|Type of Company|
|Common or Civil Law|
|Disclosure of Beneficial Owner|
|Migration of Domicile Permitted|
|Tax on Offshore Profits|
|Language of Name|
|Minimum Number of Shareholders / Members|
|Minimum Number of Directors / Managers|
|Bearer Shares Allowed|
|Corporate Directors / Managers Permitted|
|Company Secretary Required|
|Standard Authorised Capital|
|Government Register of Directors / Managers|
|Government Register of Shareholders / Members|
|RECURRING GOVERNMENT COSTS|
|Minimum Annual Tax/Licence Fee|
|Annual Return Filing Fee|
The Isle of Man is located in the Irish Sea equidistant from England, Scotland and Ireland, and has a total land mass of approximately 580 sq. km
The population of the Isle of Man is approximately 70,000 resulting in a population density of roughly 120 people per sq. km. A third of the population live in Douglas; the Island’s Capital, and its suburbs.
The Isle of Man is a British crown dependency. It has its own Parliament (Tynwald) which legislates on all domestic matters including taxation. Tynwald consists of two houses; the Legislative Council, which consists of eight Members, elected by the lower house, The House of Keys, and the Bishop and Attorney General, neither of whom has voting rights. The House of Keys has twenty-four Members who are elected and serve a five-year term. HM Queen Elizabeth II holds the title Lord of Man, and is ultimately responsible for the government of the Island, and all legislation passed by Tynwald has to have Royal Assent before being enacted.
INFRASTRUCTURE AND ECONOMY
The Isle of Man is served by Ronaldsway Airport in the South of the Island, some eight miles from Douglas. There are regular services on at least a daily basis to London, Manchester, Birmingham, Cardiff, Dublin, Belfast, Blackpool, Liverpool and Glasgow, and services on a less frequent basis to other cities in the United Kingdom and the Channel Islands. There are no direct international links.
The Island has some 800 km of road, mostly maintained to a high standard and main roads connect all the major centres of population. Rail services are seasonal and largely provided for tourist purposes.
The Isle of Man, confronted with a decline in its two principal sources of income, agriculture and tourism, now places greater reliance upon industrial investment and its financial centre activities.
The official and spoken language is English. However, owing to the Celtic origins of the Island it also has its own Gaelic language that is spoken by enthusiasts.
The Manx Pound which is on par with the UK Pound. The Island issues its own notes and currency, which are interchangeable with UK currency on the Island.
TYPE OF LAW
Common Law, based on English Common Law.
PRINCIPAL CORPORATE LEGISLATION
|•||The Companies Acts 1931 to 1993|
|•||The International Business Act 1994|
|•||Limited Liability Companies Act 1996|
TYPE OF COMPANY FOR INTERNATIONAL TRADE AND INVESTMENT
Two types of company are generally used for trade and investment: the Exempt Company and the Limited Liability Company.
The Exempt Company, by law, must have at least one Isle of Man resident director and must appoint an Isle of Man resident company secretary who must be a natural person and hold a professional qualification. The Exempt Company is normally used for personal or corporate investment holding and for trading activities with European Union countries.
The Limited Liability Company legislation is based on US LLC legislation. Manx LLCs must have two members and appoint a local registered agent.
PROCEDURE TO INCORPORATE
Exempt: Submission of Memorandum and Articles of Association, together with “Form I” nominating the first directors and secretary, and advise of the situation of the Registered Office and the form giving name approval. Immediately after incorporation the company must select Exempt status.
LLC: Filing of Articles of Organisation with the Registry.
RESTRICTIONS ON TRADING
Cannot trade within the Isle of Man. Cannot undertake banking or insurance activities. Cannot undertake investment business other than the investment of the company’s own assets. Cannot solicit funds from the public nor offer its shares to the public.
POWERS OF COMPANY
An Isle of Man company has all the powers of a natural person.
LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS
REGISTERED OFFICE REQUIRED
Manx Exempt Companies must maintain a registered office in the Isle of Man.
SHELF COMPANIES AVAILABLE
TIME SCALE TO INCORPORATE
One day, subject to name approval.
Exempt and LLC: A name that is similar to or identical to an existing company. A name that is known to exist elsewhere. A name that implies illegal activities. A name that implies royal or government patronage.
Exempt Companies: Many names require justification or high capitalisation to allow use. Words such as “International”, “European” or other words indicating an international presence will only be approved if the Company is incorporated with an authorised capital of
£ 100,000, which must be paid up.
Use of the words “Trust”, “Trustees” or “Fiduciary” will only be approved if the company is incorporated with an authorised capital of
£ 250,000, which must be paid up.
Use of the word “Holdings” will only be approved if the Company can provide documentary evidence that it holds 51% or more of an underlying company.
Use of the word “Group” will only be approved if the company can provide documentary evidence that the company owns a group of companies.
LANGUAGE OF NAME
Names can be expressed in any language using the Latin alphabet, if the Registrar of Companies is in receipt of an English translation and the name is not considered undesirable.
NAMES REQUIRING CONSENT OR A LICENCE
The following names or their derivatives: bank, building society, savings, loans, insurance, assurance, reinsurance, co-operative, council, Chamber of Commerce, trust, municipal and finance or their foreign-language equivalents.
SUFFIXES TO DENOTE LIMITED LIABILITY
Exempt companies must utilise Limited or Ltd as a suffix whilst LLCs must utilise Limited Liability Company or LLC.
DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES
AUTHORISED AND ISSUED SHARE CAPITAL
Exempt companies have a normal authorised share capital is £ 2,000 or its currency equivalent, this being the maximum for the minimum capital duty payable upon incorporation. The minimum issued capital is one share of par value.
CLASSES OF SHARES PERMITTED
Exempt companies may have registered shares, bearer, preference shares, redeemable shares and shares with or without voting rights.
BEARER SHARES PERMITTED
Exempt companies may have bearer shares, but they cannot be allotted directly to bearer. They have to be allotted in registered form, and then transferred. It is a requirement of Isle of Man legislation that the Register of Members must state the name and residential address of the holder of bearer warrants.
Exempt and International LLC’s pay no income tax, but pay a fixed annual fee to the Government.
DOUBLE TAXATION AGREEMENTS
Apart from a limited treaty with the United Kingdom, the Isle of Man is not party to any double tax treaties.
An Isle of Man Exempt Company pays £ 400 per year, which is due on 6th April.
An Isle of Man international LLC pays £ 400 a year which must be paid over within 30 days of applying for International LLC status and thereafter annually.
FINANCIAL STATEMENT REQUIREMENTS
Whilst there is no requirement to file audited accounts with the authorities, it is important to note that a company is required to keep financial records which reflect the financial position of a company. The Assessor of Income Tax reserves the right to call in the accounts.
Exempt: The minimum number of directors is two. Exempt companies are required to appoint at least one resident director. Bodies corporate may not be appointed as directors.
LLC: One manager either a natural person or a body corporate of any nationality.
A company secretary is required for all Isle of Man companies. They may be natural persons or bodies corporate.
The company secretary of an Exempt Company must be a natural person, resident in the Isle of Man and must hold a professional qualification.
Exempt: The minimum number of shareholders is one.
LLC: The minimum number of members is two.
OTHER TAX PLANNING ENTITIES
Other Isle of Man entities used for international tax planning include: