Looking to establish an investment management firm in the Channel Islands?
This guide, the second in our series, sets out the key steps and considerations for setting up your business in Jersey - a world-class financial centre known for its robust regulation, pragmatic approach and access to global markets.
You can find our guide for setting up shop in Guernsey here.
Jersey – an internationally recognised funds hub
Jersey is a well-regarded jurisdiction for fund managers, offering a stable, sophisticated regulatory environment and flexible structuring options. The island’s position outside the EU means it can independently tailor its regime, while remaining fully engaged with European and UK markets via the national private placement regimes (NPPR).
Jersey has built a strong reputation for offering proportionate and commercially attuned regulation, enabling both emerging and established managers to thrive. It also boasts a modern legal infrastructure, experienced workforce and an ecosystem of corporate service providers (CSPs) to offering support through the full life cycle of a firm.
The Jersey Financial Services Commission (JFSC) acts as the island’s financial regulator and has worked closely with industry to streamline licensing pathways for new managers. The island offers competitive options for start-ups, including the ability to launch as a ‘managed entity’ using a local corporate services provider (CSP), or as a fully independent firm with a full fund services business (FSB) licence.
The legal and licensing framework
Managers intending to provide investment services in Jersey are generally required to hold a Fund Services Business Licence under the Financial Services (Jersey) Law 1998 (FSJL). There are two main types of FSB license:
1. Managed entity – This model enables a new manager to leverage the infrastructure of a licensed CSP, including directors, compliance personnel and office space. In return, the regulatory burden is lighter: the manager need only meet the core principles of the FSB Code. No dedicated premises or local hires are required.
2. Full Codes FSB Licence – This model is for managers seeking to operate independently. Full compliance with the FSB Code is required, including physical presence and staff in Jersey. A separate Business Licence will also be needed under the Control of Housing and Work (Jersey) Law 2012 in order to employ local staff.
We regularly see managers choosing to first register their firm as a managed entity and only later transition to a full licence as the business grows. Timeframes vary depending on licence type and completeness of the application. Most managed entity applications are completed in around two weeks; full licences naturally take longer due to the need for local hiring, premises and more extensive documentation.
The regulatory process
Under the provisions of the FSJL, certain key persons, including significant shareholders and the MLRO and MLCO, will be required to submit personal questionnaires to the JFSC to ensure the persons are 'fit and proper'.
Where a business licence application is required, this will require a business plan to be submitted to a Jersey government that provides a number of relevant details including the number of employees the Jersey manager will seek to employ on island and their roles/skills.
Managers can also apply to act as an Alternative Investment Fund Manager (AIFM) under the Alternative Investment Fund Managers Directive as part of its FSB application, with no need for a separate process. Each EU and UK jurisdiction has its own NPPR requirements, however, some jurisdictions being more complicated and onerous than others. We would advise that local advice should be obtained where cross-border marketing is planned.
Costs and ongoing obligations
For a 'full codes' license, the manager must meet certain financial requirements including, a minimum net assets position of at least £25,000 and meet certain Adjusted Net Liquid Assets over Expenditure (or "ANLA") requirement. A managed entity, on the other hand, is subject to lighter financial tests.
Steps to incorporate an investment manager in Jersey
For further details in relation to the steps to incorporate an investment manager in Jersey, please refer to our guide 'Setting up a Jersey Manager – The Options and Opportunities.'
Wrapping up
With a pragmatic regulator, choice of licensing paths and flexible access to UK and EU capital, Jersey offers an attractive gateway for investment managers. Whether launching independently or with CSP support, Jersey provides a stable and internationally respected platform for growth.
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