The Companies (Jersey) Law 1991 (the “Companies Law”) includes provisions enabling:
A company incorporated in a foreign jurisdiction to move its place of incorporation to Jersey; or
A Jersey incorporated company to continue as a foreign incorporated company in that foreign jurisdiction.
The terms „continuance‟, „migration‟ and „re-domiciliation‟ are used interchangeably but the Companies Law refers to the term „continuance‟. However, for the purposes of this note we shall use the commonly used term „migration‟
Consent for either inward or outward migration is required from the Jersey Financial Services Commission (the “JFSC“), which provides regulatory oversight for financial services conducted in Jersey.
The key feature of a migration is that the migrating company can move its business (together with its place of incorporation) from one jurisdiction to another (assuming each place recognises the ability to migrate) and retain legal liability for all of its existing obligations without the need for complex and expensive business transfer assignments or novations of obligations. Furthermore, where migrations are recognised, there is no need to convey property into the name of the company that is seeking “continuance” because it continues to benefit from all ownership rights relating to its assets.
Companies may choose to migrate between jurisdictions for a variety of reasons e.g. to benefit from changing business opportunities, to achieve a more efficient cost base or to take advantage of more flexible regulation.
Migration of companies into Jersey
The application process for a foreign company to migrate to Jersey is, so far as the Jersey side of the migration is concerned, a three-stage process and one that requires consent from the JFSC.
The first stage of the process principally involves the creation and approval of the “articles of continuance”
The constitutional documents of the foreign company will generally not conform with the requirements of the Companies Law, therefore, company‟s members must adopt amended constitutional documents that do so, these being the “articles of continuance”. These articles will take effect upon the company becoming incorporated as a Jersey company.
Other ancillary matters should be dealt with at this stage to avoid delay at a later stage, namely the administration arrangements for the company (it will need a registered office address in Jersey), the satisfaction of anti-money laundering issues and taxation advice which should be taken to ensure that all relevant fiscal consequences are understood.
The second stage of the process involves the application itself to the JFSC.
The relevant application form (form C100) can be downloaded from the Registry Section of the JFSC website. This form must be completed and submitted on behalf of the company to the JFSC with the requisite information and documentation including, inter alia:
(i) the articles of continuance;
(ii) a statement of solvency signed by each director and each proposed director;
(iii) particulars of the directors and secretary;
(iv) confirmation from a lawyer qualified in the foreign jurisdiction on various issues regarding the foreign company;
(v) application fee payable to the JFSC (currently £500).
The JFSC will advise the Registrar of Jersey Companies (the “Registrar”) that the application has been granted. The Registrar will then issue the company with a Certificate of Continuance.
The potential of other regulatory requirements should also be considered, including the obtaining of a licence under the Regulation of Undertakings and Development (Jersey) Law 1973, if the company is intending to occupy floor space and employ staff in Jersey.
Migration of companies out of Jersey
As with a migration into Jersey, the process for a Jersey company to seek continuance overseas is also a staged process.
The company must first obtain shareholder approval of the migration. The members and each separate set of share classes must pass a special resolution (as defined in the Companies Law and the company‟s articles of association) approving the migration.
Board of directors approval
The board of directors of the company must then hold a meeting at which it must approve:
(i) the proposal to migrate;
(ii) the issuing of all notices to creditors (see below); and
(iii) the circulation of the special resolution.
Notice to creditors
A notice must be sent to all creditors as well as the publication of a Notice to Creditors in the Jersey Gazette informing them of the company’s intention to migrate and their right to object within 30 days. Only after 30 days following the sending of the last of the Notices to Creditors (assuming no objections are received from any creditors) can the application be made to the Registrar.
A second board meeting must then take place:
(i) Noting that a period of 30 days has passed following the passing of the special resolution and no members have objected to the migration;
(ii) Noting that a period of 30 days has passed since last notification to creditors and no creditor objection has been received (see above);
(iii) Noting that all local government consents have been obtained; and
(iv) Approving the final application to the Registrar for the migration from Jersey, including:
(a) a completed Form C101 (similar to the C100 Form);
(b) the Directors‟ Declarations (see below).
Directors‟ Declarations are required pursuant to the Companies Law confirming, inter alia, the solvency of the company and that no member objection has been received.
The company must then write to the JFSC enclosing all relevant application documentation including, inter alia:
(i) Completed C101 Form with Minutes of the directors authorising the same;
(ii) A certified copy of the members‟ special resolution;
(iii) Copy of Jersey Gazette extract showing the publication of the Notice to Creditors and the date of publication;
(iv) A certified copy of the audited financial statements of the company for the period ending 12 months within the date of the application (non-audited accounts may be accepted in certain circumstances);
(v) Originals of the Directors‟ Declarations;
(vi) Affidavit of a lawyer authorised to practice in the foreign jurisdiction as to the ability of the company to seek continuance in that jurisdiction.
The JFSC will issue a conditional consent pending notification by the company to the Registrar of the date of issuance of the certificate of incorporation from the relevant registrar in the foreign jurisdiction along with the delivery of a copy of the same to the Registrar. Upon receipt by the Registrar of such certificate of incorporation the company shall cease to be incorporated under the Companies Law and the Registrar shall record that it has ceased to be so incorporated as of that date.
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