Company Migration to and from Jersey

• The application process and evidence required by the JFSC for a migration

• Consideration of a migration application by the JFSC

• Effects of granting a certificate of continuance and a migration overseas

Migration to Jersey

The Companies (Jersey) Law 1991 (as amended) (the "1991 Law") provides that a body that is incorporated outside Jersey (being a "Body Corporate") may apply to the Jersey Financial Services Commission (the "JFSC") for a certificate of continuance in Jersey, such that the Body Corporate will become a company incorporated under the 1991 Law (being a "Jersey Company"). This is on the proviso that it is authorised to make such an application by the laws of the jurisdiction under which the Body Corporate is incorporated. However, an application cannot be made in respect of a Body Corporate which:

• is being wound up, or is in liquidation or is subject to a declaration under the Bankruptcy (Désastre) (Jersey) Law 1990 (as amended) (the "Désastre Law");

• is insolvent;

• has had a receiver, manager or administrator (by whatever name any such person is called) appointed, whether by a court or in some other manner, in respect of any property of that Body Corporate;

• has entered into a compromise or arrangement with a creditor (not being a compromise or arrangement approved by the JFSC) and that compromise or arrangement is in force; or

• has an application pending before a court for the winding up or liquidation of that Body Corporate, or to have it declared insolvent, or for a declaration under the Désastre Law, or for the appointment of such a receiver, manager or administrator or for the approval of such a compromise or arrangement.

Fees and Security

All applications for migrations must be accompanied by an application fee, currently fixed at £1,010.

The 1991 Law permits the JFSC to require an applicant to provide security for costs. However, it is our understanding that the JFSC will only exercise this right in exceptional circumstances.

Applications

• a certified copy of the constitutional documents of the Body Corporate: such certification to be made by an Advocate of the Royal Court of Jersey (the "Royal Court"). However, the JFSC has indicated that it will accept a copy that has been certified by a regulated administrator of the Body Corporate;

• articles of continuance: these are the new memorandum and articles of association which shall, upon issue of the certificate of continuance, replace the existing constitutional documents of the Body Corporate and which will have been approved by the directors of the Body Corporate or as may otherwise be required under the laws of the jurisdiction under which it is incorporated; 

• a statement of solvency signed by each person who is a director of the Body Corporate, which states that, having made full inquiry into the affairs of the Body Corporate, that director reasonably believes:

• that the Body Corporate is and, if the application is granted, will upon the issue of a certificate of continuance be able to discharge its liabilities as they fall due; and

• that having regard to the prospects of the Body Corporate, the intentions of the directors with respect to the management of the Body Corporate's business and the amount and character of the financial resources that will in the directors' view be available to the Body Corporate, the Body Corporate will be able to (i) continue to carry on business, and (ii) discharge its liabilities as they fall due, until the expiry of the period of twelve months immediately following the date on which the statement is signed;

• the above statement of solvency must also be signed by each person who is going to be a director of the Body Corporate upon its migration and shall state that the person so signing  has no reason to believe that anything in the statement is untrue. Any director or person who is to be a director who makes a solvency statement without reasonable grounds for the opinion expressed therein shall be guilty of an offence;

• the name under which it is proposed to migrate the Body Corporate as a Jersey Company. It should be noted that, as with an incorporation, the Registrar of Companies in Jersey (the "Registrar") has the right to reject any name which they consider to be misleading or otherwise undesirable. We would recommend that the proposed Jersey corporate service provider of the Body Corporate reserve the name prior to the submission of the application to the JFSC;

• in relation to every person who is a director of the Body Corporate at the date of the application or who is to be a director of it upon its migration as a Jersey Company, the following particulars must be specified:

• present forenames and surname;

• any former forenames or surnames;

• business or usual residential address;

• nationality;

• business occupation (if any); and

• date of birth;

• in relation to each person who is a secretary of the Body Corporate at the date of the application or who is to be its secretary upon its migration as a Jersey Company, the following particulars must be specified:

• in the case of an individual, their present forenames and surname, any former forenames or surname and their usual residential address;

• in the case of a body corporate or a Scottish firm, its corporate or firm name, the place where it is incorporated and its registered or principal office; and

• in either case, the date on which they became the secretary and their qualifications;

• such other information as the Registrar would require on an application to register the Body Corporate as a Jersey Company. This will include the notice of the registered office;

• such other documents and information as are prescribed or as the JFSC may require in respect of a particular application; and

• the prescribed application fee.

