Why the Isle of Man?
Why the Isle of Man?
- 0% corporation tax for Isle of Man companies
- No capital gains tax, inheritance tax and a top rate of 20% for individuals
- No tax levied on trusts with non-IOM resident settlors or beneficiaries
- Forms part of UK VAT area – a great advantage with commercial property structures
- Rapidly expanding tax treaty network for the avoidance of double taxation
- Part of UK banking system so payments in/out can be processed 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 UK
- Excellent infrastructure in terms of banking, legal and accounting services with costs at competitive levels in comparison to other jurisdictions
Setting up an Isle of Man company
The Isle of Man Companies Act 2006 introduced a new, 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 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 Act sits alongside previous Isle of Man companies laws and the companies formed under them, now called 1931 Act companies, which continue to be registered under those laws but are permitted to convert to the 2006 Act if preferred.
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 – particularly within European Union because Isle of Man companies can be registered for VAT – with no Isle of Man tax on the profits or on distributions.
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 (but not shareholders on a 2006 Act company). There is no requirement to file accounts with the registrar, but all companies are required to produce accounts and complete a tax return and to verify on their annual returns 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 ready-made or customised incorporation of all types of Isle of Man companies. Once incorporated, we provide a domiciliary service including the provision of registered agent, registered office and nominee shareholder services if required. Full management services from our licensed corporate directors are also available and highly advisable in most cases. Re-mailing services are available at modest cost for all companies established by Sovereign.
Business Support Services
In addition to providing incorporation, domiciliary and management (directorship) services, a range of ancillary services at competitive prices is available on request. These services include, but are not limited to: provision of dedicated telephone lines for companies that are particularly active or wish to have a higher profile or more substance; office and personnel assistance; designated staff members (temporary or permanent availability); assistance with office relocation, introduction to real estate agents, government agencies and other third parties.
IOM companies which have a turnover of £81,000 per annum or more may have to register for VAT (VAT is a sales tax chargeable throughout the European Union) and must prepare and file quarterly VAT returns. Isle of Man entities are required to produce accounts and file tax returns in a timely fashion if fines and other penalties are to be avoided. Sovereign can act as the “Fiscal Agent” for your entity and complete and file the necessary returns, assisting with the preparation of the accounts, introducing the entity to and liaising with a suitable auditor and liaising with the tax department to ensure that the obligations of the entity are met in full.
Sovereign is able provide introductions to a number of banks in the Isle of Man and elsewhere in the world with which we have long-term relationships. Sovereign can also assist with account opening procedures.
Whilst there is no legal requirement for Isle of Man companies to have Isle of Man resident directors, it is a practical requirement and we generally do not set up companies on the Isle of Man if we are not engaged to act as directors. Companies need to be able to show they have economic substance provided on the Island so having local directors is a practical and administrative necessity.
The online gambling industry has grown tremendously alongside the worldwide web. The first casino is thought to have gone online in 1994 and By 1998 when the first online poker sites were launched, the global online gambling and betting market was estimated to be worth USD830 million per year. Fast forward Two decades later this market accounted for USD45.8 billion and is expected to double to over USD90 billion by 2024, which would represent a compound annual growth rate of 10.9% (Source: Zion Market Research).
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/