Moore Stephens London has recently warned that companies operating EU-flag vessels will need to be aware of new regulations from Brussels governing the payment of social security contributions which came into effect on 1 May this year.

Prior to the inception of the new rules, mariners were taxed under EC regulations in the vessel’s flag state, subject to certain exceptions. The position remains substantially the same under the new rules, with social security contributions for seafarers being paid in the member state in which the vessel upon which they are employed is flagged. Moore Stephens partner Steve Durman points out:

 “The exceptions to this rule have been greatly simplified under the new regulations, with the result that the only exception now will involve contributions in respect of seafarers who are remunerated by an ‘undertaking’ in a member state where they reside, in which case the legislation of the member state of residence will apply.

So, for example, seafarers resident in the UK working on German-flag vessels but paid by a UK-resident agent of the shipping company will be subject to UK national insurance and their agent will be treated as their employer for national insurance purposes. Given the disparity between levels of social security contributions throughout the EU, the industry will need to be alert to the financial implications for their employment strategies under the new rules.”

If this subject is of interest to you,  please contact Sue McCoy who heads the Moore Stephens Jersey Yachting services group who will be delighted to effect an introduction to Steve Durman:

 

Jersey’s Finance Industry has scooped another award as the top jurisdiction, this time from Global Investor magazine, one of the flagship titles published by Euromoney Institutional Investor plc.
The award for Best Offshore Centre was judged by the editorial team of the magazine and was one of a number handed out to leading lawyers, bankers and investment professionals during the evening. The Global Investor awards are in their tenth year.

In the last year Jersey was named Best International Finance Centre in the International Fund & Product Awards and also secured the accolade of International Finance Centre of the Year in the Society of Trust & Estate Practitioners (STEP) Private Client Awards. Clive Barton, Senior Partner commented:

‘This is further acknowledgement that Jersey meets the highest standards of corporate governance, and that we are committed to developing new products, and evolving our laws and regulations to meet international investor demand. The series of awards Jersey has won recently is testament to the fact that Jersey’s finance sector has emerged with an even stronger reputation since the financial crisis.’

 

Jersey’s finance industry was recognised today in a MPs Debate in Westminster Hall regarding offshore financial centres.

The Debate was brought forward by Mark Field, the Conservative MP for the Cities of London and Westminster, who proposed that the debate on the role of small Independent Finance Centres (IFCs) had been remarkably one sided to date and had demonstrated a fundamental lack of understanding of their function and the proven benefits they provide to the wider global economy. He also dispelled many of the myths associated with IFCs, and mentioned Jersey specifically.   

Mark Field MP commented that:

“An IMF review of Jersey’s regulatory standards in September last year concluded that Jersey was in the “top division” of financial centres and gave it the highest ranking ever achieved by a financial centre in terms of its compliance with FAFT recommendations”

He also recognised that Jersey had a “positive effect on the wider UK economy” and that the island (Jersey) “provides a conduit through which mobile capital from around the world can be aggregated and invested, primarily in London.”

He stated “much of this liquidity simply would not reach the UK but for the relationship between professionals in the City and in Jersey.”

Responding to the speech, Mark Hoban MP, Financial Secretary to the Treasury, recognised the progress that had been made by the British overseas territories and acknowledged the importance of such centres to London.

Commenting on the Debate, Geoff Cook, Chief Executive of Jersey Finance:

“The debate in Westminster today very clearly demonstrated the importance of Jersey’s financial services industry, especially with relation to the vital role that Jersey provides to the City of London’s transaction chain. Mark Field MP also acknowledged that Jersey is a significant provider of administrative and legal services to international businesses active in the City, citing the recent Vallar IPO (a Jersey company), which successfully raised more than £700 million and is one of the most significant IPOs to come to market in London so far this year.

It is also very encouraging that Mark Field MP outlined that the beneficial role that IFCs play in the global economy and called for recognition of this at the G20 Summit in Korea. This is further positive recognition of the high regulatory and supervisory standards that Jersey has.”         

Jersey’s finance industry has further enhanced its reputation, winning ‘Best International Finance Centre’ at the recent International Fund and Products Awards.

The panel of eight awarding judges are senior investment experts and advisers in the UK. The decision to select Jersey was based on the quality of its funds offering, as well as its reputation on the international scene and its robust legislative and regulatory framework.

Clive Barton, Senior Partner commented:

“This latest endorsement for Jersey’s fund industry reinforces the excellent work that is conducted in the funds sector and we look forward to building on this performance in the coming months and years.”

