ability for public companies to use the suffix ‘plc’ as an alternative to ‘limited’.

Robert Kirkby, Technical Director at Jersey Finance observed that:

“Taken together, these measures provide finance professionals with a whole range of additional options when forming corporate structures, giving them far greater flexibility. They will enhance the appeal of the jurisdiction when companies are established in the Island, providing a boost to leading sectors of our industry."

"For example, the ability to hold treasury shares will be particularly beneficial for public companies, whilst the abolition of the financial assistance provision will significantly simplify transactions involving the giving of financial assistance by Jersey companies.”

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