Government of Ghana’s decision to invest proceeds of its mineral royalties in the tax haven of Jersey has attracted significant public attention and become a matter of controversy. As the debate rages, I decided to examine the rising reputation of Jersey as a suitable destination for Investors without touching on other aspects of the Agyapa/Government of Ghana transaction.

The Island of  Jersey, which is located in the English Channel between the UK and France, is a world-leading international financial center offering a tax neutral, efficient and stable environment to manage capital inflows and outflows between the UK, Europe and the rest of the world and has a range of structures tailored to different investor needs.

Institutional investors which includes pension funds, endowment funds and sovereign wealth funds have often chosen the small UK Island to house their assets over the past years according to reports

According to Europe Economics, a leading International research consultancy, in 2017 alone the UK crown dependency managed assets that grew by well over 17 percent in the year to June as pension funds and sovereign wealth funds were attracted by the tax benefits.

Uk Island of Jersey

The report suggests that at the end of June 2016, assets grew from 209 billion pounds to 246 billion pounds a year later which excludes some 600 billion pounds held in special purpose vehicles for businesses and institutions. The same year, Jersey was spotlighted in the Paradise papers, which reports on leaked documents that exposed the offshore investment habits of international firms, funds and wealthy people.

According to the report most of the funds invested offshore by institutional investors and some individuals globally were found to be far larger that imagined. For instance, a report on offshore mega trusts found that a single hedge fund manager had hoarded 7.25 billion dollars in a Bermuda trust. The report also named other offshore jurisdictions that attract investors including British Virgin Islands, Guernesey and the Isle of Man.

The report mentions further that investors prefer the Island because of its zero-tax rate, its “range of fund structures,” and its ability to tailor “simple investment holding vehicles through to complex multi-jurisdictional structures.”. It also notes that pension fund assets account for around £39 billion of the £246 billion of assets under administration, with sovereign wealth funds accounting for around £14 billion. Around 60 percent of tax-exempt institutional investor cash was invested in private equity or venture

Island of Jersey

Billionaire Investor George Soros uses Appleby to administer a network of offshore companies like Nike, Apple, Facebook, Walmart, Allianz, Siemens, McDonald’s and Yahoo in places like the British Virgin Islands and Bermuda. Ebay founder Pierre Omidyar, is likewise the director of a company on the Cayman Islands that serves as an investment vehicle for his foundation but is believed to report his investments to the tax authorities

Although such transactions are not illegal such as in the case of Ghana which intends to invest portions of its sovereign wealth, critics say just because something is legal does not make it legitimate or uncontroversial. The popular opinion is that most nations lose out on billions each year through legal avoidance of tax and many have said it is a matter of public interest. These funds they claim could be used for hospitals, roads and schools. In 2016, the then US President Barack Obama said, “The problem is that a lot of this stuff is legal, not illegal”.

The trend has been likened to multinational corporations using their subsidiaries in tax havens to reduce the amount of profits they have to report. Same way private persons who set up an offshore company, report it to the authorities and tax its profits do not usually run into problems from the perspective of tax law.

In her article titled “An emerging trend: Jersey Private Funds and venture capital”, Lauren Salked, states that In the five-year period between 2013 to 2018, Jersey’s funds business grew 66 per cent, and demonstrates the confidence and long-term appeal that managers find with regulatory standards, expertise and international market access it provides.

The Executive Director of alternative markets with 12 years’ experience in private equity and venture capital markets provides further statistics to back her assertions. According to her, the Jersey Private Funds (JPF) which was set up in April 2017 to give institutional and professional investors a more streamlined funds regime, had increasingly grown in popularity by August 2019, because fund promoters and managers wanted a more flexible solution for structuring private funds. By June 30,2019, the fund had registered 257 venture capital and start-up promotors with assets under management of £43 billion.

Another concern also is the issue of secrecy associated with tax havens. The JPF for instance is so flexible to the extent that approval process can be fast tracked within 48hours,no obligation to appoint an auditor, no requirement for directors and shareholders to submit personal questionnaires to the JFSC and  no requirement for an offering document. It is that simple.

In conclusion, it is clear from the report that investors are comfortable with Jersey because aside not paying taxes, they have a variety of assets to invest in such as private equity or real estate to improve the diversity of their portfolio executed through a special purpose vehicle so that they can reduce risks and over the long term achieve higher returns.


So, in terms of legality there is nothing wrong. What remains is a moral question of whether sovereign funds should be invested in tax havens which is not very strange considering this will not be the first time a state entity is investing in a tax haven. However, most especially in Africa it is legitimate to ask because of uncertainties and the general mistrust for governments and authority.

Gabriel Zucman’s The Hidden Wealth of Nations: The Scourge of Tax Havens  article called for the closure of tax havens when he described it as “an illusion “of indebtedness in national economies. According to him, they produce economic inequality by allowing a citizen’s taxable income and wealth to circumvent a country’s redistributive systems or help pay for various state services.

In my view if these state funds will be used for the purpose for which they have been invested then ‘voila’.