For further information on our Funds Services please contact the Partners in our Real Estate and Fund Administration Division:

Adrian Moll

Adrian.Moll@moorestephens-jersey.com

Nick Solt

Nick.Solt@moorestephens-jersey.com

Jersey has been named as the top offshore finance centre in the world.

The Island is now the only offshore jurisdiction ranked in the top twenty of the world’s best finance centres, according to the latest official ranking by the City of London, being placed 18th. overall in the Finance Centres Index.

The report by the Z/Yen Group on behalf of the City of London is produced every six months and examines the major finance centres globally in terms of competitiveness. It uses a set of ratings and rankings for each jurisdiction based on responses to a global survey.

Kathy Gillen, Partner, was delighted with the result of the survey as it demonstrated that Jersey has remained the pre-eminent offshore centre and said “This shows the high regard in which the Island is held around the world”.

The finance industry in Jersey employs some 13,000 people, which is about a quarter of the working population and was directly responsible for 53% of the total economic activity, measured in terms of gross value added, in 2008. The total size of the economy was £4.3bn.

Paul Camara has been appointed Manager of the Trust and Corporate Administration Department.

Paul was born in Madiera and moved to Jersey to join his family in 1968 and was educated at St. Helier Boys School. He started work for an accountancy firm working in the Audit department and after 7 years he moved to a trust company where he was an account manager.

In 1996 he moved to Moore Stephens as an assistant section head and some six months later he was made section head with responsibility for dealing with new business and by the end of the following year end he was appointed manager of Company Secretarial Administration Services.

In his new role, Paul will be responsible for both Trust and Corporate Administration Services and Company Secretarial Administration Services to clients and will be responsible for 35 staff.

The formal inclusion of Jersey companies on the Hong Kong Exchange’s (HKEX) approved list of companies able to float on its Exchange is the result of more than a year’s negotiation, research and document preparation, involving Government officials in Jersey, representatives from Jersey Finance and the finance industry.  

Jane Dolby, who heads the team that administers our listing companies commented, “This provides an excellent opportunity for both the Jersey finance industry and overseas companies who wish to invest and raise capital outside of their jurisdiction of incorporation or local geographical area; for these types of businesses, a Jersey holding company, with the opportunity to list on the HKEX, could be advantageous in their search for European and Asian investors.  Jersey is now one of a limited number of jurisdictions which is able to offer businesses the chance to incorporate a holding company with the potential to obtain a primary listing on the HKEX and a secondary listing on another world stock market, or vice versa”.

Jane highlighted some of the advantages of having a Jersey incorporated company as the listing vehicle:

1. Jersey corporate law contains features which provide further flexibility, for instance, in the greater range of corporate entity types available and more flexible dividends, share issue, capital reduction and financial assistance regimes (there is no prohibition on financial assistance in Jersey for either public or private companies)
2. CREST - unlike other offshore jurisdictions such as BVI, Cayman Islands and Bermuda, Jersey shares settle through CREST in the same manner as shares in UK companies. This removes the need for a depository receipt programme and the associated costs
3. The City Code on Takeovers and Mergers applies to a Jersey company in the same manner as UK companies and is now on a statutory footing in Jersey
4. In relation to funds, particularly with the advent of the unregulated fund regime, flexibility and speed of the Jersey regulatory regime, as well as the availability of innovative and market leading incorporated and protected cell structures, make Jersey an attractive jurisdiction
5. Tax advantages - Jersey companies have a number of tax advantages, including no stamp duty on share transfers and a standard 0% corporate tax rate on Jersey incorporated companies
6. Jersey companies can now seek a dual listing in both Hong Kong and London, taking advantage of wider access to capital markets on a basis which reflects the strengths of both exchanges

 

There are over 80 Jersey companies listed on worldwide stock markets, which demonstrates that Jersey is a well respected jurisdiction with which international investors are comfortable.

Jersey has been established as the highest rated offshore international finance centre in the competitive ranking Global Financial Centres Index, published this month by the City of London.
 Jersey is 14th in the latest Global Financial Centres Index (GFCI) overall, following close behind some major city financial centres such as Frankfurt, Sydney and Toronto. The rankings are led once again by London and New York. Only Guernsey, one place below, and Luxembourg (16th) feature in the top twenty among the Jersey finance industry’s direct competitors.

Kathy Gillen, Partner in our Trust and Corporate Services Division commented:

 “This news is particularly pleasing as it has comes so soon after our excellent review from the IMF.  These latest rankings from the City of London study are another endorsement of how positively we are considered by the international finance community. It is encouraging that towards the end of a very difficult year for the finance industry globally, Jersey continues to retain its  position in the world’s top 20 and is now also the highest ranked of the offshore locations.”  

