Jersey special feature section: Foundation law
The approval of the Jersey Foundations Law by Privy Council this week was welcomed by Jersey Finance.
Passed by Privy Council on 10th June, the law will enable the first foundation structures to be established from mid-July. Jersey becomes the first of the British Crown Dependencies to offer foundations as an investment vehicle for financial planning.
Foundations sit alongside existing vehicles such as companies, trusts and limited partnerships for use in financial planning and private wealth management strategies. Whilst similar in design to foundations in other jurisdictions, the Jersey structure introduces the concept of a ‘guardian’ with oversight of the council’s activities.
Robert Kirkby, Technical Director of Jersey Finance, said: ‘There has been significant interest in Jersey foundations for some time now. We expect them to be a particularly attractive option for wealthy clients in civil law jurisdictions where the concept of a trust vehicle is not so familiar.’
Key features of the law can be found on the Bedell Group website but Zillah Howard, Partner at Bedell Cristin (Bedell Group) updates us on the uses for the new law.
Foundation concept: With its roots in civil law, the foundation is familiar for clients based in the Middle East and continental Europe who should feel familiar with its structure. Philanthropy, charitable and non charitable organisations should also find it appealing.
Single, “family silver” or “wasting” assets: As a foundation can be established with the sole object of holding a particular asset, and its beneficiaries don’t have an interest in the foundation’s assets and are not owed a fiduciary duty, Jersey foundations may be of interest to service providers for holding a single, “family silver” and/or “wasting” asset such as a family business, an aeroplane or a boat. In the case of a family business, for example, tensions may exist or develop between different branches of the family, with those closely involved in the business wishing to retain the “family silver” business, whilst those not involved in the day-to-day running of the business may be keen to maximise investment returns by taking advantage of disposal or other suitable opportunities. Such competing interests may present difficulties for a trustee with fiduciary duties to discharge and obligations to have regard to the interests of the beneficial class as a whole. In such circumstances, a foundation may well be a more suitable vehicle, being incorporated for holding the ownership rights, and running the family business.
Flexibility: Although a familiar concept, the Jersey foundation is not identical to foundations seen in other jurisdictions (such as Liechtenstein and Panama) and a key feature will be its flexibility, which will enable a foundation to look more like a trust, or conversely more like a company, as appropriate.
Contracting party: As a foundation, unlike a trust, it will be able to contract and transact business in its own “name”.
Migration: Migration of other foreign law foundations to be taken over as Jersey foundations.
Investec Trust’s Charles Pitter, a Jersey qualified lawyer said: “We’ve been preparing for the introduction of foundations into Jersey law for some time. We are excited about this new legal entity for Jersey and the opportunities it offers clients and those who advise them.” “Foundations have become increasingly popular across the wealth management world, it is more recognisable as a concept especially in countries where trusts aren’t commonly used.”
Profile on Jersey company: Dominion
Dominion is an independent provider of fiduciary services to the financial services sector with a significant number of hedge fund companies as clients.The core activity is trustee and administration services in the area of employee benefit plans, and corporate & personal pension plans. Many of these plans contain significant value.
Theywork alongside the leading compensation and benefits lawyers and accountants in the City, often instructing them to assist with major assignments related to our clients. Dominion has already been involved with thesetting up ofseveral fund and fund management structures, and in one caseinstructed a law firm and an accountancy firm to assist in the establishment ofthe new fund structure where fees will be around ¬£200k initially. This is not untypical of the work referred.
In addition,Dominion has a consultancy arm that provides tax planning and compliance services for individuals who are resident in the UK as well as compensation planning strategies for businesses with a presence in the UK.
Most but by no means all of the clientsthey deal with are financial traders, principals in fund management companies, or senior managers in financial institutions and are mainly not UK domiciliaries, sothey also establish private discretionary trusts for them.
As a true independent, Dominon say theydo not take commissions or so called retrocessions and are entirely transparent about fees.
They have about100 people based in Jersey, the UK and Malta, and are looking to expand.
Anthony Pitcher said. “It is very exciting here at Dominion, dealing with such an influx of new clients and new ideas. We continue to innovate all the time, and that provides quite a buzz. If you haven’t already, I encourage you to visit our website which reflects our recent re-branding.”
DDI +44 (0)1534 765234
MOB +44 (0)7797 825475
DOMINION | expertsinwealth.com
P.O. Box 603, 3rd Floor,
23-27 Seaton Place,
St. Helier, Jersey, JE4 0WH
Jersey special: visiting the island is a treat and great value in 2010
Many Citywealth readers will visit Jersey for business, particularly if an investment manager wanting to scoop up the trust investment clients, but Jersey is also as pretty as a gem, with wild expanses of heather on their cliff top hills and copious golden beaches. As well as this they have a history of German occupationwhich has spawned many tourist sights.
With sterling running against us for Euro or US visits, a visit to Jersey or neighbouring islands should now be at the top of your list particularly if you are planning to take the family away.
Hiring a car is essential and this is easily done at the airport. Although the island is small in comparison to Britain, taxi’s are hard to come by at certain times of day (busy commuter or party times) and can be expensive if you rely only on them to get you around. The benefit of a car is also easy access to the many beaches, vistas and attractions.
There are many tourist sights to visit and buying tickets separately can add up so I recommend buying a “Jersey pass” which for ¬£32 for a two day pass gives you access to pretty much everything you might wish to see. Of note in Jersey, and something the islanders are rightly proud of is The Durrell Wildlife Conservation Trust. Visitors can walk around and see animals including Howler monkeys and Orangutan’s.
The Durrell centre is not a zoo and prides itself on preserving the species that are in danger of extinction. A visit involves walking around for one or two hours and there are areas for children to get excited about (dark rooms for night animals) and monkeys flying above your head in the tree’s.
Another great place to visit is the La Mare wine estate where you can stroll through the vineyards and buy their Jersey Apple brandy and other food and wine goods.
There are many new hotels but you cannot leave Jersey without visiting Longueville Manor, which is almost like visiting Buckingham Palace in London. It is a local “institution.” If you stay, which you should at least once, you will find spacious rooms with views of their gardens and pool. Very French service (excellent) and the odd cat or dog wandering around with confidence and ease. The hotel is family owned and staff have been with the hotel for decades.
Food offerings have come on in leaps and bounds in Jersey and now compete easily with the best the world has to offer. Of particular note are two restaurants: The Sirocco at The Royal Yacht Hotel in St Helier and The Ocean Restaurant at The Atlantic Hotel in St Brelade. The Sirocco is elegant with views of the harbour and the food gives Gordon Ramsey a run for his money. Delicious choices arrive like works of art for your inspection and delight. It is to be added to your list for client invitations. The Ocean Restaurant at The Atlantic Hotel is Michelin starred and it is easy to see why. The food is innovative, mouth watering and in a crisp white colonial setting with attentive staff and an atmosphere that just tells you life is pretty good.
Tourist attractions abound in Jersey, visit www.jersey.com to explore further.