The challenges posed by Covid-19 have only strengthened the reputation of this international finance centre (IFC) as one of the best in the world for HNWs and their businesses
Markets worldwide have been rattled by Covid-19 since the World Health Organisation (WHO) declared a global pandemic on March 11, with the International Monetary Fund forecasting that the global economy will shrink by 3 per cent this year and that around $9 trillion might be lost in global GDP over the next two years.
The jurisdiction of Jersey went into its own version of lockdown in reaction and is now cautiously working its exit strategy for the month of June.
Despite the crisis, Jersey has managed to continue ‘business as usual’ due to proactive planning and economic flexibility that has been enhanced by its technology platforms, according to Allan Wood, global head of business development at Jersey Finance.
‘Jersey has been very resilient,’ Wood tells Spear’s. ‘It’s become apparent that it’s a jurisdiction that can operate under pressure.’ He credits the IFC’s proactive government and active regulators who were quick to shield entrepreneurial activities from major economic shocks that were being felt across the world. In a previous statement, Jersey Finance CEO Joe Moynihan had echoed this, saying, ‘We genuinely look after private wealth on the island, which is around £1.3 trillion – it’s been very effective.’
‘We demonstrated that we’re forward-thinking and we can work together across government, the regulator and the industry to remove barriers that would potentially stop a business from carrying on.’ An example of this was the government’s quick implementation of a new economic substance test, which assured that the adjustments that businesses made to protect themselves from Covid-19 effects will not affect their tax residence status, provided that any changes are temporary.
The Jersey regulator has also speeded up the approval of electronic signature to allow companies to become more digital, which has in fact inspired regulators around the world to take similar steps.
Connectivity has also been a key element that has helped the Channel Island and its businesses stay afloat, Wood emphasises. ‘We almost take it for granted, being so well-connected,’ he says, emphasising the fact that Jersey – which has one of the world’s fastest fibre-optic connectivity speeds at 1-gigabit per second – is surpassed only by Singapore and Taiwan. The government has been working closely with the telecommunications providers, as well as through the existing Digital Jersey tech platform, to launch ‘Connected Jersey’, a hub created to support businesses and homes throughout the lockdown home-working period, also in terms of making sure that the WiFi connections at home are stable.
Jersey’s connectivity with the rest of its global offices has been enhanced too, Wood says. ‘My own business development team, which has members based across the Middle East and Asia, have been connecting on a weekly basis and doing more cross-jurisdictional activities than we ever have before.’ This has been as equally helpful to family offices and HNWs who have stayed in touch with their business entities across global markets. ‘Over this period, we are more productive than we have been before because we’re not going from a face-to-face meeting, we’re going from virtual room to virtual room.
‘We’re actually maximising on time and generating more for the pipeline,’ Wood observes. The wealth management and private client industries have also been ‘performing very well’ over this period. ‘Jersey has had a very strong footprint across financial services.’
This is accompanied by an influx of enquiries from family offices who are looking to do business through Jersey. ‘Over the last two decades, we’ve seen a big increase in the number of enquiries from family offices,’ he says. But Covid-19 strategies aside, the stream of incoming HNWs and their businesses from across the world has been attracted by shared characteristics.
‘The common aspirations of high-net-worth individuals are generally around wealth preservation, asset protection and entrepreneurial privacy – these are all elements that you can find on this island.’ As a result, relationships between HNWs, family offices and businesses with Jersey entities ‘are formed over a very long period of time’, which Wood says is ‘quite uncommon’ among other IFCs.
‘We worked very hard in the last 50 years to make sure that we have created the right environment for investors.’ And it looks like Jersey is only looking to continue this reputation, far into the future.
Find out more about Jersey Finance here