More and more Chinese businesses are using Jersey holding companies as listing vehicles to raise funds on the London Stock Exchange, attracted by the island's stability, tax-neutral environment and comprehensive legal structure.

Recent Capgemini World Wealth data show that the Asia-Pacific has now become the region with the largest number of high net worth individuals, a sign that China is already having a major impact on the global economy.

"Thanks to Jersey's internationally recognized regulation, and our position as a gateway to Western markets, Jersey is well placed to support the needs of Chinese investors and their investment ambitions," says Geoff Cook, chief executive officer at Jersey Finance, a not-for-profit organization representing and promoting the island as an international finance center.

"It is Jersey's intention to continue to raise its profile in the key markets in China. We plan to raise awareness of Jersey, not simply through the promotion of products and services but more importantly, through educating the intermediaries and the authorities in the various business regions of China about the jurisdiction itself," says Cook.

According to Jersey Finance, demand from Chinese companies looking for a tax neutral jurisdiction in which to establish a listing vehicle has been particularly strong, with five more Chinese groups listed on the London Alternative Investment Market in the last 24 months.

Appleby, a provider of offshore legal, fiduciary and administration services, is one of the Jersey-based companies that advised two recently listed Chinese groups, Camkids Group Plc and JQW Plc.

"In a backdrop of economic reform, domestic demand in China is starting to gather momentum. Chinese companies, raising finance for expansion, are increasingly looking for a tax neutral jurisdiction in which to establish their listing vehicles - and Jersey expertly fits the bill," says James Gaudin, a partner at Appleby.

Gaudin adds that Chinese businesses are becoming more aware of listing requirements, which is reflected in the strong demand from all sectors.

Carey Olsen is an international offshore law firm with offices in Jersey that is watching the Chinese market.

"We definitely think China has immense potential to become fully integrated into the global investment market and we have commenced an initiative to raise the awareness of the usefulness of Jersey as a conduit for international investment and are considering establishing a representative office as part of our overall Asian expansion plan," says Robert Milner, a partner at Carey Olsen.

Milner was impressed by the enthusiasm shown by the locals toward the increasing ability of Chinese businesses to invest outside China during his recent business trip to the country, where Carey Olsen has experience in advising Chinese companies on both raising and deploying capital.

One Jersey trust company that also considers the Chinese market too large to be overlooked is First Names Group, one of the world's largest independent players, with over 700 employees globally. Two hundred of them are in Jersey, where the office has experience dealing with Chinese clients, both corporate and private.

"As Chinese outward investment continues apace the need for such businesses to establish corporate structures to facilitate these investments will only increase. First Names Group has also seen increasing appetite amongst Chinese investors to use Jersey limited partnership structures when investing in non-Chinese assets with an overseas investment partner," says Kevin O'Connell, group commercial director at First Names Group.

O'Connell adds, "On the private wealth side, Chinese entrepreneurs who continue to amass wealth will need structures to allow for the devolution of their assets to the next generation. Jersey is a key jurisdiction for many real estate structures investing into the UK and Europe."

Bedell Trust is also keen on expanding its presence in China.

Victor Ho, head of Asia-Pacific business, says: "The firm has been providing trust services to Chinese clients in Hong Kong dating to the early 1990s. But since the abolishment of Estate Duty in early 2006, the demand for trust services had significantly reduced until the wealth emerged from China in the last five to 10 years."

According to Ho, Bedell has assisted Chinese clients with services such as pre-immigration wealth planning, wealth preservation and succession plans.

wangmingjie@mail.chinadailyuk.com

(China Daily European Weekly 07/17/2015 page23)