New Guidance Notes, published last week (26 April) to give industry clarity around the interpretation of recently introduced economic substance legislation in Jersey, are reflective of Jersey’s ongoing commitment to nurture a substance-driven environment for fund managers, according to the Chair of the Jersey Funds Association.

The governments of Jersey, Guernsey and the Isle of Man published the ‘Joint Guidance Notes’ following the introduction of new economic substance legislation on 1 January this year. That legislation was brought onto the statute to meet the requirements of the EU's Code of Conduct Group for Business Taxation relating to levels of substance for certain tax resident entities in Jersey, following a comprehensive assessment from the EU that ultimately saw Jersey formally recognised as a cooperative jurisdiction.

Mike Byrne, Chairman of the Jersey Funds Association, said:

“These guidance notes are helpful, providing interpretations of how the law should be applied by Jersey-based fund managers and highlighting what it means for service providers and fund structures – particularly in terms of reporting and the tests the law provides for around governance, income generating activities, and physical office and staff presence.

“Jersey has long been a jurisdiction of substance with a regulatory environment that is internationally-recognised and already in tune with global thinking on substance, and the expectation is that managers here will be able to meet the criteria. Against that backdrop, these Guidance Notes are a further example of Jersey’s approach to governance best practice and a natural next step that further bolsters Jersey’s proposition as a fund management jurisdiction.”