Jersey: a crown dependency in the English Channel famous for its cliffside walks, scenic cycling routes, beaches and historic architecture. Situated just 22 km from the French coast in the Bay of St Malo, Jersey is the largest of the Channel Islands and is rich in history, attracting thousands of tourists to its sandy shores each year.
However, one of the main attractions of Jersey — particularly for expanding businesses — is its relaxed employment legislation and notable lack of taxes. But are attractive taxes Jersey’s only real offering for businesses? Or is there more to this haven than what meets the eye?
Jersey’s flexible legislation, coupled with a skilled workforce and good links to the global market, makes it an ideal location for any organisation looking to employ overseas. Its common language, familiar currency and culture make Jersey a much simpler expansion location than other countries.
The island has a strong agriculture and fishing sector that forms a significant part of Jersey’s heritage. You’re likely familiar with delicious dairy products from the island’s renowned Jersey cows or perhaps Jersey Royal new potatoes. Over 300 businesses operate in this industry, employing more than 2,000 people during peak farming season.
More notably, Jersey boasts a thriving business environment with a highly developed communications network and a progressive attitude towards establishing corporate offices. And over time, the island has earned its place as one of the world’s largest offshore financial centres. Jersey’s commercial environment has seen the island become home to various leading financial institutions, banks and law firms, meaning world-class services and contacts are easy to come by.
You can find much of Jersey’s finance industry in St Helier, the island’s largest settlement. The diverse offshore finance sector accounts for 40% of Jersey’s economic output, spanning dozens of areas of expertise and employing nearly a quarter of the island’s workforce.
But of course, the driving force behind the success of Jersey’s finance sector is tax (or lack of it).
A tax haven home from home
Foreign businesses operating in Jersey benefit from absolutely zero corporate taxes. There are also no capital gains, wealth, gift or inheritance taxes in Jersey.
This means that all profits from Jersey companies owned by non-Jersey residents are subject to a 0% tax rate across their worldwide income, with a 10% tax rate applying to a restricted segment of local financial services organisations (known as the ‘Zero-Ten’ regime). However, development projects and companies receiving rentals and utilities are subject to a 20% tax rate.
There’s also a 5% tax on all goods and services supplied in Jersey, although financial services and international services are both exempt.
If you’re exempt from paying tax, you’ll still have to submit a tax return to the Jersey tax authorities. In Jersey, the tax year follows the calendar year, meaning the annual deadline for tax returns is 6 PM on 31 December. Any companies filing their returns late will face a fee of £250. But unless you’re a public company, there’s no requirement to audit or file annual accounts.
It’s worth noting that the new global minimum tax rate of 15% will apply to Jersey-based businesses in the coming years. Whilst it will take some time to implement, the ‘Zero-Ten’ tax policy will no longer be possible and will affect organisations headquartered in Jersey.
Everything you need to know about employing in Jersey
As a crown dependency, Jersey loosely follows most UK case laws and principles, particularly when it comes to employment. Jersey’s statutes are all heavily influenced by British law. Yet, most employment law in Jersey is governed by The Employment (Jersey) Law 2003, which covers all aspects of employment, from notice periods and minimum wage to paid leave and working hours.
In Jersey, social security contributions are capped for both employers and employees. Employer contributions currently sit at 6.5% on the first monthly £3,686 of an employee’s salary, and employee contributions are levied at 6% to the same level. As of 1 January 2022, the minimum wage in Jersey rose to £9.22 an hour, and most employees are paid monthly.
Under The Employment (Jersey) Law 2003, there are no limits on the number of hours employees can be contracted to work in one day, but an employee is entitled to an uninterrupted break of at least 24 hours every seven days. It’s up to the employer how they implement this with their employees.
When it comes to annual leave, each employee is entitled to a minimum of three weeks of paid leave each year, although employers can offer additional days. This entitlement doesn’t include paid bank holidays. The year for holiday to be taken typically starts on an employee’s first working day and ends on the same day the following year.
New parents in Jersey are entitled to a shared 32 weeks’ paid leave following the birth of their baby, with a ‘Parental Allowance’ of £232.47 a week. There’s no statutory entitlement to paid sick leave, but employers can offer it at their discretion. Usually, employees claim Short Term Incapacity Allowance (STIA) if they’ve been off sick for three days or more, also paid at a standard weekly rate of £232.47.
Employers aren’t required to pay pension contributions to their employees in Jersey. Instead, they’re paid by the government to Jersey-based employees who qualify. But to claim a pension, the employee must have paid contributions for at least four and a half years. Currently, the full rate old-age pension is £235.27 per week.
To terminate employment, an employer must provide ample notice coinciding with the employee’s years of service. For example, an employer must provide two weeks’ notice for two years of service, three weeks’ notice for three years of service etc. An employee must give a maximum of four weeks’ notice if they’ve been employed for five years or longer and a minimum of two weeks’ notice if they’ve been employed for more than 26 weeks.
To ensure you never miss a beat and expand your business into Jersey seamlessly, why not work with a professional employer organisation (PEO) like TopSource Worldwide? Take advantage of our comprehensive employer of record services today, and we’ll help you employ in Jersey quickly and smoothly. Get in touch now!