Jersey – A Natural Home For Family Offices

Jersey has made no secret of the fact that it strives to be a leading jurisdiction for private wealth management and that it is open for family office business. Determining the number of family offices currently in Jersey is not a straightforward task as there is no universally accepted definition, and no publicly accessible register. However, if one takes the view that a single family office must comprise of a wealth holding structure (company, foundation, trust, etc.) which was established for the benefit of a single private individual and the members of his/her immediate family and that the net value of the private wealth held by and/or administered by that structure is in excess of US$500,000,000, then, the author's conservative estimate would be that there are between 20 to 25 such single family offices currently operating in or from within the Island.

Whilst all aspects of the Island's private wealth industry continue to expand steadily, local trust practitioners report a noticeable upswing in the number of enquiries regarding either the establishment of a new family office in Jersey or the relocation of an existing family office to Jersey.

The fact that several high net-worth individuals have selected, or are actively considering selecting, Jersey as a home for their wealth is no great surprise as the Island has a number of features which make it ideally suited as a base for a sizable family office including the jurisdiction's longstanding political stability, tax-neutrality, convenient location, reputable courts, well-established and comprehensive legal system, robust regulatory regime, and good communications and transportation links.

Geographic and political context

Before expanding on these attributes it is necessary to put the Island in context. With a poetical flourish the celebrated French novelist Victor Hugo, an erstwhile political exile in Jersey, once described the geographical situation in these terms "Les îles de la Manche sont des morceaux de France tombés dans le mer et ramassés par l'Angleterre." (lit. trans. - The Channel Islands are parts of France thrown in the sea and picked up by England).

Jersey, the largest of the Channel Islands, is a self-governing island approximately nine miles by five miles in size, with a resident population of just over 100,000 people. It is conveniently positioned between the United Kingdom and mainland Europe being a mere 20 kilometres from France and less than one hour's flight away from London. Whilst it is technically a "possession of the English Crown" with close ties to the United Kingdom, it is self-governing and has its own financial, legal and judicial systems. It owes its independence largely to a quirk of medieval history; in 1204 Jersey remained loyal to King John of England following his forfeiture of most of his possessions in mainland France to the King of France, Philippe Augustus, and the consequential division of the Duchy of Normandy. Owing to their proximity to France and their strategic importance during the One Hundred Years War, all of the Channel Islands received several privileges, benefits and concessions from a succession of English monarchs during the 14th and 15th Centuries which have remained in place ever since.

Jersey finance industry commenced in the early 1960s when several international banks first opened branch offices in St Helier, the Island's capital. From those initial, small seeds, Jersey has now blossomed into a significant international financial centre (IFC).

Jersey now has a well-developed, mature business environment with a number of key institutions, chief amongst which are (i) the Jersey Finance Services Commission (JFSC) - the Island's regulatory authority with a mandate to maintain Jersey's position as an international finance centre with high regulatory standards; (ii) Jersey Finance, the Island's business development and public relations institution which aims to champion the competitive position of Jersey's finance industry, both locally and internationally and (iii) Locate Jersey, an initiative of the States of Jersey (the local government) which hopes to encourage businesses and high net worth individuals to relocate to the Island. Jersey's principal and oldest court, the Royal Court, exercises a civil and criminal jurisdiction and regards itself as being a "court of equity". Since 1961 there has been a separate Court of Appeal which sits roughly six times each year. Further appeals can be made to the Judicial Committee of the Privy Council, but only with special leave.

The number of Jersey residents working in the Island's finance industry now stands at more than 13,000 - the largest of any Crown Dependency or Overseas Territory - providing genuine choice for any principal or manager of a family office. Furthermore, the Jersey Branch of the Society of Trust and Estate Practitioners (STEP) has more than 1,200 active members, the highest percentage of any STEP branch calculated by reference to the number of adults in employment in each jurisdiction's finance industry. This makes Jersey a rich soil for any family office looking to lay down its roots. There is a good supply of accountants, company administrators, bookkeepers, trust officers and so on in the Island making it a relatively easy place for any high net worth individuals (HNWIs) wishing to establish a...