Isle of Man

The isle is located in the heart of the Irish Sea and approximately midway between the UK and Ireland. Isle of Man is not part of the UK or the European Union. It is the UK Crown Dependencies. Isle of Man is included in the "White List» OECD in 2009.

Capital

Douglas

Official language

English, Manx

Government

The parliamentary constitutional democracy. The head of state is Lord of Maine. As of 2008 the title of Lord of Man belongs to the Queen of Great Britain Elizabeth II. The representative of Lord is Lieutenant-Governor, who is appointed for five years. The parliament of the island called Tynvald and it exists since 979. The highest court of the island is represented by two top judges.

Legal system

The Isle of Man operates its own legal system. It is very similar to the British, but at the same time differs from it. The legal system belongs to the Anglo-Saxon legal family, i.e. is precedent.

Currency

Manx Pound (IMP), equated to the British pound (GBP).

Economy

The economy is stable. The unemployment rate is low, and inflation is lower than the EU average. Key sectors of the economy are financial and professional services. Banking activity brings about a quarter of GDP. Favorable tax treatment contributed much to the economic growth.

Corporate law

  • The Companies Act (Amendment) 2009
  • Corporate Service Providers Act 2000 
  • International Business Act 1994
  • Limited Liability company Act 1996
  • Trusts Act 1995
  • Purpose Trusts Act 1996

Types of companies

  • International Company (New Manx Vehicle, NMV)
  • Private Company Limited by Shares
  • Company Limited by Guarantee
  • Exempt Private Company
  • Public Company Limited by Shares
  • Limited Liability Company
  • Branch of Overseas Company
  • Non-Resident Company
  • General Partnership
  • Limited Partnership
  • International Limited Partnership
  • Sole Proprietorship
  • Trust

International Company (New Manx Vehicle)

  • Under the new legislation, a company that issues shares, need not have an authorized capital. Pre-existing claim for payment of the authorized capital is replaced by the requirement to successfully pass the test of its financial viability.
  • IBC can not trade within the Isle of Man, be engaged in banking and insurance activities.
  • Companies can issue all kinds of shares except for bearer shares.
  • A minimum of one director, person or entity is required. Under the new legislation, there are no requirements on the appointment of the Secretary.
  • Since 2010 private companies have the right not to hold annual meetings of shareholders, that may be unnecessary, for example, for small companies. However, if the shareholders decide to hold an annual meeting, it can be held anywhere: on the Isle of Man or elsewhere.
  • An annual report which must include profit and loss account, balance sheet, audit report is to be filed with the Register.
  • Disclosure of beneficiaries is done at the discretion of the company.

Taxation of companies

As a general rule there is no capital gains tax, turnover tax and stamp duties on the Isle of Man. Tax on income is 0%, no tax on dividends to shareholders. Partnerships and limited liability companies are taxed only if they obtained income from sources located on the Isle of Man. Trusts that have nonresident beneficiaries do not pay tax on income received from sources outside the island and the tax on interest paid by Manx banks. The fee for registration of the company since 2006 is 95 pounds, the annual fee for the existence is 360 pounds sterling.

Agreements on avoidance of double taxation

At the end of 2010 the Isle of Man has double taxation avoidance agreement with the United Kingdom and agreements on exchange of tax information with such countries such as Bahrain, Belgium, Estonia, Malta, and the agreement on avoidance of double taxation on individuals with the following countries: Denmark, Australia, Faeroe Islands, Finland, Greenland, Iceland, Ireland, New Zealand, Norway, Sweden.