In recent months, a burgeoning trend has been spotted wherein substantial UK-based companies are venturing towards listings on US stock exchanges, such as the New York Stock Exchange (NYSE) and Nasdaq. This development, seemingly at the expense of the London Stock Exchange (LSE), potentially adds a new dimension to international capital markets.
One of the companies spearheading this shift is ARM, a leading technology firm, which recently divulged its intention to delve into listing in New York after enduring extensive lobbying by the UK government and other pivotal industry stakeholders to pursue a UK listing or a double US-UK listing. The details of this breakthrough can be found in an article posted on JD Supra by the author Walkers.
In the narrative of these unfolding events, an underappreciated player is said to be the Jersey company. These companies, with their distinctive corporate, tax, and legal structure, may offer certain advantages to firms seeking a listing in the US.
- Jersey companies are not considered “foreign issuers” under US Securities laws, saving them from cumbersome reporting obligations that could potentially reduce their investor appeal.
- The tax structure in Jersey is quite favorable for multinational corporations, with zero corporate tax for Jersey-resident companies.
- Unlike other jurisdictions, Jersey law has a close affinity with UK law, which contributes to an easier transition for UK companies seeking to list in the US.
The aforesaid advantages, among others, make a compelling case for international companies, especially those from the UK, to consider forming a Jersey entity as part of their US listing strategy. As always, all companies should seek specialist advice to understand the potential benefits and implications more comprehensively.
The direct implications of this trend are likely to precipitate a host of changes, yet remain clouded in uncertainty as the saga unfolds.