The 1991 Law also requires that the application be accompanied by evidence as to the following:

• that the Body Corporate is authorised, by the laws of the jurisdiction under which it is incorporated, to make the application to the JFSC;

• where the constitution of the Body Corporate or the law of that jurisdiction requires that any authorisation be given for any application to the JFSC, evidence that such authorisation has been given;

• that if a certificate of continuance is issued under the 1991 Law, the Body Corporate will thereupon cease to be incorporated under the other jurisdiction;

• that if a certificate of continuance is so issued, the interests of the members and the creditors of the Body Corporate will not be unfairly prejudiced. The JFSC has indicated that it will accept letters from the creditors and members confirming that they are not materially prejudiced. This is in lieu of a certificate of a lawyer qualified to practice in the original jurisdiction of incorporation of the Body Corporate. Note also that some jurisdictions, such as the British Virgin Islands, may not legally require shareholder sanction to migrate to Jersey. However, such sanction goes to evidence the absence of unfair prejudice; and

• evidence that the Body Corporate is not prevented under the 1991 Law from making the application. In the past the JFSC has accepted such confirmation from qualified lawyers from the jurisdiction in which the Body Corporate was incorporated.

Consideration of Applications by JFSC

If the JFSC is:

• satisfied that the application complies with the 1991 Law (as set out above);

• informed by the Registrar that the proposed name of the Body Corporate is not in their opinion in any way misleading or otherwise undesirable (and complies in all other respects with Article 13 of the 1991 Law);

• satisfied that all other approvals and consents required under Jersey law have been given; and

• satisfied that the application fee and its expenses have been paid,

it may, in its absolute and unfettered discretion, grant the application. Our experience is that, provided that the application and supporting documentation are in order, the consideration by the JFSC will normally take five to ten days.

Objections to Decisions of JFSC

If so required, a Body Corporate may apply to the JFSC for a statement in writing with the reasons for its decision to refuse an application to migrate to Jersey (which must be provided by the JFSC within fourteen days). In addition, a Body Corporate, within one month after being informed of a decision by the JFSC to refuse its application, may appeal to the Royal Court on the grounds that the decision was unreasonable having regard to all the circumstances of the case. The Royal Court has the power to confirm, reverse or vary the decision of the JFSC.

Granting of a Certificate of Continuance

Once the JFSC has granted an application for a certificate of continuance as a Jersey Company, the Registrar shall register the application, and those documents accompanying the application, and issue to the applicant a certificate of continuance that is signed by them and sealed with their seal.

When the Registrar issues a certificate of continuance, the Registrar shall also immediately send a copy of it to the appropriate official or public body in the jurisdiction where the Body Corporate was originally incorporated.

Effect of Granting of Certificate of Continuance

Upon the issue of the certificate of continuance by the Registrar, the Body Corporate becomes a Jersey Company and hence will be governed by the provisions of the 1991 Law. The constitutional documents of the Body Corporate, as amended by the articles of continuance, will become the memorandum and articles for the Jersey Company.

When a Body Corporate is continued as a Jersey Company:

• all property and rights to which the Body Corporate was entitled immediately before the certificate of continuance is issued are the property and rights of the Jersey Company;

• the Jersey Company will continue to be subject to all criminal and civil liabilities, all contracts debts and other obligations, to which the Body Corporate was subject immediately before the certificate of continuance is issued; and

• all actions and other legal proceedings which, immediately before the issue of the certificate of continuance, were pending by or against the Body Corporate may be continued by or against the Jersey Company.

Migration from Jersey

• is being wound up, or is in liquidation or is subject to a declaration under the Désastre Law;

• is insolvent;

• has had a receiver, manager or administrator (by whatever name any such person is called) appointed, whether by a court or in some other manner, in respect of any property of that Jersey Company;

• has entered into a compromise or arrangement with a creditor (not being a compromise or arrangement approved by the JFSC) and that compromise or arrangement is in force; or

• has an application pending before a court for the winding up or liquidation of that Jersey Company, or to have it declared insolvent, or for a declaration under the Désastre Law, or for the appointment of such a receiver, manager or administrator or for the approval of such a compromise or arrangement.

