Laying Down Foundations for A Better Future
Now, more than a decade on, our team in India continues to promote Jersey’s expertise in managing international capital, and subsequent new laws have made the jurisdiction even more attractive. To develop closer ties with India, we remain focussed on providing a commercial framework that meets the needs of the region’s investors and their advisers. It’s also vitally important that Jersey keeps its legislation and regulations under review, driving further innovations to support international investment, while at the same time maintaining the robust standards for which our Island is known and respected.
The work of the Jersey Finance team in Mumbai and New Delhi, along with interaction at senior government level and a continuing dialogue between regulators, are all part of the collaborative journey we’re taking towards a better future where everyone prospers. In this brochure we look at what gives Jersey a competitive edge, putting it at the forefront of global banking, wealth management and corporate services. We have also included case studies from Jersey companies such as Appleby, Bedell Cristin, Standard Chartered, Hawksford, JTC and Ocorian to illustrate how Jersey as a jurisdiction is strengthening relations with India.
Jersey for India
Case Studies from Jersey-Based Companies
Appleby’s Private Client & Trusts team provide trust, company and foundation services to private individuals, families and fiduciary businesses. Appleby advises on all aspects of trust, foundation and company law, including the establishment, administration, restructuring and termination of private, charitable, and commercial structures.
Appleby advised an Indian family who became UK resident. The family built a substantial business in the UK and established several Jersey law trusts to hold and manage their wealth. A dispute arose between two brothers resulting in the family being engulfed in litigation for several years. Consequently, they were keen to avoid future expensive and public disputes. Appleby has extensive expertise in assisting families to find a pragmatic way forward and, to govern their future affairs, Appleby advised upon and prepared a family constitution. Whilst the constitution contained extensive mechanisms to deal with any family dispute in private, it also contained by way of example the following bespoke provisions:
■ An advisory council which allowed family members to set:
(i) investment policies and strategies for their wealth under professional management; and
(ii) distribution of wealth policies including making provisions for education, healthcare, housing and weddings
■ Provisions governing future spouses not being entitled to family wealth on divorce or death
■ Confidentiality and non-disparagement provisions in relation to the family affairs
■ Penalties applicable to family members who do not abide by the terms of the family constitution
Appleby advised an Indian resident family who own a business involved in a variety of products and services operating in India as well as several other countries. The group was looking to expand its businesses into certain parts of the world and some of the family members were looking to relocate from India to overseas (including the USA and the UK) to assist with that expansion. Appleby was approached by the family to prepare a Jersey trust structure to hold and own newly formed group companies which would look to operate in the expansion of the business and which would provide the family with asset protection and tax efficiencies.
Bedell Cristin is a leading offshore law firm with an international focus. Acting for a wide range of clients, from financial institutions, multinationals, large corporates and high net worth individuals, to regulatory bodies, government agencies and private investors, the firm has been providing expert legal advice to the offshore banking and finance industry since the 1960s.
Bedell Cristin has a designated India Group with the stated objective to become the Jersey firm of choice for Indian investors where the nature of the assets and investors allow and is offering Jersey as an alternative to other international finance centres for Indian investors, particularly in connection with inbound investment into the UK. A recent example of our expertise advising Indian investors, was Bedell Cristin’s involvement with advising the directors of a parent company with numerous Indian subsidiary companies in the energy sector in relation to a financing arrangement with a leading European Bank and our remit included advising the trustees of a Jersey trust structure, in relation to the provision of guarantees under such facility agreement. The Jersey trust was set up for the principals behind the parent company and Jersey was chosen as the jurisdiction of choice for its reputation as one of the world’s leading international finance centres with a long history of doing business with India, a judicial system based on common law principles, in line with India’s own legal system and its adherence to international standards of financial regulation and reporting.
Bedell Cristin’s size, international outlook and strategic positioning mean it is capable of handling legal advice for complex cross-jurisdictional transactions for Indian investors and the firm sees this as an area of growth for the future.
Hawksford, with its years of experience in this area is able to build unique family office solutions based on the goals of individual families; as the circumstances, needs and expectations of their clients are all unique, so are their services. Their client is a high profile ultra-high net worth international family with a non-resident Indian settlor. The client wished to establish a number of offshore structures to hold their commercial activities outside India as well as a charitable vehicle to manage their philanthropic endeavours. Confidentiality is key due to the high-profile nature of the client and their business activities. The structure is primarily based in Jersey but also includes a Singaporean holding company utilising Hawksford’s administration services in Singapore. The client wished to centralise the structure in Jersey. This was due to the Island’s strong and respected regulatory framework along with its political and economic stability, and its informed and predictable judicial process, ensuring that any family disputes would be appropriately addressed through the court systems should that be necessary.
The Solution: Hawksford worked with the client’s legal team and tax advisers to provide bespoke trust documentation, retaining various elements of settlor control whilst also providing in-house support for addressing corporate governance and legislative requirements such as economic substance. They ensured that complex transactions progressed smoothly with a multi-skilled administrative team. Hawksford were able to utilise their network of global investment advisers and property managers to assist the client, the trustees and the directors with decision-making in relation to their commercial structures. Hawksford established a number of Jersey law trusts and foundations including some to utilise the Liberalized Remittance Scheme together with a Singapore holding company. A Jersey charitable foundation was also established with the council members comprising a mix of family members and professionals. Hawksford’s secure IT systems and servers ensured the risk of data breaches was minimised and the client’s confidentiality maintained.
