Isle of Man
Viable investment solutions to match international mobility
Viable investment solutions to match international mobility
The Isle of Man is a leading international business centre renowned for its innovation, professionalism and long-standing policy of positive engagement with international initiatives and standards.
The islands success as a major e-business activity centre is accredited to the excellent telecom & power infrastructure and millions of pounds of investments of public and private companies in this sector. The Isle of Man is in the same time zone as London and its financial markets.
The Isle of Man occupies a central position in the Irish Sea and the British Isles - right between England, Ireland, Scotland and Wales.
Fiscal Advantages
Regulatory Advantages
Limitations
The Companies Act 2006 has made the following companies available under the act:
An individual who conducts trade, profession on his own, is termed as Sole Trader or Practitioner. An assistant may be employed to run the business, although the liabilities that arise are wholly on the Sole trader.
The Partnership Act 1909 governs the Partnerships and states as the relationship which subsists between persons carrying on a business in common with a view to profit.
A Trust exists where the legal & equitable interests in property are separated. The normal perpetuity period of a Manx trust is 150 years.
The Department approves the proposed Company name that has to be incorporated. The application must contain information relating to the nature of the company’s proposed business and details if any, that holds a particular significance in the proposed name. Certain words notably “Bank”, “Trust”, “Holdings”, “Fund” and “International” are not acceptable for inclusion in a company name unless a situation permits it.
Additional information may be requested from the Department or a minimum paid-up share capital is demanded before approval for the adoption of such names. There is no requirement to disclose the identity of the beneficial owner of the proposed company.
Companies registering under the Companies Act 2006 need to submit the following documents for Incorporation of a new company.
A company formed under the Company’s Act 1931 to 2004 can re-register under Company Act 2006. The following documents need to be submitted
Taxable income, after deduction of personal allowances and available reliefs, is taxed at adjusted rates ranging from 10% to 20%, with the exception of non-resident individuals whose income is charged to income tax at a flat rate of 20%.
Social security contributions are payable by both employers and employees and are calculated as a percentage of the employee’s wage.
The Isle of Man government has announced a key employee initiative, which enables approved key employees moving to Isle of Man to facilitate the process of starting up a new business or the diversification or expansion of an existing one, to be taxed only on their Manx-source income for the first three years of residence.
The Isle of Man does not tax capital gains nor does it have any form of gifts or annual wealth tax. There is no inheritance tax or estate duty but there is a small probate levy.
Residents
Income tax is payable on 6th January in the year following the year of assessment, or 30 days after the issue of an assessment, if later. A payment on account for the following tax year is also due on 6th January.
Tax returns are due by 6th October following the end of the tax year. Penalties can be imposed for failure to file a tax return by the due date and other tax misdemeanours. Interest is charged on late payment of tax.
Isle of Man residents are entitled to a tax-free personal allowance. For 2012-13, single persons are entitled to a personal allowance of GBP 9300 and married couples, who elect for joint assessment are entitled to a combined allowance of GBP 18,600.
Non-Residents
Income tax is payable in line with that of resident individuals. A non-resident individual’s taxable income is charged to income tax only at the higher rate. However, for certain types of income arising from the Isle of Man, a non-resident will have their liability capped at the amount of income tax, if any, deducted at source.
A non-resident is not entitled to a personal allowance. Non-resident married couples are not entitled to opt for joint taxation.
Although modelled on English law, Manx law has been adapted to meet the Isle of Man’s own special circumstances, particularly with regard to direct taxation, company law and financial supervision.
Companies registering in the Isle of Man must have a registered office and a registered agent within the Island.
The Companies Act 2006 sets out a streamlined process for registering a business in the Isle of Man, subsequently reducing paperwork and fewer regulations. Companies formed under Acts 1931- 2004 can be converted to the Company Act 2006.
A minimum of one director and one shareholder is required to incorporate a company. There is no requirement of either of them to be a resident of Isle of Man. Companies can no longer issue bearer shares. Legislations allow a company to acquire its own shares.
Companies incorporated outside the Isle of Man which establish a place of business in the Isle of Man are required to register with the Isle of Man Companies Registry as F-Companies under Part XI of the Isle of Man Companies Act 1931 ("Part XI"). The purpose and effect of F-registration is essentially to place a foreign registered company under a similar reporting and disclosure regime to an Isle of Man incorporated company.
Part XI of the 1931 Act is replaced with new stand-alone legislation in the form of the Foreign Companies Act 2014 (the " FCA 2014"), which came into force on August 1st 2014.
UK Immigration Rules are extended to the Isle of Man for regulating the entry into and the stay of persons in the Isle of Man and contained within the statement laid before Tynwald on 17th May 2005.
UK & Isle of Man share the same immigration legislation. Those allowed to enter UK freely are entitled for the same in the Isle of Man. Citizens of European Economic area, UK, Ireland, the Channel Islands do not require a permit to enter.
The Control of Employments Acts states, an individual may only work on the IOM for a maximum of 3 days or in certain cases up to 10 days a year before they require a work permit, unless they are an Isle of Man worker.
A company, which is a member of an international group, may employ persons who are mainly employed outside the Island for up to 48 days a year.
Employment, which consists of establishing a branch in the Island, or subsidiary of a business carried on elsewhere or relocating a business in the Island from elsewhere - the exemption is subject to the following conditions. It only applies to a business being established or relocated from outside the Island and so, does not apply to new businesses being established from within the Island.
The work permit office has a target that 80% of work permit applications will be processed within 10 working days of receipt. An application referred to the Work Permit Committee will take longer.
