Investors who open a cryptocurrency company in Jersey benefit from a straightforward company formation process, as well as an overall favorable business climate.
A crypto license in Jersey is not in place per se, however, companies in this business field need to register with the main regulating agencies in the country, as detailed below.
Our team offers complete assistance to investors who wish to open a company in Jersey and have specific questions about registration, licensing, and control.
You can find out more details about crypto companies in the territory below and can reach out to us as needed.
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Requirements for a crypto license in Jersey
While there is no specific license, companies that deal in virtual currencies need to register with the Jersey Financial Services Commission.
The Commission is also the one to supervise the activities of these exchanges.
In addition to the registration that can be seen as a crypto license in Jersey, companies engaged in this field are also subject to anti-money laundering laws.
For this purpose, virtual currency exchanges need to comply with the laws, regulations, and procedures destined to detect and prevent money laundering and terrorist financing.
Virtual currency exchanges are supervised businesses and they are subject to registration with the Jersey Financial Services Commission (JFSC).
An exemption is, however, in place for these businesses: the JFSC allows virtual currency exchanges with a turnover below £150,000 per year to benefit from an exemption from registration.
This exemption is designed to allow these businesses to test the virtual currency exchange delivery mechanism in a favorable environment.
The threshold is calculated as the cumulative value of each transaction for purchasing or selling a fiat or virtual currency (in a calendar year, calculated in GBP at the time of the transaction).
Even in case of exempted virtual currency exchangers, the JFSC has the power to investigate the manner in which these entities comply with the Money Laundering Order and the Anti-Money Laundering/Combating the Financing of Terrorism regulations, as necessary.
The activity related to issuing tokens is regulated by the Sound Business Practice Policy. This means that the issuer is required to implement systems, controls, policies and procedures.
A token issuer, as part of an ICO in Jersey, is also required to observe other mandatory criteria, among which to receive the express consent of the Control of Borrowing (Jersey) Order (COBO) before starting the activities for the launch.
A summary of the token’s features, the rationale for the launch, the redemption process, as well as the management of the assets and their security for the token holders need to be clearly outlined before the token launch.
You can find out more about the general requirements for initial coin offerings in Jersey from this article.
Conditions for investors who open a cryptocurrency company in Jersey
As previously stated, there are no present licensing requirements for cryptocurrency companies, thus a crypto license in Jersey is not in place in a specific form.
Investors who open a company in Jersey need to follow a number of steps, starting with reserving a company name, and then preparing the incorporation documents.
In order to open a cryptocurrency company in Jersey, investors will present the incorporation documents to the Jersey Financial Services Commission.
The following company registration fees were in place at the time this article was written:
- 2-hour company incorporation: £670;
- 1-day company incorporation: £425;
- 2-day company incorporation: £305;
- 3-day company incorporation: £242;
- 5-day company incorporation: £165.
The tax treatment of cryptocurrency businesses
The following income tax treatment applies for different types of cryptocurrency activities in Jersey, as per the Government regulations:
- Mining: not subject to income tax when performed on a small or irregular scale;
- Exchanging: liable to income tax if they fall under the trading category (both in the case of incorporated and non-incorporated entities);
- Use: the profits and losses of companies engaged in cryptocurrency transactions are to be reflected in the relevant accounts and are subject to tax under the regular income tax principles;
- GST treatment: income from mining activities received by GST-registered businesses in Jersey generally falls outside the scope of GST.
Investors who open a cryptocurrency company in Jersey can find out more about the tax treatment of the activities involving cryptocurrencies from our team.
The evolving nature of cryptocurrencies can mean that the regulations, referring to taxation and the present version of a crypto license in Jersey in the form of registration can be subject to change.
If you have any inquiries on this matter, please reach out to our team.
General company formation steps in Jersey
In order to be able to launch an ICO in Jersey, a cryptocurrency company needs to be incorporated as a Jersey company, as this activity cannot be undertaken as another vehicle.
As previously mentioned, Jersey legal entities are subject to registration with the Jersey Financial Services Commission and the applicable fees.
Below, our team highlights the general process for company formation in Jersey:
- Choose the business form: the limited company is the type of business form used for a cryptocurrency company in Jersey;
- Choose the company name: the name of the new legal entity cannot be the same as one that is already registered, nor too similar to an existing name;
- Prepare the documents: these are the company’s constitutive documents, the Articles of Association, and the Memorandum; investors will also decide the shareholding structure, appoint the directors and decide on a registered address in Jersey;
- Register the legal entity: once the documentation is complete, the application for registration is submitted to the Jersey Financial Services Commission for the formal registration of the legal entity, which will be confirmed through the issuance of a Business License.
These steps are also observed by those who wish to open a cryptocurrency company in Jersey.
Our team is able to offer guidance and assistance throughout the incorporation steps.
Jersey company management and control
Limited companies in Jersey are subject to certain requirements concerning their management and control.
While a cryptocurrency company in Jersey does not fall directly under the scope of the economic substance for companies (as its activities are not explicitly included in the list of relevant sectors), it does need to comply with other requirements.
The company in Jersey needs to have at least one shareholder and one director (who can be the same as the shareholder), and a company secretary.
When there are 2 company directors, one of them can also act as secretary, otherwise, the Company Secretary will be appointed separately.
The director can be a natural or legal person and it should be noted that, although they are subject to limited liability as the name of the corporation suggests, they can still be personally liable for wrongful acts undertaken in their capacity as corporate directors.
The director of a cryptocurrency company in Jersey shall:
- act in good faith, honestly, and in the best interests of the company;
- exercise care and diligence, exercise his powers purposefully and in accordance with the Articles of Association;
- the director shall disclose any conflicting interests and has the duty to appoint a suitable company secretary.
Our team can also give you details about the director’s liabilities.
The company will also need to open a corporate bank account, as a step during the general incorporation process.
Companies in Jersey are required to have Employer’s Liability Insurance when they hire employees. They can also have other insurances to remain protected in case of a claim against them.
We assist investors who open companies in Guernsey irrespective of the industry in which they activate.
Contact us for more information about our services for setting up a business in Jersey.