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Foreign Incorporated Companies

 

Reporting of Foreign Companies


If you are a registered trust company business - please click on the following link if you want to upload a FIC Excel Spreadsheet
Excel Spreadsheet upload

The Global Return Foreign Incorporated Companies (“GRFIC”) should only be used by service providers which are registered with the Jersey Financial Services Commission to carry on trust company business.

A foreign incorporated company, managed and controlled in Jersey, can be included on the GRFIC unless the company:-

  • ultimately has any Jersey resident individuals owning more than 2% of the ordinary share capital of the company at any time during the year of assessment.
  • is in receipt of rental income from land or property in Jersey.
  • is involved in the development of land or property in Jersey.
  • is in receipt of income from quarrying in Jersey.
  • is in receipt of income from the importation and/or supply of hydrocarbon oil.
  • is within the definition of a financial services company with a permanent establishment in Jersey and subject to tax at the rate of 10%.
  • is within the definition of a utility company and subject to tax at the rate of 20%.
  • is carrying on trading activities through a permanent establishment in Jersey.

For the avoidance of doubt a foreign incorporated company, managed and controlled in Jersey, which is within any of the above categories, must file a tax return on their own behalf.

Please note there will be instances where the foreign company is owned by non-residents through a Jersey nominee. It is acceptable to ‘look through’ the Jersey nominee to determine the residence of the shareholders and to include such companies on the global return if all other criteria are fulfilled.

Information required

The information the Comptroller requires to be declared in respect of each of the foreign incorporated companies included on the GRFIC includes:-

  1. The name of the company.
  2. The place in which the company is incorporated.
  3. The date on which the company is first managed and controlled from Jersey.
  4. The date on which the company ceased to be managed and controlled from Jersey (where applicable).
  5. The activities of the company by reference to the criteria set out below (non-mandatory for 2017 but please include if able to do so).

Category 1) Trading – trading through a permanent establishment in Jersey

This category applies if at any time during the company’s financial period(s) ending in the year of assessment it has traded through a “permanent establishment” in Jersey. Trading companies include all companies that are not investment holding, IP holding, non-income producing asset holding or dormant companies (see below). Trading companies that carry on an active business of, for example, buying or manufacturing goods for the sole purpose of selling the goods to third parties, typically independent persons. They also include companies that provide a service, such as provision of advice or staff to third parties. Companies that predominantly provide services (e.g. management services, treasury services) to connected parties/entities within the same corporate group (a "group" of companies should largely be defined by reference to the definitions of "subsidiary" and "holding company" in the Companies Law, but should also include companies which are clearly part of an economic group but may not be part of a group in a legal sense because of the role of a trust or other vehicle in the structure.) should be included in Category 2 below. A “permanent establishment” includes a branch of the company, a factory, shop, workshop, quarry or a building site, and a place of management of the company, but the fact that the directors of a company regularly meet in Jersey shall not, of itself, make their meeting place a permanent establishment. A company which has an undertaking in Jersey (within the definition of Article 25 of the Control of Housing and Work (Jersey) Law 2012) / obtained a “license” from the Population Office would be regarded as having a permanent establishment in Jersey. Companies engaged in property development in Jersey should also be included in this category. For the avoidance of doubt, holding companies of trading companies should not report their activity as “trading” but rather as investment holding.

Category 2) Trading – group services companies

This category applies if during the financial period(s) ending in the year of assessment the company has predominantly provided services (e.g. management services, treasury services) to connected parties/entities within the same corporate group. For the avoidance of doubt it is irrelevant whether the company has a permanent establishment in Jersey; all group services companies should be included in this category.

Category 3) Trading – other

This category applies if at any time during the financial period(s) ending in the year of assessment the company has “traded” in accordance with the definition outlined above but has not carried out any of that trading activity through a permanent establishment in Jersey and does not fall within Category 2 above.

Category 4) Investment holding

This category applies if during the financial period(s) ending in the year of assessment the company did not carry on a trade, nor did it fall to be non-income producing asset holding, IP holding or dormant in accordance with the definitions below. These companies typically hold assets such as equities, real property and debt receivables and receive the following types of income:

  • dividends and other similar distributions from shares, securities, stock, bonds, unit trust, and other similar investment instruments;
  • interest and income equivalent to interest, including amounts received in lieu of interest;
  • rental income and other forms of funds from holding real estate;

Companies that predominantly hold intellectual property assets should not be included in this category, but rather included in Category 6 below.

Retirement annuity companies approved under Art 131B of the Income Tax Law should be included in this category.

Category 5) Non-income producing asset holding company

This category applies if during the whole of the financial period(s) ending in the year of assessment the company held assets with no intention of exploiting those assets for short term income, profit or gain. An example would be ownership of property where there is no intention of letting that property for income, developing the property or disposing of the property as part of a trade. If a company prima facie falling within this category predominantly holds intellectual property it should not be included in this category, but should rather be included in Category 6.

Category 6) IP holding

This category applies if the predominant activity of the company during the financial period(s) ending in the year of assessment was the holding of intellectual property.

Category 7) Dormant

This applies if during the whole of the financial period(s) ending in the year of assessment the company had no significant accounting transactions and they are not required to report the activity as non-income producing asset holding. Significant transactions do not include:

  • filing fees paid to the Jersey Financial Services Commission
  • penalties for late filing of a tax return
  • consideration received on the issuance of shares

You can download the spreadsheet on which you are required to make a GRFIC by clicking on the link below. Save the spreadsheet on to your system so that it is available for uploading.

Registered Trust Company Business - Excel Spreadsheet download

Once you have completed the GRFIC, you can upload the spreadsheet via the Upload menu option to the left of this page.

The GRFIC must be submitted to the Comptroller of Taxes no later than midnight on 31st December in the year following the year of assessment. Failure to make a return by the filing deadline may result in each foreign incorporated company being the subject of a fine of £250.

 
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