Launched in Jersey on 1 January 2019, the international savings plan (ISP) is a new way for employers to establish a savings plan product in a highly reputable and very well-regulated jurisdiction.

 

Companies are always looking for the most innovative ways to help recruit, incentivise and retain their employees, both locally and across the globe. Launched in Jersey on 1 January 2019, the international savings plan (ISP) is a new way for employers to establish a savings plan product in a highly reputable and very well-regulated jurisdiction.

What is an ISP?

An ISP is a savings plan which has flexible rules as to when benefits can be paid out. This makes it ideal for employees and executives working for companies where traditional pension schemes might not be available.

An ISP is suitable for companies of all sizes, from the very small to multijurisdictional businesses with a global work force.

An ISP is funded by the employer making regular contributions to the ISP and we suggest this be part of the monthly payroll. However the funding can be individually tailored to suit specific circumstances

Contributions can then be invested into a pre-agreed investment strategy which would aim to provide tax free growth.

Key features and benefits of an ISP

The key features include:

  • It provides benefits in respect of a person’s employment, wholly outside Jersey
  • Established under an irrevocable trust under Jersey law by an employer who is not resident in Jersey
  • It has trustees (either two or more individuals or a corporate) who are regulated by the Jersey Financial Services Commission
  • While an ISP is not a scheme which comes within the pension’s framework under Jersey tax legislation, it is still officially disclosed to the Jersey tax office and its status is acknowledged by the Jersey tax office

 The key benefits to both employer and employee are:

  • Any income or capital gains made within an ISP are free of any tax in Jersey
  • Payouts to ISP members are free of any withholding taxes in Jersey
  •  Payouts are very flexible and can be dependent on members’ personal circumstances (e.g. redundancy, ill health or other criteria).
  • Payouts can be made potentially at any age
  • A range of investment alternatives can be provided including investments which are Shariah-compliant
  • Ability to tailor each ISP to meet employer and employee requirements

By holding the plan off the company’s balance sheet, it provides the employer and employee with comfort that benefits will be secured as they will be isolated from any credit risk of the employer and will be controlled by an independent party.

Is this a suitable product for all businesses, regardless of location?

Yes. An ISP is attractive to businesses wherever they happen to be located and also to businesses across all industry sectors. There is a consensus that an ISP is of particular interest to businesses based in the Gulf Cooperation Council (GCC) states. It is a legal requirement for companies within the GCC to provide end of service gratuity benefits to employees following a certain period of service, and an ISP is an ideal solution to this legal requirement.

Why Jersey?

Jersey has been a leading international finance centre for more than 50 years and is highly regarded in the incentives industry due to its strong regulatory framework, independence, tax neutrality and experienced workforce. Jersey offers a vast range of employee-focused solutions including share plans, employee benefit trusts and pension plans. The introduction of the ISP is the latest example of Jersey’s forward-thinking approach.

How we can help

We have over 35 years of knowledge and experience in the provision of employee benefits solutions. We apply our trustee, administration, record-keeping and reporting capabilities to create and administer the right solutions for our clients.

If you would like to find out more please get in touch.

Our solutions

Corporate

Our team partners with businesses of all sizes and across all stages of the corporate lifecycle, from entrepreneurs just starting out to blue chip and other major international corporations, across a variety of sectors and jurisdictions. We work seamlessly with you and your team of professional advisers to provide a diverse range of solutions.

Our Corporate solutions include:

  • Real estate
  • Debt capital markets
  • Employee incentives
  • Tailor-made solutions
  • TISE listing member services
  • Corporate administration
    • Entity establishment
    • Company secretarial
    • Accounting and reporting

News

26 October 2020

Steve Langan appointed to lead VG’s corporate and capital markets business

Steve has a proven track record of delivering exceptional outcomes across global markets and a deep understanding of capital markets; he will lead a team in Jersey administering a diverse portfolio of employee benefits, corporate and private wealth structures,...

News

22 March 2022

VG strengthens corporate team with three new hires

Building on a host of appointments to date in 2022, we have further strengthened our corporate and capital markets team with the appointments of Gabriela Jakubczyk as Associate Director and Matthew Hibbs as Manager.