How the Channel Islands are proving an attractive place for individuals and businesses looking to set up in a new location
We’ve all seen the property series on TV, where the presenter asks those featured why they want to relocate. The same themes usually emerge – a better commute, a more attractive, safer area to live. Essentially a better quality of life.
Technology and the internet have certainly introduced a greater flexibility around how and where we work and live. It’s no longer a necessity to be based in a major city to fulfil career potential. Remote and home working has taken off and so too has business relocation, with companies considering the wisdom and expense of having an office in London or Paris. And even if they do want to keep a big city presence, do businesses really need to base most of their staff there?
The Channel Islands have long been an attractive option to both businesses and high-net-worth individuals looking to relocate. A short flight away from the UK and a more agreeable tax regime are just two of the obvious advantages – but there’s far more to the story than that.
As Jo Stoddart, Managing Director at Quintessential Relocation Consultants, explains, the islands offer businesses a great deal. “Entrepreneurs who relocate really like the islands and the openness they experience,” she says. “And it’s easier to access the decision makers. If there’s a problem, it’s a lot easier to sort out if the people in authority are approachable and easily accessed.”
Stoddart agrees that flat rate income tax in the islands is a factor, but stresses that inheritance tax – or rather the lack of it – is an equally big draw. “A lot of individuals have bust a gut to get where they are financially, and they don’t like the idea of their family being hit by a hefty IHT bill.”
Kevin Lemasney, Director of High Value Residency at Locate Jersey, echoes Stoddart’s point about the tax angle, but argues that plenty of other islands or countries offer similar benefits. What gives the Channel Islands an edge, he insists, is their proximity to the UK, security, excellent schools and a good lifestyle.
“My role is to bring high-net-worth individuals to Jersey,” he explains. “What most of my clients really like is the fact that the island is English-speaking, the currency is sterling and they’re a short flight from the UK.”
These factors are highly significant when you consider where the majority of those looking to relocate are coming from. “Predominantly, our clients are from the UK,” Lemasney explains.
“In fact, 85 per cent of our clients have British passports. They may be looking to expand their business or are just seeking a better lifestyle. Jersey may not be the cheapest place to live, but it ticks most of the boxes for our clients. It’s similar to the UK, but different too.”
Domain of the ultra-rich?
So, are those moving to the islands largely high-net-worth individuals or are those of more modest means relocating too? “It’s a real mixture,” Stoddart reveals. “There’s interest from the wealthy, but also from lawyers, bankers, accountants, entrepreneurs, teachers, vets and marketing specialists – not just those at the top end.”
She adds that those in the legal and financial services sector appreciate the benefits of at least spending a few years in the Channel Islands. “Offshore experience always looks good on the CV and can provide a career boost.”
As for the balance between individuals and businesses moving to the island, Lemasney argues that there’s a degree of crossover, with some individual clients establishing themselves on the islands and then setting up and growing a business.
“We’re seeing architect firms, fund management companies, retailers and digital businesses coming to the island, and quite often the people behind these companies are the high-net-worth arrivals.”
The rise in the number of entrepreneurs establishing a foothold in the islands is a growing (and positive) trend. Lemasney highlights another recent change. “The age profile of those coming to Jersey is changing. In the past four years, 74 per cent of high-net-worth people coming to Jersey haven’t yet celebrated their 60th birthday. In the past, those coming to the island would have been older.”
Indeed, the perception of the Channel Islands as primarily a place for the wealthy to retire is beginning to change. As Stoddart points out, the demographics have shifted significantly. “We’re seeing people in their 30s and 40s wanting to work here and bring up their family on the islands. There are good schools and the quality of life is a big factor.”
While there’s a range of businesses coming to the island, there are a few discernible patterns. The big attraction currently is for nimble, high-growth, technology-related businesses that are more to do with intellectual capital than an end-product off a production line.
“We’ve seen plenty of online gambling companies looking at the islands,” Stoddart reveals. “Insurance companies, particularly in Guernsey, have successfully located here. For the insurance industry, there’s a good pool of talent already here and it’s also a good place to do business.”
