I have been working alongside professionals in the UAE since the mid 1980s and, during this time, the links between Jersey and the Middle East generally and Abu Dhabi in particular have strengthened and have been shown in many cases to be longstanding and worthwhile.

Why have these relationships endured? There are clearly benefits offered by Jersey, the largest of the Channel Islands and one hour from the City of London. Financial centres are entwined more than ever and the network of relationships knows no boundaries.

In April, at the G20 meeting in London, the OECD placed Jersey and Guernsey, along with the UAE and the UK, in the 40 White Listed jurisdictions. This acknowledges that the Channel islands are not ‘tax havens’, although they remain low or zero rate tax jurisdictions.

Jersey has moved into the 14th place in the Global Financial Centres Index produced by the City of London. At the last count, bank deposits in Jersey currently stand at £206 billion and investment funds currently hold £241 billion or foreign currency equivalent.And trusts hold huge amounts of property and other assets, in addition.

The Channel Islands have been self governing for over 1000 years and have been strongly influenced by the British legal system. Jersey’s responsive and developed regulatory system combine as a stable platform for many banks, lawyers, accountants and other professionals to provide services required for international business and private wealth.

The services we provide typify activities and interest shown in Jersey by GCC countries and those working and living in them.

For example, the Bedell Group comprises some 350 people in five jurisdictions and is a law firm specialising in corporate activity, investment funds, stock exchange listings, securitisation, private equity, capital markets, litigation and property. The law firm consistently features in respected and independent directories such as in the Legal 500 and Chambers, and each area of activity we undertake is rated in the top or second tier rankings.

This is complimented by the fiduciary services business of Bedell Trust Company providing full administrative services for companies (whether incorporated in Jersey, Cayman, the BVI or elsewhere) trusts and limited partnerships. One area specialises in institutional business such as securitisation administration, employee benefit trusts and incentive schemes for multi nationals and investments fund administration.

The other area provides full services both in Jersey and Geneva for private wealth ranging from structures with funding in excess of £1 billion to individuals, protecting assets for retirement and legitimately sheltering from taxes that would otherwise be payable, for example, by UK non domiciliaries and whether resident in the UK or living in the UAE.

Assets are held in many parts of the world but are frequently financial and business investments and UK property.

NEW DEVELOPMENTS
On my last visit to Abu Dhabi, there was great interest in three new developments in Jersey. These relate to the introduction of a new law on foundations, the expert and unregulated funds regimes and improvements to the companies law to attract more joint ventures, group holding and special purpose vehicles.

In these difficult times, there are opportunities that can be seized and sophisticated structuring is increasingly being undertaken by our teams of City-trained lawyers and administrative staff. The challenges of managing existing business in the credit crunch environment needs such expertise which in turn strengthens the new arrangements being proposed.

Any flows of business, transfers of assets and relocation of personnel across borders frequently create benefits that can be enjoyed in a safe, reliable and predictable location and enable difficulties to be avoided.

The importance of ring fencing assets by not putting all eggs in one basket has never been so clearly illustrated as recently. It therefore makes sense to spread wealth and identify benign jurisdictions which have a track record of experience and safe and efficient handling.

Jersey has avoided some of the large scandals and corruption of other financial centres through prudent and conservative government policies and sensible regulation adopted over decades.

FOUNDATIONS
To return to recent developments. Foundations first. Foundations are like a company in that they have legal personality, a council like a board of directors and a founder like subscribers to a company. They have a charter and regulations like a memorandum and articles of association. The charter is registered and open to inspection but the regulations are private. Certificates of incorporation and good standing can be obtained. The Law is expected to come into force this summer. Unlike a company, they have no shareholders. Instead, they are created to act in pursuance of a stated purpose or for the benefit of companies or individuals (beneficiaries) or a mixture of both purposes and beneficiaries. As the beneficiaries have few rights unless the foundation gives them rights, a guardian oversees and supervises the council to ensure the purpose is carried out and the beneficiaries’ interests are protected.

The council can include the founder but one council member must be a regulated Jersey company or individual authorised to carry on this type of financial services business. The guardian can be the founder or the regulated council member or an independent person chosen by the founder. The foundation can own any assets anywhere in the world, but cannot be used for trading directly although it can hold companies that engage in trade.

The main uses are to provide a top holding vehicle for a group of companies, fulfil philanthropic or charitable functions, provide for succession and protection planning, legally avoid taxes, avoid probate on death for wealthy families in particular, and to provide the protector or corporate director of existing company or trust structures.

Foundations have been well received by those in the Middle East particularly to fulfil the objectives of a trust but without the need to explain that concept. The founder can retain greater control and influence over a foundation. They also appeal to those familiar with European and other civil law countries.

The documents can be very flexible and tailor-made for the needs of the relevant organisation or individual. They explain the relationship of all those involved. It is not expected that foundations will hold assets directly in high taxed countries. These will continue to be owned by companies or trusts but often with a foundation behind them.

INVESTMENT FUNDS
The second development is that, just over a year ago, Jersey launched its unregulated funds regime for funds which require a minimum investment of over $1 million or currency equivalent. This enables private or, indeed, public high net worth investment funds to be established in accordance with Jersey law and to be certified compliant by the law firm promoting it.

This results in a faster, cheaper, more flexible approach which has proved in only one year, in difficult investment conditions, to be hugely popular and beneficial.

Expert funds are for funds which require a minimum investment of $100,000 or foreign currency equivalent and have a light regulatory framework which is necessary or desirable for certain countries and investors. A number of these funds are listed on the London AIM market or the Channel Islands Stock Exchange. This may be either a primary or secondary listing which provides advantages in choice of situs of the fund, tax, speed and cost.

IMPROVED COMPANY LAW
The advantages for Middle Eastern business of the third development speaks for itself in that obviously the use of improved arrangements facilitating joint ventures, group holding arrangements and, specifically, dedicated companies to provide more control for the owner have a natural appeal.

CONCLUSION
All financial centres are dependent upon and connected to other global centres. Jersey is no exception and the credit crunch has reached the four corners of the world. The financial world is bound together and the strength or weakness of one impacts on another. It is for this reason that Jersey has attracted sovereign wealth, institutional and international corporate as well as individual wealth for reinvestment and use elsewhere. The positive strength and reputation of Jersey is based upon its role as part of the international financial landscape and evidences the good reasons why the services that the Island offers are available and used to good effect.