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David Carswell, our Managing Director and Head of Corporate Services in Jersey, recently featured in the 14th edition of ‘Jersey – First for Finance’, where he shared his knowledge and insights on the depth and breadth of Jersey’s comprehensive corporate services industry.
There’s no doubt that the uncertainty stemming from the pandemic, coupled with instability in Europe and markets further afield, a greater focus on ESG, and the drive of digitalisation have made the global corporate space a particularly active one over the past twelve months.
In Jersey – a jurisdiction renowned for always being on the front foot, and one which has adapted well to global market conditions – this has provided an opportunity to demonstrate our knowledge and capabilities across the corporate services space.
On the one hand, the uncertainty caused by the pandemic – as well as political and economic volatility – has caused a spike in corporate restructuring activity, as firms have sought to adapt and future-proof themselves for the new era. Hawksford, like many other service providers in Jersey, has been able to support this restructuring work, drawing on the Island’s strengths and offering ready access to deep pools of director, compliance, risk and legal expertise.
We have also seen a rise in global companies looking to Jersey to support their proactive growth strategies and merger, acquisition and financing activity, valuing the expertise Jersey can offer in terms of cross-border insights, administration capabilities and governance expertise to enable their diversification strategies into new, emerging areas.
Figures reflect this trend; the Jersey Financial Services Commission (JFSC) reported that corporate activity remained particularly strong in 2021, with high levels of company incorporations over the year, meaning that Jersey ended 2021 with its highest ever year-end number of live companies on the register (34,523).
There is good reason for the buoyancy in Jersey’s corporate services sector, and that is down largely to the depth of experience and expertise it can offer, particularly in terms of legal, tax and back-office advice. The social capital in Jersey means that bringing together global networks of lawyers, tax advisers and other intermediaries to work together and deliver expert services to global corporates is remarkably straightforward.
It’s pertinent that, last year, Jersey marked its 60th anniversary as an international finance centre (IFC) and there are today approaching 14,000 professionals working across the financial services spectrum in Jersey. There are few, if any, IFCs of a similar size that can offer that level or strength of experience or that range of diverse expertise.
From company incorporation and formation, real estate and listings work, to securitisation and other issuance vehicles, TopCos/HoldCos, Islamic structuring, employee benefit and payroll services, the corporate service range in Jersey has broadened considerably over the last decade or so.
Of particular note is the fact that Jersey remains a jurisdiction of choice for corporate entities wishing to list on global exchanges, again as a result of its international reputation as a well-regulated jurisdiction with a highly-skilled and experienced financial workforce. The Island has the greatest number of FTSE 100 and AIM companies registered outside the UK, while the combined market capitalization of Jersey companies listed on global exchanges, from NASDAQ to the Hong Kong Stock Exchange, stands at £180bn (March 2022).
At the heart of Jersey’s international appeal remains its ability to balance enduring political and economic stability, high standards of regulation, and world-class legislation on the one hand, with a commitment to product innovation on the other – and over the past year we have continued to see Jersey’s corporate services sector remain agile to meet the needs of global entities.
One particular trend to have emerged has been the demand for cross-border corporate expertise. The macro trend of globalisation shows no signs of slowing down as firms look to diversify their geographic strategies and look for new opportunities in different markets.
As a result, the demand for specialist expertise in international structures is at an all-time high, and this is right in Jersey’s sweet spot.
At the same time, though. this global diversification is happening against a backdrop of increased regulatory complexity and heightened scrutiny. Global rules around substance and growing compliance and disclosure obligations have provided additional challenges for corporates, who have needed specialist support to manage those requirements.
Jersey – thanks to endorsements from global bodies, including the EU and OECD, for its robust regulatory environment – has been experiencing an inward flux of a corporate activity from other jurisdictions which have struggled to keep up with the pace of change.
This robust regulatory platform is not at the expense of innovation though – Jersey has been mindful to continue to evolve its proposition in recent years to support an increasingly diverse range of corporate clients – from entrepreneurs, startups and SMEs to international businesses, global institutions and investment banks.
An example of that evolution was the launch of the International Savings Plan (ISP) in 2019 – a product designed to enable multinational and international companies to set up savings plans in the jurisdiction for non-resident employees. It added a welcome element to Jersey’s range of services for internationally-dynamic businesses.
More recently, Jersey also made amendments to its Limited Partnership (LP) legislation to introduce a new statutory basis for limited partnerships to be migrated from other jurisdictions, providing greater legal certainty for managers and investors. The change resulted in a sustained increase in LP structures moving to Jersey from other locations, and Hawksford provided corporate structuring support for one of the first to do so.
Of course, one of the big trends through 2022 has been the accelerated integration of ESG into corporate structuring, and Jersey has again been able to meet the call of firms in this regard. In early 2021, Jersey Finance launched its sustainable finance vision and strategy, ‘Jersey for Good’, which set out a pathway for the Island to become recognised as a leader in this space.
Understanding that being able to deliver an ESG strategy and go beyond to underline their sustainable credentials, corporate clients have increasingly sought directors and company secretaries with specific ESG expertise. Supported by its strategy, Jersey has been nimble in meeting this need, focusing on director skills to give corporate entities the governance, strategy, risk management and evaluation frameworks they need.
Finally, the sector where Jersey continues to innovate most rapidly is digital – particularly in the application of digital tools to support corporate governance, regulation, compliance, efficiency and productivity.
Firms are looking more than ever before at how automation and digitisation can support their strategies, and Jersey can meet that demand head on, thanks to its world-leading, super-fast fibre connectivity, which is providing firms with a foundation for developing digital tools and services for a broad range of corporate clients – from reporting, governance, onboarding and regtech solutions, to high speed payments, depositary services and data management – all adding to a corporate’s ability to work more effectively.
The message is clear: Jersey has long been the jurisdiction of choice for corporate organisations to seek expert advice, director services and administrative support. The world continues to change, though, and at an increasingly rapid pace, with thinking around ESG, the impact of technology, and global regulatory and market shifts all influencing how corporates act.
Jersey’s corporate services providers must continue to adapt with them in order to provide the support they need – and the evidence suggests they are absolutely on course to do so.
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