Navigating the Jersey M&A landscape

This article covers the following topics in the context of a Jersey based business:

1. Business Licences and the Control of Housing and Work (Jersey) Law 2012
2. Competition Regulatory Authority and the Competition (Jersey) Law 2005
3. Employees, Work Permits, Registration Cards and the Employment (Jersey) Law 2003
4. Data Protection and the Data Protection (Jersey) Law 2018

Business Licences and the Control of Housing and Work (Jersey) Law 2012

When buying, selling or commencing a business in Jersey it is important to consider whether a new or amended business licence will be required. Under the Control of Housing and Work (Jersey) Law 2012 (the “CHW Law”) a person carrying on an “undertaking” in Jersey needs an appropriate licence for the operation of that undertaking.

A business licence can be granted in Jersey under the CHW Law in respect of any “undertaking” involving work or services other than (i) hawking; or (ii) any work or services performed or offered in Jersey by non-resident traders.

An “undertaking” is defined in the CHW Law and, in summary, means any trade, business, or activity involving work or services performed for, or offered to the public; carried on in Jersey by any person, whether or not carried on for profit.

A “business licence” is issued by the Government of Jersey business licensing unit. It often contains conditions in relation to matters including the maximum number of certain individuals who are permitted to work in or for the undertaking.

Any “significant” change in the ownership of an undertaking will require a new business licence application to be submitted within 60 days of such significant change. It is important to consider this as part of of any relevant transaction.

The definition of “significant” change is within the CHW Law and, in summary, means the acquisition of share capital (whether or not by means of one or more acquisitions) with the result  that the share capital in the company owned by certain persons (Entitled, Licensed, or Entitled for Work Only each as defined in the CHW Law) is, when aggregated, less than 60%.   Thus the requirement for a new business licence is triggered by a sale of a more than 40% stake by local business owners to non-resident investors.

Competition Regulatory Authority and the Competition (Jersey) Law 2005

The Jersey Competition Regulatory Authority (“JCRA”) is responsible for the administration and enforcement of competition law in Jersey, and the main law is the Competition (Jersey) Law 2005  (the “Competition Law”).  JCRA also regulates certain utility service providers.

The Competition Law seeks to protect free, open and fair competition in Jersey by:

• by regulating mergers and acquisitions (M&A); and
• governing the way in which businesses conduct themselves in Jersey by prohibiting anti-competitive arrangements and the abuse of a dominant position.

Regulation of M&A may be applicable where: two previously independent undertakings merge; a person controlling an undertaking acquires control of another (or part of it); an undertaking acquires the whole or a substantial part of the assets of another undertaking so as to replace the selling undertaking; or on the formation of a joint venture.  Mergers and acquisitions involving specified proportions of a market for goods or services in Jersey must be approved by the JCRA in advance of completion.

In addition to JCRA’s powers to issue behavioural, structural and financial remedies, notifiable transactions relating the change in ownership of a Jersey company are rendered void as a matter of law if the JCRA has not approved the transaction prior to completion.

Employees, Work Permits, Registration Cards and the Employment (Jersey) Law 2003

The duties of Jersey employers and employees derive from a number of sources which include the Employment (Jersey) Law 2003. In a local M&A transaction it is important to consider whether any employees will be affected.

The Employment Law applies to both those employed under a contract of employment and to certain individuals who are under an obligation to perform their work personally.

There is a Jersey Employment Tribunal which hears employment related claims. Contractual claims of over GBP10,000 are dealt with by the Royal Court of Jersey. The Jersey law of contract is somewhat different from the English law.

Work Permits – Certain employees from overseas may also require a work permit to work, and any conditions on those should be checked.

Registration Cards – Any person wishing to start new employment must have a registration card. The categories include Licensed and Registered persons.

Customer and Local Services (social security) and Revenue Jersey (tax) – Please also bear in mind if these need to be contacted when buying, selling or commencing a business in Jersey.

Data Protection and the Data Protection (Jersey) Law 2018

The Data Protection (Jersey) Law 2018 and the Data Protection Authority (Jersey) Law 2018 set out the rights of individuals in respect of their personal data as well as the obligations and conditions organisations must follow to process it, and also outline the requirements for organisations to register with the Office of the Information Commissioner.

If a Jersey entity is a “data controller” under these laws, it may need to make notifications in the context of an M&A deal.

Appleby’s Merger and Acquisitions (M&A) team is well-positioned to advise clients on a wide range of M&A activities in Jersey and other offshore jurisdictions. Its unique jurisdictional reach means that Appleby is able to advise clients on complex, cross-border transactions involving the offshore jurisdictions that are most often encountered.  The team regularly work with FTSE 100 and Fortune 500 companies around the globe and those with financial interests in them, to help them deploy strategic growth and restructuring initiatives, whether involving single jurisdictions or complex multi-jurisdictional, multi-disciplinary transactions.

Please do get in touch with Christophe Kalinauckas, Andrew Weaver or your usual Appleby contact if you would like to discuss further.