The International Monetary Fund (IMF) has published its assement of the anti-money laundering (AML) and combating the financing of terrorism (CFT) regime in Jersey.

The assessment was based on the Forty Recommendations 2003 and the Nine Recommendations on Terrorism Financing of the Financial Action Task Force (FATF).

The report concluded that Jersey has put in place a comprehensive and robust AML/CFT legal framework with a high level of compliance with almost all of the aspects of the FATF Recommendations.

Jersey complies with 44 of the 49 FATF Recommendations and 15 of the 16 “core” and “key” FATF Recommendation. To put this into context; The USA and Singapore comply with 43 and Belgium 42 with no other jurisdiction reaching 40.

The IMF’s findings reflect favourably on the Island and provides further evidence that Jersey has positioned itself in the “top division” of international finance centres.

Jersey has been invited to take on the role of Vice Chair of the OECD’s Peer Review Group set up at its recent Global Forum to assess how effectively international standards of transparency and exchange of information are being implemented by individual jurisdictions. Kathy Gillen, Partner, Trust and Corporate  Services, believes this work will help to cement Jersey’s status as a co-operative jurisdiction and is further confirmation that Jersey is  viewed as a member of the international community sitting alongside the other elected Vice Chairs (India, Japan and Singapore) and Chair (France)

In May the the Jersey Finance Annual London conference took place and the theme of the day was “Exploding Urban Economics”.

The conference, which was well attended, was facilitated by Sarah Montague Presenter of the Today Programme on Channel 4. It was very informative especially as one of the key talks and discussions concerned Foundations.

That evening Moore Stephens Jersey hosted a dinner at a nearby venue for those people that we had invited to the seminar. It was an enjoyable experience with discussion carrying on about a number of the issues raised at the seminar as well as other business topics. All agreed that it had been a very worthwhile experience

Gavin O’Neil, a member of the Practice Administration Team, has recently become the Channel Island’s Amateur Golf Champion and his victory follows on from winning the Jersey title.

Gavin’s early sports ambitions lay with football, but a knee injury caused him to change direction especially when his father introduced him to golf. He played golf for his school and on leaving he became an assistant to Tommy Horton, who was a well known and successful golf professional. Unfortunately, the life as a young professional was not for him and so he returned to Jersey and actually gave up the sport for a while.

It took two years for Gavin to regain his amateur status and from then on he has not looked back. Supported by Moore Stephens Jersey, Gavin competes in a number of high profile amateur events in the UK and Channel Islands.

Jersey Finance chief executive, Geoff Cook, has called the inclusion of Jersey on the OECD ‘white list’ as a big step in safeguarding the future of the finance industry in Jersey.
Following the G20 summit agreement, Jersey has been placed on a list of jurisdictions ‘that have substantially implemented the internationally agreed tax standard’ along with the UK, USA and with many, but not all, of the member states of the European Union. This list has been published by the Organisation of Economic Co-operation and Development (OECD) at the behest of the G20.
In addition to the ‘white list’ which contains 40 countries, there are two other categories, a so called ‘grey’ list of tax havens that have committed to the internationally agreed tax standard but have not yet substantially implemented it and a ‘black’ list of jurisdictions that have not committed to implementing the tax standard.
A number of Jersey’s competitors including Luxembourg, Switzerland and the Cayman Islands have been placed among a total of 38 jurisdictions on the less favourable ‘grey’ list. Geoff Cook added:
“We are delighted that the G20 summit has confirmed that Jersey is in the top tier of jurisdictions which meet the highest standards of transparency and regulation. It demonstrates clearly that the Island is not a tax haven and that we are seen as a responsible member of the international community.”

Jersey continues to perform well as an international finance centre in the competitive rankings published by the City of London and compiled biannually by the Z/Yen Group.

The Island has been ranked 13th in the Global Financial Centres Index, one place higher than in the previous assessment six months ago.  This Global Financial Centres Index ranks all financial centres and is led by the City of London and New York.  Jersey is one of only five offshore jurisdictions that make it into the top 30.

 While some saw a small fall in their overall rating, others, such as Jersey and Guernsey, actually managed to achieve a higher ranking than previously.

Kathy Gillen, Partner in our Trust & Company Services Division commented, “It is pleasing that Jersey continues to maintain such a strong showing despite the difficult climate.  These rankings assess the competitiveness of major finance centres, so for Jersey to obtain such high rankings is extremely helpful in positioning the Island”.

