By Yusra Sarkar
The Jersey Financial Services Commission (‘JFSC’) recently announced new legislation that will introduce a new statutory basis for limited partnerships (‘LP’), to be migrated to Jersey from other jurisdictions, providing greater legal certainty for managers and investors. LPs are frequently used for alternative fund structuring.
Limited partnerships are popular vehicles for alternative fund structuring but transferring already established LP’s to Jersey can be challenging. The new legislation aims to make it much easier to move foreign LP’s to Jersey. It’s expected that it will also be easier for lawyers to give tax advice to asset and fund managers who want to migrate their LPs to Jersey.
‘Jersey is an increasingly popular place for funds and while incorporating LP’s here is simple, migrating them from other jurisdictions hasn’t been straightforward. Especially in the context of alternative fund managers looking at reduced global travel for the foreseeable future, many are looking to move structures closer to home. The island’s highly educated workforce, reputation for excellent service and reputation for excellent governance are making Jersey a jurisdiction of choice,’ says Ryan Taylor, Director, ZEDRA Fund Services Jersey.
Under Jersey’s new regulation, foreign LP’s can apply for continuance under Jersey law, if:
- The legislation of the jurisdiction in which the LP currently operates allows for continuance in another location or doesn’t expressly exclude continuance of the LP in Jersey.
- The structure is solvent.
- The LP is not in the process of being put into administration and it is not being deregistered from the jurisdiction in which it is currently administered (except for the sole purpose of gaining continuance in Jersey).
The LP’s general partner will be required to apply to register under Jersey’s LP law (to the JFSC). The general partner must also be solvent. Under the legislation, an LP cannot be a legal personality upon its continuance in Jersey.
Under the new legislation, the JFSC will also require that the LP’s general partner is in favour of continuance in Jersey and that this can be proven.
In cases when the LP which is to be continued under Jersey law is an investment fund, the JFSC will require that further approvals and authorisations have been sought before it will grant a continuance.
‘In particular, I believe that we will see that a number of foreign LP’s will look to migrate to Jersey and become Private Funds. These structures will need to register with the JFSC for approval. Still, in true Jersey fashion, this process is expected to be efficient and straightforward, making the island an attractive location for existing LP’s,’ says Ryan.
For more information, please contact Ryan Taylor, Director, ZEDRA Fund Services Jersey.