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.
Note: Ancillary services
In addition to providing incorporation, domicilary 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.
Trusts and Trustee Services
Trusts have many applications and advantages, including the protection and preserving of assets, tax planning or just avoiding the expense and delays of obtaining probate under a will. They also provide a high degree of confidentiality. Trust legislation in the Isle of Man is generally based on UK trust law and the Isle of Man recognises and gives full effect to the concept of the trust. Using a trust to own the shares of an offshore company can result in very substantial tax and non-tax related advantages that will accrue both on death and during the lifetime of the trust settlor.
A trust can be set up in many jurisdictions but very few can satisfy the following important criteria:
- Strong tradition of enforcing trusts;
- English common law system;
- Established reputation for trust business;
- Modern legislation that embraces the newer concepts of trusts;
- Imposes low or no tax on the trust.
The Isle of Man is a perfect jurisdiction in which to establish a trust and Sovereign Trust (Isle of Man) Limited is fully licensed to act as professional trustees. Fees for drafting the trust deed and for the provision of trustee services will be quoted on a case-by-case basis