The rankings also rate finance centres for their attractiveness to particular sub-sectors of financial services and for the first time Jersey has entered the top 10 in the table that ranks market access. Jersey also remains highly ranked in the table based on the findings from the asset-management sub-sector, remaining in sixth place.

The rankings take into account a range of factors such as reputation and business climate, infrastructure, the skills available in the finance centre and the tax regime.

Jersey companies, trusts and limited partnerships will soon be able to benefit from exemptions to the French 3% annual tax which applies to entities that own real property in France.

The change is expected to follow the signature by Jersey and France of a tax exchange information agreement (TIEA) on 23 March 2009. 

Once the agreement has been ratified by the domestic legislatures of France and Jersey, Jersey vehicles will, subject to making the requisite filings with the French tax authorities, be exempt from the 3% annual tax. The effect of this will be to put Jersey vehicles owning French real estate on a level playing field with those of EU member states such as Luxembourg and Ireland. The move is expected to increase the attractiveness of Jersey as a domicile for investment funds and other vehicles acquiring French real estate. Such vehicles will, on the one hand, be able to enjoy the benefits of the efficient regulatory and tax environment offered by Jersey without, on the other, suffering a tax disadvantage in France.  Ratification of the agreement by the domestic legislatures of France and Jersey is expected over the next 12 months.

The signature of the agreement forms part of Jersey's 2002 commitment to enter into TIEAs with OECD member nations. Such TIEAs (which are based on the OECD's standard model) contemplate only the exchange of information on specific request and subject to strict conditions. They do not contemplate "fishing expeditions" by tax authorities.

Latest figures confirm that whilst business has slowed Jersey is well placed to respond to market conditions.

Although the downturn is having some effect on business levels in Jersey, the Island’s diversification is placing it in a much stronger position to meet the challenges ahead, according to Geoff Cook, chief executive of Jersey Finance Limited.

The latest statistics published on behalf of the Finance Industry in Jersey show a small decrease of 3% in the size of the Island’s banking deposits and a 2% decrease in the net asset value of funds when December 2008 is compared with a year ago. In fact, bank deposits and the net asset value of funds actually increased during the final quarter of 2008, although Jersey Finance point out that this rise was related to the weakness of sterling against all major currencies and the fact that Jersey has considerable assets in foreign currencies.

Two new Partners

Phillip Callow

Phillip joined Moore Stephens in 2007 and was appointed Partner on 1 January 2009.  He has specific responsibility for audit and outsourcing work, client liaison and special projects.

In addition to his work with Moore Stephens, Phillip is involved in Jersey life as the Honorary Treasurer of the Association of Jersey Charities and through sitting on a working party looking into the introduction of a Jersey Charity Commission.  He is also a non-executive director of a large UK housing association where he chairs the Audit Committee.

Prior to moving to Jersey, Phillip was a partner in a large UK based international accountancy practice and has also worked in food production and care homes.

Outside work Phillip's interests include cooking, travel, golf and rugby.

Brona Lambert

Brona has been appointed Partner of Moore Stephens with responsibility for the firm’s Outsourcing team and its assignments, providing trust and company administration services within the Finance industry .

Brona, who joined Moore Stephens in 1999, was born in Londonderry and educated at Thornhill College and then at the University of Kent where she graduated with a degree in Accountancy. She then joined an international firm of accounts where she undertook her training.

She is married with four children and plays golf and tennis in her spare time.

A New Manager

Gregg Donaldson has been appointed Manager of the Audit team and has responsibility for a portfolio of clients together with all aspects of service delivery relating to audits.

Gregg was born and educated in Zimbabwe and qualified as an accountant in 1994. He had his own practice for seven years before moving to South Africa for two years and then on to Jersey.

A family man, he has represented his country at volleyball and is interested in rugby, cricket, tennis and squash. 

 

The International Accounting Bulletin has just published its 2008 world rankings.
  
Moore Stephens International has been ranked at 11th this year - which compares with 12th last year. Fee income increased by US$353 million to US$2237 million, (2007 – US$1884m), a growth of 18.7%.
  
Richard Moore, Chairman, commented “We are continuing with our strategy of building strong firms in financial centres and concentrating on delivering quality and value to our clients. The growth shows the result of these efforts, which will continue through 2009. ”

Currently, in the Moore Stephens international network there are:

Firms                                                            366

Offices                                                          647

Countries                                                        98

The quartet of Jersey Rugby Football Club Academy Under 14’s with Clive Barton are striving for Hampshire county honours and are supported by Moore Stephens. They have been attending the county trials.

So far all four have achieved a 100% pass rate and have been asked back to attend the second and final session of trial matches

 

The Royal Court of Jersey recently declared that foreign courts have no power to order trustees to make distributions other than those specified in the trust deed.  