A proposal to apply in another jurisdiction for migration shall be approved by special resolution of the members of the Jersey Company. Written notice to creditors is then required (the "Creditors' Notice"), unless all known creditors otherwise agree in writing, at least 21 days prior to making the application stating:

• that the Jersey Company intends to make the application and to which jurisdiction it proposes to seek migration; and

• that any creditor of the Jersey Company who objects to the application may within 21 days of the notice give notice of their objection.

The above Creditors' Notice is required to be published once in a newspaper in Jersey or in such other manner as the Royal Court may on application direct.

Fees and Security

All applications for a migration must be accompanied by an application fee, currently fixed at £1,030.

The 1991 Law permits the JFSC to require an applicant to provide security for costs. However, it is our understanding that the JFSC will only exercise this right in exceptional circumstances.

Applications

An application submitted to the JFSC must be accompanied by:

• a certified copy of the special resolutions of the members of the Jersey Company approving the migration overseas;

• a statement of solvency signed by each person who is a director of the Jersey Company, which states that, having made full inquiry into the affairs of the Jersey Company, that director reasonably believes:

• that the Jersey Company is and, if the application is granted, will upon its incorporation under the laws of the other jurisdiction be able to discharge its liabilities as they fall due; and

• that having regard to the prospects of the Jersey Company, the intentions of the directors with respect to the management of the Jersey Company's business and the amount and character of the financial resources that will in the directors' view be available to the Jersey Company if the application is granted, the Jersey Company if incorporated under the laws of the other jurisdiction will be able to discharge its liabilities as they fall due;

• the above statement of solvency must also be signed by each person who is going to be a director of the Jersey Company upon its migration and shall state that the person so signing has no reason to believe that anything in the statement is untrue. Any director or person who is to be a director who makes a solvency statement without reasonable grounds for the opinion expressed therein shall be guilty of an offence;

• confirmation from the Comptroller of Revenue and Customer and Local Services that they have no objections to the migration; and

• such other documentation as may be requested by the JFSC.

The 1991 Law also requires that the application shall be accompanied by evidence as to the following:

• that the laws of the jurisdiction in which the Jersey Company proposes to continue allow its migration there as a Body Corporate, incorporated under those laws;

• that the laws of the jurisdiction in which the Jersey Company proposes to migrate provide that upon migration of the Jersey Company as a Body Corporate in that jurisdiction:

• all property and rights of the Jersey Company will become the property and rights of the Body Corporate;

• the Body Corporate will become subject to all criminal and civil liabilities, and all contracts, debts and other obligations, to which the Jersey Company is subject; and

• all actions and other legal proceedings which are pending by or against the Jersey Company may be continued by or against the Body Corporate;

• unless all known creditors have agreed not to be given notice, confirmation that the Creditors' Notice has been given to all of the creditors of the Jersey Company and either no creditor has applied to the Royal Court to restrain the application or any objection of any creditor has been determined in a way which does not prevent the JFSC from granting the application;

• confirmation that no member of the Jersey Company has applied to the Royal Court for an order on the grounds of unfair prejudice or any such application has been determined by the Royal Court in such a way which does not prevent the JFSC from granting the application;

• confirmation that the Jersey Company has complied with such other conditions as may be prescribed by the JFSC; and

• confirmation that the Jersey Company is not prevented by virtue of insolvency (or any of the other acts indicative of insolvency) from making the application.

Consideration of Application by the JFSC

Provided the JFSC is satisfied with the application, and all fees and expenses due to them have been paid, it may grant the application subject to certain conditions as it may specify in its decision. One standard condition which will be applied to each authorisation is that the Registrar is informed of the date on which the migration will be, or is granted, in the jurisdiction in which the Jersey Company proposes to migrate, and that a copy of the instrument of continuance in the jurisdiction in which the Jersey Company proposes to migrate, certified to be a true copy, is delivered to the Registrar.

Objections to Decisions of JFSC

Effect of Migration Overseas

When a Jersey Company is, in accordance with the terms of the authorisation of the JFSC, migrated as a Body Corporate under the laws of the other jurisdiction to which the authorisation relates it shall cease to be a company incorporated under the 1991 Law and the Registrar shall on that day record that it has ceased to be so incorporated.

The information contained in this guide is necessarily brief and general in nature and does not constitute legal or taxation advice. Appropriate legal or other professional advice should be sought for any specific matter.