Head of Corporate & Administration
T: +357 25258925
Isle of Man
The Isle of Man is an English speaking country which lies in the Irish Sea between Britain and Ireland. It occupies an area of 588 sq. km (277 sq. miles). Constitutionally it has never been part of the United Kingdom, but is rather a self-governing territory within the Commonwealth with a population of about 85,000 persons.
Tynwald, the Isle of Man parliament, is responsible for the Island’s domestic affairs including taxation. Britain is responsible for the Island’s defence and foreign affairs. The Island has a special relationship with the European Community: whilst it is associated with the EC the Island is excluded from the Community’s fiscal harmonisation policy. The Isle of Man is a part of the UK VAT area and does impose VAT on goods and services. As such, an Isle of Man company may be registered for VAT and may therefore prove a suitable vehicle for international trade with other member states of the European Union.
The Isle of Man law is closely based on English common law and the decisions of the courts in England are regarded as being persuasive in the Manx courts.
The New Manx Vehicle
The Isle of Man Companies Act 2006 introduced a new simplified corporate vehicle into Manx Law and provides a streamlined process for setting up and running a company in the Island to complement the zero rate company tax strategy introduced that same year.
The New Manx Vehicle (NMV) is based on the concept of the international business company (IBC) model and is fully in line with recognised benchmarks. It is introduced and will sit alongside existing Isle of Man Companies Acts and companies formed under those previous Acts (now called 1931 Act companies) will continue to be registered under those laws but are permitted to convert to 2006 Act companies if preferred in the future.
Companies under either Act can be registered as either companies limited by shares, limited by guarantee, limited by shares and by guarantee (hybrid) or unlimited (with or without shares).
Key elements of the new Act include:
Greater flexibility of use;
Simplified reporting requirements;
Use of regulated corporate directors and only one Director now required;
No requirement for authorised capital and no capital maintenance requirements;
Use of registered agents in place of company secretary (a role which must be performed by licensed corporate service providers);
Unlimited corporate capacity, but restricted objects permissible;
No preclusion of financial assistance;
Pre-incorporation contracts can be adopted;
Simple merger and consolidation procedures;
Introduction of protected cell companies for general business use; and
Simplified corporate redomiciliation from other jurisdictions
The Act has been designed for a range of corporate transactions and is likely to be particularly useful for public offerings, securitisations, asset and project finance.
Annual Reporting - An annual return must be filed showing details of the directors. There is no requirement to file accounts with the registrar, but please note that all companies do need to produce accounts for the tax authorities and to verify on their annual return that accounts have indeed been prepared up to a specified date. Accounting records and registers must be retained at the office of the Registered Agent where they may be inspected by any member or director, the Isle of Man Financial Services Authority or the Attorney-General’s office.
Timeframe - Companies can be incorporated within 5-7 days but ready made companies are available for immediate purchase.
Restriction on Name and Activity - Limited company names must end with one of the following words or abbreviations thereof:- Limited, Corporation, Incorporated or Public Limited Company. Unlimited company names may end with the word Unlimited or an abbreviation thereof. The following words cannot be used without further approval; bank, assurance, casualty, guarantee, indemnity, insurance, re-insurance, surety, underwriting, bank, trust, trustee, holdings, international, group, global, worldwide, european, finance, securities, etc.
Local Requirements - As a matter of local company law the company must maintain a registered office address within the IOM and must also appoint an IOM licensed Trust and Corporate Service Provider as registered agent. We would generally provide these services as part of the annual fees.
Contact us for our schedule of fees.
Diclaimer: The above is intented to provide a brief guide only. It is essential that appropriate professional advice is obtained. XpertAdvice will be glad to assist you in this respect. Please do not hesitate to contact us.