ISLE OF MAN FOR

BUSINESS
Steve Cummins
Transworld Group, Isle of
Man
transworldgroup.im
trasworldcapital.im

THE ISLE OF MAN

Independent from UK but with
strong links
1000 year old Parliament
makes its own laws
Diverse population of 80,000
Traditional Industries Farming
& Tourism
Now
International
Financial Centre of Excellence

ABOUT THE IOM: EASILY ACCESSIBLE

Serviced By Air:

Travel By Air
16 Destinations
Over 100 flights a
day
1 hour from London
City

ABOUT THE IOM: INTERNATIONAL

RELATIONS
UK

Europe

Rest of World

Self governing
Independent
Financially
independent
Sterling currency
Common Customs
& Excise Agreement VAT

EU Relationship

Strong feedback

governed by Protocol
3
Free movement of
goods
Free movement of
people
No contributions to
or receipts from EU
EU Savings Directive

IMF, OECD, FATF

International
standard regulation
Good international
citizen
Strong business
links
Independent
international
representation

ABOUT THE IOM: A PROUD HISTORY

Oldest continuous parliament in the world over 1,000 years

Open consultative government
Strong, stable economy 25 th straight year of economic
growth
Infrastructure investment - over 1bn in health, education,
water, communications, power, etc
Gaelic welcome diverse population of languages and
cultures

WHY LOCATE IN THE ISLE OF

MAN
Simply put, we have all the elements
that can support business.
We believe in financial freedom, a
strong but pragmatic regulatory
regime and giving businesses
freedom to flourish.
We have a stable political system,
excellent infrastructure, a strong
economy and a flexible work permit
system.
People and businesses come to the
Isle of Man because they are made
welcome and because they can
thrive.

World Famous for TT

Races

WORLD CLASS ECONOMY:

BUSINESS FRIENDLY
Total Bank Deposits of 50billion Dec 2007
30,000 registered companies
Well regulated financial industry
Common law jurisdiction
Zero percent corporate tax
Tax cap for individuals

TAX REGIME SMART TAXATION

Tax system is EU Code of Conduct compliant
Zero % rate for majority of corporations
Low rates for individuals maximum 18%
Budgeted and sustainable tax strategy in a robust
economy
Standard & Poors and Moodys AAA sovereign credit
rating

THOROUGH YET PRAGMATIC

REGULATION
Commitment to quality business and the
reputation of the Isle of Man
Regulators work in partnership with industry to
develop realistic best practices
Policies developed from close work with OECD,
IMF, FATF etc.

INTERNATIONAL PROFILE OF
THE
ISLEfinancial
OF centre
MAN
Only Offshore
with top ratings from OECD, FATF and
Financial Stability Forum

IMF reports 2003 and 2008

Financial Times award for Best International Territory - 2001
Winner - Best International / Offshore Finance Centre Awards 2006
Winner - European Financial Centre of the Future Awards 2005 (The
Banker)
Standard & Poor AAA Rated

FBI Compliments Island February

2001
a well-regulated financial industry, money-laundering
regulation anddemonstrates the need for global law
enforcement co-operation

IOM: A COMPETITIVE LOCATION

Cayman

Dublin

Channel
Islands

Isle of
Man

22

12

150

225

Population

40,000

1.5 million

160,000

75,000

Detached House
Price

1.2
million

750,000

600,000

300,000

55,000

40,000

40,000

30,000

N/A

50%

30%

7%

3 months

N/A

1 month

4 days

Zero

12.5%

20%
(Changing
)

Zero

Square Miles

Average Fund
Accountant Salary
Staff Turnover
Average length of
time for
work/housing
permit
Corporate Tax Rate

SUMMARY
A World Class Economy
Self Governing Crown Dependency
Stable & diversified economy
Standard & Poors and Moodys AAA Sovereign credit rating
Political stable for 1000 years
Diversified Sectors

Place for Business

Easy access to London & EU
Common VAT area with UK and EU
Tax neutral with 0% taxation for all corporations except banking activity 10%
rate
Corporate Re-Domicile provisions
Leading Non UK AIM listing with GBP9.3bn
Excellent IT and power
Financial Assistance Scheme for new business

As

a Place to Live
Low personal tax rate (max 18%) with generous allowances
Excellent education systems
Flexible work permit system
Affordable housing
Low crime

BUSINESS STRUCTURES
Companies

Standard Company
New Manx Vehicle
Limited Liability Company
Protected Cell Company

Trusts
Discretionary
Life Interest
Accumulation &
Maintenance
Various Others

1931 COMPANY
The standard Isle of Man Company
Each company has a memorandum and articles of
association (incorporation)
Types include
Public companies, which must file accounts
Private companies, which cannot offer shares to the
public
Companies limited by shares
Companies limited by guarantee
Unlimited companies.

Commercial companies are usually limited liability

companies having a share capital.

