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Jersey Routes to Market

So you've decided to expand your business in Jersey and researched your market. Now it's time to decide how you will register or expand the business. What is the best, most viable option for your company, your products, and yourself? Which is the path of least resistance?

In Jersey, due to the attractive tax incentives, foreign businesses often set up offshore branches to benefit from the tax breaks and relative anonymity offered on the island.

There are other forms of businesses, which UK investors can set up in Jersey and a good starting point is the Jersey Enterprise website.

Registering a Business

Before a business can be opened in Jersey, a license is required from the Jersey Regulation of Undertakings office. The process also includes the naming of the business, which is organized through the Jersey Financial Services Commission.

In addition to obtaining a license, all new businesses must register with the Social Security Department. The contribution is around 12.5% of a self-employed persons salary and the contributions vary for other forms of company, although this needs to be finalized before business activity can commence.

Here are your typical options when expanding a business into Jersey:

Limited Liability Companies

The most popular form of business for UK investors, a limited company is limited to between one and thirty shareholders and the owners are only liable to the amount they invest in the business. It costs around £200 to set up and there are additional administration costs involved. Any business run by non-Jersey residents must pay income tax but there is a flat rate of £600 per year.

Sole Traders

In Jersey, it is possible to conduct business as a sole trader without registering your company. The owners liability is unlimited and they will be personal liable for any potential losses made by the business. The costs for setting up this sort of business and the tax varies.

Partnerships

Like a sole trader, owners of a partnership are personally liable for any losses the business might make. The partners need to provide the following information before the company can start trading:

• The names of all partners who own the business
• The objectives and activity of the business
• The money invested by each partner
• How profits and costs are distributed
• The responsibilities of each partner in the running of the business
• Holiday allowances
• The arrangements for introducing new partners
• What to do if a partner dies, becomes incapacitated, retires or wishes to decrease their involvement in the company.
  

Licensing

Licensing is the permission for someone else to use your intellectual property rights: either a patent, trademark, trade secret, or copyright. Different types of license include:

• Non-Exclusive License - A non-exclusive license implies that your intellectual property rights can be awarded to more than one licensee.

• Exclusive License - A little more complex because, although the license may not be exclusive to one licensee, it may be exclusive to a geographic location, a certain product, or limited area of use. For instance, you may grant a licensee exclusive use of the rights in France, yet grant another licensee its use in Germany.

• Patent License - The allowance of another party to use your patented product, design or process.

• Trademark License - Trademark licensing means permission is awarded to a licensee to sell a product or service. However, the licensor retains more control in order to ensure that quality is maintained. Quality control is in place to uphold the image of the brand / product / service / licensor, and therefore sustain customer confidence and satisfaction.

Franchising In Jersey

Franchising is the licensing out of a business name, product, technique, philosophy, trademark, etc, for a percentage of the income. Instead of setting up new outlets as part of your expansion, you license your existing business blueprint out to franchisees who then set up and manage it for you.

The benefits of franchising your business in Jersey include: more freedom, as the franchisee takes on major responsibilities; minimal expense; lower cost and higher profits; potential for fast growth; brand building.

Disadvantages of franchising a business in Jersey: although few, rely predominantly on your franchisees. They include: poor quality franchisees; franchisees not declaring all income; poor performance.

The doors are open for franchising in Jersey. Led by brands such as Marks and Spencer and Coffee republic who have both established a presence in the bailiwick, franchising in Jersey is now becoming a popular route to market.

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