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Jersey introduces statutory migration regime for foreign limited partnerships

Insight 14 September 2020

Jersey introduces statutory migration regime for foreign limited partnerships

With effect from 17 July 2020, Jersey now possesses a statutory regime allowing non-Jersey limited partnerships to migrate into Jersey.

Coming under the Limited Partnerships (Continuance) (Jersey) Regulations 202 (the “Continuance Regulations”), the regime gives managers of existing structures further flexibility to access the market leading regulatory environment and expertise in Jersey.

Rationale for transition

Jersey is an associate member of the Organisation for Economic Co-Operation and Development and a G20 white list jurisdiction.

This status has made it attractive to global investors and managers alike and its existing legislation accommodates the establishment of Jersey registered limited partnerships both inside and outside the scope of funds regulation.

Following the introduction of Jersey Private Funds regulation in 2017 the concept of the Designated Service Provider (“DSP”) was introduced.  The flexibility of this regulation has permitted the use of non-Jersey registered entities being classified as Jersey Private Funds on the basis that a Jersey registered DSP has been appointed.”

This additional process from Jersey goes a step further which permits existing non-Jersey structures to migrate to Jersey.

Certificate of continuance

In order to transition into a Jersey registered limited partnership, the foreign limited partnership will need to receive its “certificate of continuance” from the Registrar of Limited Partnerships in Jersey (the “Registrar”).

Upon such certificate being awarded, the Limited Partnerships (Jersey) Law 1994 (the “Limited Partnerships Law”) will apply to the limited partnership.

Application steps

An application for continuance must be made to the Jersey Financial Services Commission (the “JFSC”) by the eligible foreign limited partnership and be accompanied by:

  • A certified copy of its certificate of formation.
  • A declaration signed by each general partner that the limited partnership:
    • Is solvent,
    • Has applied to the JFSC for its consent to the creation of interests under the limited partnership in accordance with Article 10 of the Control of Borrowing (Jersey) Order 1958
    • Has applied to the registrar for registration as a limited partnership under the Limited Partnerships Law, and
    • Is not to have legal personality on its continuance within Jersey.
  • Any additional document that may be required by the JFSC.
  • An application fee of £605 (this amount subject to changes by the JFSC).

The application must also be accompanied by evidence that:

  • The application has been approved by the general partner, and
  • If the laws of the jurisdiction in which the foreign limited partnership was formed requires an authorisation to continue into Jersey, such authorisation was obtained.

An “eligible foreign limited partnership” is a limited partnership without legal personality formed under the law of a jurisdiction outside Jersey. The Registrar will not grant a certificate of continuance if:

  • The limited partnership is prohibited from continuing within Jersey by its home jurisdiction
  • The limited partnership is being wound up,
  • A receiver or manager has been appointed in relation to any of the assets of the limited partnership,
  • An application has been made to a court in another jurisdiction for the winding up of the limited partnership or for the limited partnership to be subject to equivalent insolvency proceedings and has not been determined, or
  • Has been deregistered for a purpose other than continuing as a limited partnership within Jersey in accordance with these Regulations.

The continuance of a limited partnership into Jersey does not:

  • Create a new limited partnership;
  • Affect any partnership interest; or
  • Affect any act done, rights, powers, authorities, functions or obligations of the limited partnership, any partner or any other person before its continuance.

A continuance will not release a limited partnership from any judgment, ruling, order, claim, debt or liability (existing or future). Any pending civil or criminal proceedings (by or against the limited partnership or related partner or other person) will not be affected.

Managers of private funds of up to 50 investors should expect to benefit from the Jersey Private Funds regime for a faster transition.

The JFSC also highlighted a few risks applicable to service providers. From warning against the high-risk nature of registered offices only to compliance with AML/CFT requirements, the JFSC is making its case for service providers to have adequate processes in place for foreign limited partnership to continue in Jersey.

How can Sanne help?

Let's talk...

The Continuance Regulation supports the rapidly rising attractiveness of Jersey as an alternative investments centre. It is important to note the increasing focus of the JFSC on service providers to support this migration. With being one of the largest and most experienced fund administrator in Jersey, Sanne has both the ability to support your migration whilst ensuring compliance with regulations. We would be delighted to speak with you to discuss how Sanne can assist. For more information, please contact Ashley Vardon or Paul Séjournant directly.

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Ashley Vardon Head of Jersey Private Equity - Jersey
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Paul Séjournant Director, Product Development - United Kingdom
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