NEW MANX VEHICLE

NMV, under the Companies Bill/Act 2005, will be possible

minimal registry filings

unlimited capacity, but restricted objects permissible
no capital maintenance requirements (subject to solvency)
no authorised capital
shares of no par value possible
redemptions and purchases of shares
distribution of income and capital possible (subject to solvency)
no financial assistance prohibitions

in general

no annual return requirements

requirement for a registered agent
corporate directors permitted within certain limits
no prescriptive accounting requirements

LIMITED LIABILITY
COMPANY
Based on the Wyominglegislation
Main purpose was for tax reasons
Has limited liability and corporate personality
but is taxed as if it were a partnership.

Popular as a simple form of business vehicle

the members can also manage the company
no separation of ownership and management as with other forms of company.

The main characteristics of the LLC

Liability is limited to the amount of capital contribution made by the members
there is no share capital as such.
Members have the right to manage the LLC in relation to their capital contribution or they can
appoint a manager
There are no Directors
Taxation

members pay income tax on their share of the profits, however

if the LLC is owned by non-resident members and has no Manx-sourced income then it may be exempt from
all Manx taxation.

LLCs may exist for an unlimited period

Automatically be wound up on the death, resignation or disqualification of a member
If there are two or more members remaining then they can resolve to continue

UCTION

PROTECTED CELL COMPANY

CELL
CELL

CELL

CORE
CELL

CELL

PROTECTED CELL
COMPANIES (PCCS)
Basically a standard company limited by shares
Separated into legally distinct cells
Each cell has its own proportion of the overall share capitalof the PCC,
Each cells assets, liabilities and tax liabilities are kept separate from each other cell.
Shareholders can own an entire cell but at the same time only own a small proportion of the PCC as a whole.

The PCC is a separate legal entity.

The separate cells created by the PCC do not become legal entities separate from the PCC itself.
Cells are created by the PCC for the purpose of protecting cellular assets using the provisions contained in the PCC Act.
Cellular assets are the assets represented by the proceeds of cell share capital, and all other assets attributable to the
cell.
Initial use
Captive insurance
Funds
Collective investment schemes
PCC structures can be particularly useful in allowing ring
Useful
Ring fencing of individual client or intermediary assets
Provides a layer of risk management not afforded to these schemes previously, and this could prove to be attractive to
high net worth clients.

ACCOUNTANCY AND
AUDITING
Recognised bodies
The Institute of Chartered Accountants in England
and Wales;
The Institute of Chartered Accountants in Scotland;
The Institute of Chartered Accountants in Ireland.
The Chartered Association of Certified
Accountants; and
The Chartered Institute of Public Finance and
Accountancy.
Financial Supervision Commission may authorise a
person to act as an auditor of a private company.

AUDIT EXEMPTION
Criteria is similar to those used in the United
Kingdom.
A company can be an audit exempt company if it
meets two of the following criteria:
its annual turnover is 5.6million or less;
its balance sheet total is 2.8million or less;
its average number of employees is 50 or fewer.

TAXATION

TAXATION - PRINCIPLE
TAXES
DIRECT TAX =INCOME TAX
Resident individuals and companies are subject to Manx income tax
on their worldwide income.

INDIVIDUALS

BASIC RATE AT
10%
HIGHER PERSONAL RATE
18%
CAPPED per individual 100,000-00

Corporate

STANDARD RATE
0%
BANKS
10%
PROPERTY COMPANIES 10%

TAXATION - Indirect Taxes

Value added tax

Basic rate
Low rate
Zero Rate
Exemptions

17.5%
5%
Outside United Kingdom

Customs and Excise duties

TAXATION - Other
Isle of Man does not levy:

Corporation tax or advance corporation tax

Capital gains tax
Capital transfer or gift taxes
Wealth taxes
Stamp duties
Death, estate or inheritance tax

ALTERNATIVE INVESTMENT
MARKET (AIM)
Isle of Man- over 50 companies listed on AIM
15 companies in the AIM 100
The Isle of Man has more high performing
companies listed than any jurisdiction other than
the UK (the next jurisdiction only has 6).

ALTERNATIVE INVESTMENT
MARKET (AIM)
General rate of corporate income tax
0%
No capital gains or stamp transfer taxes
Not a regulated entity
Shares can be traded through CREST without the need to use
depositary receipts
NMV is a new simple and flexible corporate structure
Removal of capital maintenance requirements
Less prescriptive prospectus requirements

The Isle of Man is a common law jurisdiction in which company

and trust law is closely aligned to that of England and Wales
Security concepts are the same as in England and Wales
The provision of company administration services is a
regulated activity on the Isle of Man

THE QUALITY INTERNATIONAL

AIM VEHICLE
Lawyers increasingly using IOM
Capacity for new business
Speed and flexibility
Highly cost effective
Strong skill base/fund expertise
Reputation for quality key to Institutional Investors
.a growing success story

THE BROWNE CRAINE GROUP

BROWNE CRAINE & CO

Newest member of TIAG
April 2008
Over 25 years of
success
Wide variety of services
& clients
Our Offices Burleigh Manor, Douglas, Isle of Man

