Why the Isle of Man?

Why the Isle of Man?

  • 0% is the standard rate of corporation tax for all resident and non-resident Isle of Man companies.
  • There is no capital gains tax, inheritance tax and a top personal income rate of 22% applies for individuals, which is capped at £200,000.
  • No tax is levied on trusts with non-IoM resident settlors or beneficiaries.
  • The Isle of Man forms part of UK VAT area – a great advantage for commercial property structures.
  • The Isle of Man has a rapidly expanding network of Double Taxation Agreements (DTAs).
  • The Isle of Man is part of the UK banking system, which means inbound and outbound payments can be processed on the same day at nominal cost (BACS), avoiding international wiring fees.
  • UK time zone and postal services allow for next day delivery of mail to/from the UK.
  • Excellent infrastructure in terms of banking, legal and accounting services, with costs at competitive levels in comparison to other jurisdictions
Set up your company in Isle of Man

Setting up a Company in the Isle of Man

The Isle of Man Companies Act 2006 introduced a simplified corporate vehicle – the New Manx Vehicle (NMV) – and a streamlined process for setting up and managing companies designed to complement the zero rate company tax regime, which was introduced the same year.

The NMV is based on the international business company (IBC) model and was designed for a range of corporate transactions, including public offerings, securitisations, asset and project finance. The new 2006 Act sits alongside previous Isle of Man Companies Acts 1931 to 2004. Isle of Man companies can still be registered under the old legislation, now called 1931 Act companies. 1931 Act Companies are permitted to convert to the 2006 Act if preferred, or vice versa.

The following types of companies are available:

  • Limited by shares (public or private).
  • Limited by guarantee.
  • Limited by guarantee with a share capital (known as a ‘hybrid’ company).
  • Unlimited, with or without share capital.
  • Protected Cell Companies.

Clients who are not resident in the Isle of Man for tax purposes can utilise a tax-resident Isle of Man company for trading purposes, which will not be subject to Isle of Man tax on profits or on distributions (dividends).

Isle of Man company set-up is straightforward. The Isle of Man Companies Registry is fully automated, and companies can be incorporated within two to three days, or same day on payment of a surcharge. An annual return must be filed showing details of the directors.

The Beneficial Ownership Register includes the contact details of the natural person or persons who ultimately own or control any company, limited partnership or foundation established in the Isle of Man. It is currently only accessible by Isle of Man law enforcement and regulatory authorities.

A beneficial owner is someone who owns or controls more than 25% of a legal entity. Details must be submitted online, via Isle of Man Government Online Services, to the Isle of Man Database of Beneficial Ownership by a nominated officer or a corporate services provider.

There is no requirement for a business to file accounts with the Registrar, but all companies are required to produce accounts and complete a tax return. For compliance purposes, it must be verified on the annual return that accounts have been prepared up to a specified date. Accounting records and registers must be retained at the office of the Registered Agent.

Sovereign provides clients with ready-made or customised incorporation of all types of Isle of Man company. Once incorporated, a company will be required to maintain a minimum presence in its place of incorporation – a registered office and a resident company secretary and/or a resident agent. We generally provide these services for all our clients and describe them as ‘domiciliary services’.

Sovereign also provides Isle of Man-based directors for many of the companies that we incorporate. This is to ensure that their affairs can be properly managed and controlled from their place of incorporation. This service is often combined with our other company management and/or domiciliation services. Re-mailing services are further available at modest cost for all companies established by Sovereign.

Useful Links

Isle of Man Government – www.gov.im/

Isle of Man Financial Services Authority – https://www.iomfsa.im/about/about-us/

Isle of Man Financial Services Sector – www.whereyoucan.com/finance

Isle of Man Aircraft Registry – www.gov.im/ded/Aircraft/

Get in Touch

Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.