Escrow: Supporting Secure, Flexible and Trusted Transactions

The word ‘escrow’ comes from the Old French word ‘escroue’ which means a scrap of paper or a scroll of parchment.

It is this document that was held by a third party until a transaction was completed, with the earliest forms of escrow being traced back to medieval Europe for real estate transactions.

It may seem like such an antiquated procedure holds no place in contemporary times, as we all look to understand how technology and artificial intelligence can change our lives.

However, the risks inherent in the modern, fast-moving global corporate finance environment and shifting client requirements mean that using an independent, expert escrow agent is increasingly attractive. Doing so can play a pivotal role in securing assets and funds when it comes to undertaking and completing complex cross-border transactions.

With international finance centres playing a key role in supporting corporate activity focused on global markets, the benefits of an escrow agent to provide much needed security, flexibility and trust on all sides of a transaction can be significant.

Escrow is by no means a new service but is being used to meet the increasingly complex needs of companies and investment funds undertaking transactions in a sophisticated corporate environment through multiple jurisdictions.

As an example, JTC has recently acquired its PSD2 licence from the Dutch Central Bank allowing it to provide a comprehensive escrow service that can be passported right across the European market to support both investment funds, public and private companies, in addition to existing escrow solutions provided by the Jersey team.

Benefits

The features of an escrow service can be multifaceted, but typically include the independent holding of funds and there are a number of benefits of using an independent, neutral escrow agent in this way, to support corporate transactions.

As well as helping companies mitigate financial risk, particularly when a transaction may involve parties in different jurisdictions, an escrow service can provide a greater level of speed, flexibility and security when handling funds.

Through its escrow service, JTC has sought to bring together its own Group-wide expertise, including its team’s deep experience in complex cross-jurisdictional transactional arrangements and rapid onboarding capabilities through its streamlined tech-enabled KYC processes.

JTC works in conjunction with a network of major banks, matching the right banking partner and account structure to the specific requirements of each escrow transaction, ensuring security, flexibility, and efficiency.

It’s a solution that is backed up by full regulatory oversight, as well as JTC’s own status as a London Stock Exchange listed company and a constituent of the FTSE 250 index, ensuring reliability and delivering peace of mind to all parties.

Escrow solutions can add value in a range of scenarios, including:

• Mergers and Acquisitions: holding purchase price funds securely ahead of any conditions being met
• Capital Markets: managing (SPAC) IPO proceeds, debt repayments or contingency funds for bond issues, securitisations, or structured finance transactions
• Real Estate Transactions: providing independent custody for deposits or purchase price funds in commercial real estate deals and development financing
• Litigation and Settlement: holding funds to cover settlements, damages, or judgment amounts in litigation, arbitration, or dispute resolution cases
• Asset Sales and Supply Agreements: securing payments for staged deliveries, milestone-driven transactions, or releasing intellectual property rights and other intangible assets
• Private Wealth: safeguarding family office or trust assets during restructuring, philanthropic disbursements, or major purchases
• Construction Projects: holding retention money or milestone payments to protect all parties in development and building contracts

With the international corporate finance landscape becoming increasingly complex but with investors and companies continuing to seek global opportunities, the expectation is that escrow services will become an increasingly important component within the corporate finance mix.

JTC is well positioned to support that trend through the escrow service offerings, enabling clients to plan better and ensuring that multi-stakeholder transactions can be completed efficiently, securely and seamlessly.

It may have been established in a time that we can barely envisage as driverless cars navigate cities and satellite networks provide global internet access, but sometimes, the old ones really are the best.

To learn more about JTC’s escrow services visit our dedicated webpage.

This article first appeared in the July 2025 issue of Business Brief, the Channel Islands’ leading business magazine. Access the full issue here.