And when it comes to encouraging business to relocate, an accommodating government is often a plus. As Andrew Carey, Head of Locate Guernsey, explains, businesses find most of what they want on the islands and if there are some elements to their operation that they can’t immediately source, then government does what it can to assist.
“The Locate Guernsey role is that of a friendly guide. This takes various forms – answering questions, providing guidance, making introductions; all with a view to enabling a soft landing for the newcomer. And lately, we’ve been able to let certain businesses know about the Guernsey Investment Fund, and the mechanism by which that could lead to government investing in specific businesses.”
The Guernsey Investment Fund was established in February 2018 with the intention of investing in projects and businesses that have a Guernsey focus.
Being accommodating and providing business incentives is all very well, but how easy is it to relocate given that the Channel Islands operate population policies? Is inward migration restricted in any way? “Yes, it is restricted somewhat,” is Jo Stoddart’s considered response. “Because the islands are small, we need to restrict who comes in.”
Managing the population
Kevin Lemasney says the current population of Jersey is 104,000 and the number is currently growing at 1,000 a year, which he says is manageable. And the reason it’s manageable is because an increasingly larger proportion of those relocating are younger people who bring in new skills and employment opportunities.
Simon Torode, Founder and CEO of Livingroom Estate Agents, explains that each island has individual policies to restrict inward migration, based on knowledge of how best to protect each jurisdiction.
He stresses, however, that though the islands may appear topographically similar, they conduct business in very differently ways. These differences are clearly evident in the property markets – not just house prices, but in who actually qualifies to buy and settle as a resident. “I’d say it’s especially easy to relocate to Guernsey if the relevant criteria can be met,” Torode states.
For those not in the high-net-worth bracket, Guernsey isn’t prohibitively expensive. The value of Open Market properties has reduced, allowing a greater choice under £1 million – five years ago this simply didn’t exist.
As Torode explains, when you compare the cost of purchasing in Guernsey against London, and the enormous growth there within the last five years, Guernsey property shows relative value.
It’s a different story in Jersey, as Stoddart reveals. “You can move to Guernsey and find a house for £600,000 or £700,000. In Jersey, you need a housing licence and a minimum annual income of £725,000 before you’re eligible.”
Whether individuals have the wealth to satisfy property rules or have permits to work here (and subsequently rent), those who relocate provide real economic value to the islands. As Torode explains: “The Open Market community in Guernsey alone contributes over £70 million in net tax to the public purse – not including other areas of employment, investment and so on, which have been estimated at over £400 million.”
So yes, while there may be hoops to jump through, the Channel Islands offer a tempting proposition for those looking to relocate. And in doing so, the ‘new blood’ helps to ensure the islands remain inspiring places to live and work. It’s a virtuous circle.
Case study: How Daub Alderney made the move
Daub is one of the largest online gaming operators in the UK, with more than a 25 per cent share of the UK online bingo market. Part of the Stride Gaming Group, the company has offices in London, Manchester, Mauritius, Israel, South Africa, and, more recently, in St Peter Port, Guernsey.
Zak Cronje, CEO of Daub Alderney (pictured), says establishing an operation in Guernsey has been a marked success. The firm has doubled in size in the past two years and plans to do so again in the next 12 months.
Cronje explains that Guernsey was selected as a location because of a number of factors. “Our gaming licence was provided by the Alderney Gambling Commission, which is one of the most respected regulators for operators in the UK and other markets. And there were a number of gaming operators already established within the island, which provided a good basis for building a team.”
But what about recruitment? Not a problem, according to Cronje. “There’s a saying that you hire for attitude and train for skills,” he says. “While the gaming sector has been in Guernsey for a number of years, it’s still relatively new and, as such, it’s a challenge finding people with specific sector experience.
“Our strategy is to grow our own experts from the local community. We have moved people to our Guernsey offices who possess a wealth of gaming experience, and they play a vital role in nurturing local talent.”