The decision came in a bitter divorce case, Mubarak v Mubarak.  The couple, who lived In the Netherlands, had placed their home into a fixed interest Jersey trust of which they were the sole beneficiaries.  The husband and wife, however, disagreed over their respective interests in the trust.  After they split up in 2001, the divorce court accepted the wife’s claims and ordered the trustee to distribute the trust proceeds accordingly.  The trustee, caught in the middle, asked the Royal Court for directions.

The court’s decision (stripped of all its complications) was that the trust could not be varied by a matrimonial order of either the Dutch or the Jersey court.  It could be varied only by an agreement between both beneficiaries.

The significance of the decision is that trusts in offshore jurisdictions may now feel able to ignore foreign courts that order them to hand over assets to an estranged spouse.  English courts in particular have been prone to issue such orders against offshore trusts, for example in last year’s Court of Appeal decision forcing insurance magnate John Charman to pay millions to his ex-wife from a Bermudan trust.

Should you wish to discuss this matter, please contact Kathy Gillen, Partner, Trust & Corporate Services: Kathy.Gillen@moorestephens-jersey.com

 

Moore Stephens sponsored the latest exhibition of paintings by renowned local artist Robert Tilling.

Those of you who have visited First Island House will I am sure have noticed the striking painting by  Mr.Tilling in the reception are and also throughout the offices.

Jersey's new Foundations Law was passed by the States of Jersey in October, 2008.  Once Privy Council approval has been obtained, the new Law will come into force. This could be at any time in the next three to six months. We hope the sooner!

Kathy Gillen, Partner in our Trust and Corporate Services department commented

“The subject of Jersey Foundations was a key topic at the recent Jersey Finance Conference in London. The response from delegates was positive and it was considered that Foundations will be an interesting addition to the international range of solutions that Jersey can provide.  Notwithstanding the fact that Jersey's strength lies with Trusts, and they will inevitably be the first port of call, the fact that the Island has the capability to give clients and their advisors a choice was seen as very positive”
 
Key facts the new Law are as follows.

Must be incorporated by a “Qualified Person” on behalf of the founder, and an application for incorporation must be accompanied by the foundation charter.

• At incorporation, the Qualified Person must certify that a specific Qualified Person will become a member of the foundation council.

• The name of the foundation must end with the word “Foundation” or its equivalent in a foreign language.

• Entry in the Register is conclusive evidence that on the date set out the foundation was incorporated and the requirements of the Foundations Law were met.

• A foundation cannot engage in commercial trading other than trading, which is incidental to the attainment of its objects.

• The Charter must be lodged with the Registrar on incorporation, and must specify:

 (i) the name of the foundation;

 (ii) the objects for which the foundation was established (which can be charitable or non-charitable or both and can be for the benefit of people or purposes or both);

 (iii) the names and addresses of the first members of the foundation’s council;

 (iv) the details of any initial endowment;

 (v) what will happen to foundation assets should the foundation be wound up and dissolved; and

(vi) if it is to be wound up and dissolved upon the happening of an event or the expiration of a fixed period of time, details of the event or time.

• A foundation does not have to have an initial endowment.

• The Regulations have to establish a Council and provide for the appointment, retirement, removal and remuneration (if any) of council members as how council decisions are to be made.

• The Regulations need to set out the functions of the council and if they may be delegated.

• The Regulations must have a procedure to ensure that a Qualified Person is appointed to the council and if that person tries to resign or is removed, as a matter of law that resignation or removal will not take effect until immediately before the appointment of a new Qualified Person.

• A foundation must have a Guardian and the Regulations must provide for that persons appointment and provision as to how the Guardian can retire, be appointed and be paid (if at all).

• The Founder or the Qualified Person can also be the Guardian, but no other council member can be the Guardian.

• The Guardian has to take reasonable steps to ensure that the council carries out its functions and may require the council to account to the Guardian for the way it has administered the foundations assets and acted in furtherance of the foundations objects.

• Unless the Regulations provide otherwise, the Guardian has power to sanction or authorise an action of the council, which is not permitted by the Charter or the Regulations provided the Guardian is satisfied that the action is in the best interests of the Foundation and that the council are acting in good faith.

• The Council must contain a Qualified Person and must act honestly and in good faith with a view to the best interests of the Foundation and exercise the care, diligence and skill that reasonably prudent persons would exercise in comparable circumstances.

Please feel free to contact Kathy Gillen, Partner if you have any questions or would like to explore the possibility of establishing a Foundation.