JTC worked closely with the patriarch of a wealthy Indian business family and his UK and Indian advisers in setting up a Jersey Holding Company structure as part of his move from India to the UK. The family’s desire was to globalise their business and wealth outside of India. This entailed the patriarch moving residence to the UK and setting up an optimal structure to act as their global base from which to grow their wealth and assets outside of India.
Jersey was chosen due to its strong reputation and regulatory track record as well as its tax neutrality and proximity to the UK. It was important for our client that we married the UK tax and legal needs of his move to the UK alongside the Indian Tax, Foreign Exchange Management Act (FEMA) and Reserve Bank of India (RBI) considerations with him becoming a non-resident Indian (NRI).
This Holding Company continues to own a substantial stake in his Indian businesses as well as a growing portfolio of investments and businesses which stretch across Europe and the US.
Ocorian’s client, a high net worth Muslim and Indian national based in Dubai, is married with three children and is the owner of a large retail business with branches across the UAE and holds UK properties. He wanted to establish a structure that could protect the interests of his daughters; secure and consolidate his UAE assets; create a lasting legacy; and assist with tax planning given that India is contemplating changing its tax laws.
Ocorian established a Dubai International Financial Centre (DIFC) foundation (based in the UAE) to hold the client’s Dubai properties as it’s the only private wealth vehicle able to hold real estate in Dubai. UAE foundations are the only full-fledged solution for succession planning, asset protection and business continuity for Muslims in the UAE.
The foundation was then linked to the client’s Jersey trust, with the trust as beneficiary of the foundation. This ensured the foundation benefitted from the trust’s existing succession plan and the settlor could reserve rights and limit intervention from family members, as permitted under Jersey’s trust regime.
The client’s wealth and assets were grouped under one roof and adequately structured in line with his succession plans.
Ocorian’s presence in the UAE and Jersey meant the whole process was managed seamlessly and Ocorian continues to provide administration, trustee and council member services for both structures.
The client, a high-net worth business owner of Indian nationality, has been a client with the Bank for over twenty years and recently moved to the United Kingdom from Cyprus.
He traditionally always held cash with the Bank because of limited personal experience of investing in markets. The client wanted his cash to work harder and looked to Standard Chartered Jersey for expert advice and knowledge.
Building on the long relationship of trust, a Standard Chartered Jersey Wealth Specialist and Relationship Manager worked closely with the client to identify the objectives, investment preferences and risk appetite to provide a bespoke solution for the offshore funds. During the discussions, it became clear that the client had a preference for environmental, social and governance (ESG) themed investments and Standard Chartered was able to apply its sustainable investing expertise. All of this was achieved without being able to meet face-to-face due to the coronavirus lockdown and travel restrictions.
Through its global reach and breadth of expertise, Standard Chartered Jersey catered for the client’s diverse needs, navigating complex cross-border conditions. The client proceeded with the Bank’s recommendations and the portfolio has so far delivered on the client’s desired returns. The client has since doubled their Assets Under Management held with Standard Chartered Private Bank. The client relationship has continued to evolve and the Relationship Manager is helping the client, who holds a Non Resident External Account (NRA) deposit with Standard Chartered’s arm in India, to explore a Foreign Currency Non-Resident (FCNR) loan to release liquidity for further possible investment. The client can benefit from the high rates of interest in India, but lend against these assets in another currency, which is an attractive proposition for non-resident Indians.
The Bridge for Indian Investors and families into the UK and Europe
Working with Indian resident families, one theme is prevalent: diversify. Diversify currency risk, asset base and jurisdictional exposure for the family’s interests.
With the UK being seen as ‘open for business’ from an immigration standpoint, be it through the coveted investor
visa or the skilled worker route, tax residency in the UK is increasingly an option, with the advantageous resident
non-domiciled regime being particularly popular.
Jersey plays a key role in the wealth structuring of the families we look after, from being the location of the banks that provide the accounts required to operate a tax effective structure, to being the form of law for their international will and the home of their excluded property trust that will serve the succession and asset protection goals of the family long term.
The significant expertise on the Island and standout performance in looking after non-domiciliaries in particular, means it is well placed to look after global Indian families.
Jersey remains relevant to many, if not most, cross-border wealth preservation and business structures for Indian business families. The entire wealth advisory community of Jersey provides comprehensive, sustainable and robust wealth planning and business restructuring solutions for Indian clients. The ‘post pandemic’ client has clear, concise objectives, be they driven by impact investing, technology, Shariah law, sustainable family governance or simply a succession plan that is specifically adapted to their new family dynamic and conducive to continual future growth. As trusted advisers, a client relies upon us to create the most suitable and viable structure for their businesses, as well as for their loved ones. It is therefore always a pleasure to work in partnership with Jersey-based lawyers, professional fiduciary service providers, tax advisers, bankers and wealth planners, ensuring that the ultimate result is a bespoke structure, that meets the precise requirements for each client. This, coupled with Jersey’s historic and reputable legal system, provides clients with a huge degree of comfort and reassurance.
Stephenson Harwood Middle East LLP
In the current global environment where there are many options available to high net worth individuals, our experience has been that Jersey is often the first choice for private wealth structures, not just because of the robust legal regime but also because of the high level of professionalism and quality advice that is available from Jersey-based advisers. In the course of advising our clients on estate and succession planning, and developing sustainable structures, among other things, we have worked closely with Jersey advisers, and we have seen that the mix they bring of a sound foundational knowledge together with an understanding of commercial realities, has seamlessly complemented our own approach leading to successfully customised solutions for our clients.