Both structures added a new legal status of limited partnership, which has already been frequently used as collective investment tools by non-Jersey residents, offering a more diversified pool of options.
The SLP form, which started to take effect on April 20, has a legal personality separate from its partners without the need to be incorporated. That means limited partners generally are not liable for the debts or obligations of the SLP.
In contrast to the stipulation by the 1994 Law for limited partnership, the new arrangement allows an SLP to own properties, clinch contracts as well as litigate and be litigated against under its own name.
The characteristic is expected to entice investors doing businesses with counterparts in a jurisdiction that does not recognize limited partnership, as most countries and regions give nod to the concept of separated legal personality.
An SLP is similar to a Scottish limited partnership in various aspects, but it could be created for any legitimate purpose instead of just etween persons carrying on business with a view to profit. /p>
The ILP structure, which started to be operational on May 24, features flexibilities similar to those in the SLP. The key difference is that an ILP should be a body corporate with perpetual succession.
The real corporate status could help boost confidence in the ILP of its counterparts in overseas jurisdictions. Besides, most jurisdictions recognize that a body corporate is governed by the law of the countries in with it is incorporated.
As for tax purposes, SLPs and ILPs are treated in the same way as ordinary Jersey limited partnerships. That means the structures could be of particular interest to Chinese financial institutions on the investment side.
Jersey tax law doesn apply to a non-Jersey resident partner where the limited partnership's activities are solely of an international nature. It means where the limited partnership is set up as an investment vehicle, the non-Jersey resident partner is only liable to income tax on Jersey-source income other than bank deposit interest.
In addition, any profits which are of a capital nature arising from a disposal of an investment by a limited partnership, is not liable to Jersey tax as there is no tax on capital gains in Jersey. It makes such vehicles very attractive for non-Jersey resident investors as their tax liability will be zero.
SLPs and ILPs can be appealing to Chinese banks, asset managers, corporations, fund promoters and other institutional investors in structuring and management of investment funds, structured finance vehicles and other asset and corporate holding structures.
Jersey has a solid financial services environment to aid global business expansion and overseas investment, financial planning and asset protection on behalf of corporate and institutional business and investors around the world.
With the rapid growth in the Chinese economy and its stepped-up efforts to go out for business opportunities, the role of Jersey as a gateway to Europe, Africa and Western markets has taken on added significance.
Jersey held onto its position as the top-ranked offshore financial center in this year Z/Yen Group ranking of the top 75 global financial centers. Jersey ranked 23rd overall, indicating an increasing legitimacy of offshore business models, and a more diversified list of products that allow the islands to offer more than simply low taxes.
