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Economy and Banking Sector of Jersey

Jersey
Location
Europe
Population  (2011)
97 857
EU Status
not part of the EU
Currency
GBP (Pound sterling)
Nominal GDP (2015)
4.1 bln GBP  (+0.03%)
Credit Ratings (as of Sep 2016)
-/-
Consolidated Banking Assets (2016)
134.88 bln GBP  (-16.52%)
Deposit Guarantee
50 000 GBP
Number of Banks
27

Jersey is a British Crown dependency, situated in the English Channel. Jerseyis a "self-governing possession" of the British Crown and is considered internationallyas a "territory for which the United Kingdom is responsible" rather than a sovereign state.Jersey is not a part of the European Union, although it's withinthe European Union's customs area.

Financial services sector (banks, fund managers, investment trusts, accountancy and legal firms) is the main contributor to the GDP of Jersey, followed by tourism and hospitality services.

Banking landscape of Jersey is rather diversified and includes British clearing banks, merchant banks, private banks and a range of international banking groups.

List of Banks in Jersey
Banks in the Channel Islands

National Currency

Pound Sterling (GBP)

Jersey's official currency is the Pound sterling (GBP): Jersey is with the United Kingdom. Jersey pound is a local issue of banknotes and coins denominated in GBP rather than a separate currency.

GDP

Nominal GDP (2015)Real GDP Growth (2015)
4.1 bln GBP  (+0.03%)2.0 %  (2014: 4.0 %)

According to Government of Jersey, nominal GDP of Jersey in 2015 was 4.1 bln GBP.

Jersey outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.8% over the past 2 years (2013 - 2015). In 2015 real GDP growth was 2.0% which was above the Euro Area average (1.6%) and above the European Union average (1.9%).

Real GDP Growth in Jersey. Chart 1. Real GDP Growth in Jersey. Source: Government of Jersey.

Inflation Rate

CPI, Year Average (2016)
1.9 %  (2015: 1.0 %)

According to Government of Jersey, inflation rate in Jersey in 2016 expressed as annual percentages of average consumer prices was 1.9% which was above the Euro Area average (0.2%) and above the European Union average (0.3%).

Inflation Rate in Jersey. Chart 2. Inflation Rate in Jersey. Source: Government of Jersey.

Credit Ratings (as of Sep 2016)

Fitch Moody's
- -

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in Jersey: 0.0 - 20.0%

Withholding tax rates applied on payments of interest and dividends in Jersey are shown in Table 1.

Dividends Interest
Natural person, resident 20.0 %0.0 %
Natural person, non-resident 0.0 %0.0 %
Table 1. Withholding tax rates in Jersey.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Jersey: 10 Signed Agreements

Jersey signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Estonia
 Guernsey (Jul 2013)
 Hong Kong (Jul 2013)
 Isle of Man (Jul 2013)
 Malta
 Poland
 Qatar
 Singapore (May 2013)
 United Kingdom

There are also several agreements between Jersey and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):

 Luxembourg (Apr 2013)

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 34 Signed Agreements

Jersey signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Argentina
 Australia
 Austria (Jun 2013)
 Canada
 China
 Czech Republic
 Denmark
 Faroe Islands
 Finland
 France
 Germany
 Greenland
 Iceland
 India
 Ireland
 Japan (Aug 2013)
 Latvia (Dec 2013)
 Mexico
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 South Africa
 Sweden
 Turkey (Sep 2013)
 United Kingdom
 United States

There are also several agreements between Jersey and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):

 Brazil (Jan 2013)
 Hungary (Jan 2014)
 Indonesia
 Italy
 Slovenia (Nov 2013)
 Switzerland (Sep 2013)

Automatic Exchange: Starts in September 2017

Jersey signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in Jersey
IGA in effect since 13 December 2013, Model 1

Jersey has FATCA agreement with the U.S. in effect since 13 December 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Jersey are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Jersey's financial accounts hold in U.S. financial institutions will be reported to Jersey's authorities.

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount
50 000 GBP

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Jersey are summarised in Table 2.

Scheme Participantsall credit institutions operating in Jersey (including branches of foreign banks), branches of Jersey's banks abroad
Eligible Depositorsprivate individuals, charities
Covered Accountsall deposit accounts
Covered Currenciesall
Maximum Protected Amount50 000 GBP
Paid In CurrencyGBP

Table 2. Deposit guarantee scheme in Jersey.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Pound sterling) Foreign Currency
- Aaa (prime)

Foreign currency deposit ceiling for Jersey is Aaa (prime).

Banking Supervision

Financial Services Commission

Banking Sector Structure

Number of Banks
27
Consolidated Assets (2016)
134.88 bln GBP  (-16.52%)

Currently there are 27 credit institutions operating in Jersey.

In 2016 consolidated banking assets in Jersey were 134.88 bln GBP. The consolidated banking assets' evolution is shown at Chart 3 below.

Consolidated banking assets in Jersey. Chart 3. Consolidated banking assets in Jersey.

All the credit institutions operating in Jersey can be classified into several categories. Table 3 summarises the number of banks in each category.

CategoryNumber of Banks
Banks8
Branches of foreign banks19

Table 3. Number of banks by category in Jersey.