By Stuart Pinnington, Head of Alternative Assets, Jersey
Jersey is a progressive international financial centre (IFC) with a global reach and a long history of supporting high-net-worth (HNW) investors and institutions from the Gulf Cooperation Council (GCC) countries.
Offering political stability, high levels of regulation and governance, a broad network of financial professionals, and innovative investment structures, it is well placed to serve a range of GCC investors, from individuals and family offices to sovereign wealth funds.
In this article, we’ll explore Jersey’s connectivity with key GCC countries and the specific expertise and investment structures it has to offer international investors from the Gulf region.
The strong relationship between Jersey and the GCC
Jersey and the GCC have formed a close relationship in recent times. Over the last two decades, a number of major milestones have been achieved.
In 2006, Jersey’s regulator, the Jersey Financial Services Commission (JFSC), signed its first agreement with the Dubai Financial Services Authority (DFSA). This strengthened the relationship between the two jurisdictions and paved the way for increased cooperation and collaboration in the financial services space.
Five years later, in 2011, Jersey set up its first office in the UAE. The same year, the JFSC signed a memorandum of understanding (MoU) with the central bank of the UAE aimed at supervisory cooperation and exchange of information.
In 2017, Jersey signed a double-taxation agreement (DTA) with the UAE to provide greater tax certainty for individuals, investors and businesses operating across Jersey and the Gulf state. Shortly after, in 2018, Jersey became the first IFC to open an office in the Dubai International Financial Centre (DIFC).
In 2019, Jersey and Bahrain signed a MoU to work together to drive FinTech innovation across both jurisdictions. One aspect of this agreement was to give members of both Digital Jersey and Bahrain FinTech Bay – the leading FinTech hub in the Middle East and Africa – the opportunity to share experiences.
A few years later, in 2021, Jersey and the DIFC signed a MoU paving the way for closer collaboration between the two IFCs. 2021 also saw Jersey’s first bilateral investment treaty (BIT) with the UAE signed, providing routes to arbitration for investors.
More recently, Jersey has sponsored or taken part in a number of wealth management events in GCC countries. For example, in 2024, Jersey Finance sponsored a conference on cross-border planning in Saudi Arabia. This conference took place at the Hyatt Regency in Riyadh and explored key issues faced by Saudi and international family businesses such as next-generation trends, governance, and succession planning.
Overall, the relationship between Jersey and the GCC has undergone substantial growth and development over the past two decades. And today, Jersey continues to negotiate a range of agreements with partners in the Gulf region in an effort to increase cooperation and enhance investor certainty.
Expertise in Sharia investing
With more than six decades of experience now, the Jersey IFC is well placed to support the increasingly complex needs of investors from the GCC countries.
Thanks to its global focus, Jersey possesses deep expertise in Islamic finance. Today, Jersey’s fund industry is a global leader in Sharia-compliant asset management and is able to offer Sharia-compliant fund mandates across a range of different asset classes. Meanwhile, in recent years, Jersey has evolved into a specialist centre for alternatives meaning that investors have access to venture capital, private equity, infrastructure, hedge funds and more. Collectively, these asset classes account for nearly 90% of its overall funds business.
It’s worth pointing out that in 2021, Jersey Finance published a landmark study on ‘Global Attitudes Towards Islamic Wealth Management‘. This provided some unique insights into the evolving needs of HNW Muslim investors and revealed that real estate and infrastructure were the two most in-demand asset classes.
Innovative investment structures
Another key benefit of Jersey is that it’s able to offer innovative structures for investors. A good example here is the Jersey Private Fund (JPF). This is a type of investment fund that is designed to provide a flexible and efficient structure for private capital.
A popular choice with investors seeking a fund structure with a lighter-touch regulatory regime, JPFs can be used for a range of investment strategies and asset classes, including real estate, private equity, venture capital and hedge funds. They can be set up quickly using a fast-track authorisation process (often in less than 48 hours) meaning they can help investors capitalise on emerging opportunities.
While the JPF can be a very effective investment vehicle, there are some conditions to be aware of with this structure. For example, the number of investors in the fund must not exceed 50 and each investor must qualify as a ‘professional’ investor or be willing to make an initial investment of at least £250,000.
Robust regulatory and legal frameworks
Of course, the jurisdiction is also known for its robust regulatory framework. In Jersey, investment management businesses must be licensed by the JFSC, which is well respected globally and works closely with other authorities. This provides peace of mind for investors, as they can be sure that firms will always be required to meet the highest regulatory standards. Jersey also offers a modern and sophisticated legal framework, which enables it to lead the way in delivering private client services.
In terms of anti-money laundering (AML) and know your customer (KYC) rules, these are on par with international standards. Note that Jersey takes a risk-based approach to AML, meaning firms will tailor their due diligence processes depending on the perceived risk associated with the customer or transaction.
Get in touch with IQ-EQ Jersey
As one of the best regulated and most cooperative IFCs globally, Jersey is likely to be a key jurisdiction for GCC families, corporates and investment managers looking to invest globally in the coming years.
At IQ-EQ, we have a dedicated team in Jersey that can help GCC investors structure investments both in and out of the jurisdiction. We also have significant AML/KYC experience and can streamline this process for investors from the region. Leveraging our global network of offices and language capabilities, we’re equipped to provide a full service offering to those from the GCC countries.
Read our case study to find out more about the support provided by our Jersey team to GCC-based investors.
If you’d like more information on how IQ-EQ can help you get set up in the jurisdiction, please get in touch with our Jersey office.