Based in the Isle of Man

PEREGRINE CORPORATE
SERVICES

PROVIDING HIGH QUALITY BESPOKE SERVICES TO

COMPANIES AND TRUSTS SINCE 1986

PEREGRINE CORPORATE
SERVICES
THE SERVICES
Companies Incorporations
Fully managed
AIM listings
Trusts

Establishment
Provision of Trustees

COMPANIES
Why Isle of Man?
Zero % Tax for majority
VAT registration as though UK
A strong reputation
Access to EU markets
IOM resident directors not
required
Robust regulation

IOM COMPANIES - USES

TRADING

INTELLECTUAL
PROPERTY

HOLDING

SHIPPING / YACHTS
CONSULTANCY
PROPERTY

PRIVATE AIRCRAFT
FINANCING

CONSULTANT / SPORTSPERSON
/ ENTERTAINER
IOM
Company

Funds

Funds

Non-resident
Individual

Country
X

Invoice

CASE STUDY Performer / Sportsman / Consultant

CONSULTANCY
Individual works on several short term
contracts all over the world.
IOM company bills their clients incl VAT if
required.
IOM company pays no tax on income.
IOM company distributes profits as and when
required to shareholders.
Depending on tax rules in home country, profits
can accumulate tax free in IOM company.

TRADING COMPANY
Country
B

Country
A
Invoice

Invoice
Funds

IOM
Company

Funds

GOODS

CASE STUDY TRADING

COMPANY
International Trading Company

Goods sold from Country A to Country B.

IOM company issues invoice Country B.
Country A invoices IOM company at
lower price.
Profit is isolated in IOM Company at 0%
tax on profits
Care required Transfer Pricing / CFCs

PROPERTY COMPANY
IOM
Company
Rental Income
Finance

IOM
Bank

Purchase

UK
Property

CASE STUDY PROPERTY

COMPANY
Property Company
UK Shareholder invests in an IOM company to purchase
UK property as he plans to leave UK in future.

IOM company borrows from a bank in IOM several

major banks & many contacts.
IOM company pays no tax on rental income in IOM,
but will pay tax in UK Peregrine area of expertise.
Property sold in future when shareholder has left UK.
No capital taxes on disposal for IOM company.
Depending on tax rules in new country of
shareholder, capital taxes may be avoided.

SHIPPING AND AIRCRAFT

REGISTERS

SHIPPING REGISTER

Historical shipping register, since 1786

1984 established as an International Register

Developed and respected shipping sector

Steady growth of register and sector

2003 introduction of commercial yachts

Developing yacht sector

Centre of excellence ships and yachts

GROWTH OF SHIPPING
REGISTER

WHY ISLE OF MAN?

Political and Economic stability

Secure financial Jurisdiction

Quality of Register and shipping centre

Low cost no annual dues

Corporate vehicles and tax structures

Supportive and pro-active government

Customer focused registry/survey teams

Pragmatic approach to regulation

British Flag which is not the UK

AIRCRAFT REGISTER

Planned in 2005 - to mirror and complement Isle

of Man register for commercial yachts

Opened for business 1 May 2007

Private & corporate only, not commercial air

transport

Offers unique M-registration (e.g. M-MANX)

No insurance premium

European time zone

Helpful, flexible and pragmatic approach

Cost effective and high quality register

WHERE NEXT?
Space industry Public & Private
IOM owns satellite orbiting slots
Space University in IOM

Forward-thinking attitude of
Government & Industry

COMPANIES OUR
Incorporation of companies
SERVICES
Full management & control
OR
Incorporation & support
Not just IOM, other
international companies

5 qualified accountants as directors of your company

Well regulated location with strong reputation
Provision of directors/services to AIM listed companies

TRUSTS - INTRODUCTION
Used since 10th Century
Wealth protection
Assets entrusted to associates =
TRUSTEES
Trustees act for the benefit of the
BENEFICIARIES
Legally recognised arrangement

TRUSTS - STRUCTURE
SETTLOR
Assets

TRUSTEES

Can decide

BENEFICIARIES

TRUSTS USES
Estate and inheritance planning avoid probate
Provision for family members/employees
Protection of assets
Tax advantages if long term financial gains
expected
Charitable reasons

TRUSTS
DIFFERENT
TYPES

Discretionary - letter of wishes

Interest In Possession life tenant

Accumulation & Maintenance children & grandchildren
Purpose Trusts Law since 1996, Independent enforcer
required
Will Trusts additional inheritance planning

TRUSTS CASE STUDY

SETTLOR
Grandparent

Assets

TRUSTEE
Trust Fund

Lifetime Income

BENEFICIARY
Children

Assets
On Death

BENEFICIARY
Grandchildren

TRUSTS CASE STUDY

SETTLOR - Grandparents settle investments into

Trust
TRUSTEES - Become legal owners and take
responsibility for investments.
Settlor provides guidance to Trustees via a Letter
of Wishes
Income from investments used to provide regular
income to children during their life - BENEFICIARY
Upon death of children, assets pass to
Grandchildren - BENEFICIARY

TRUSTS WHY ISLE OF

MAN?

Trust service providers regulated

High standards and expertise
History of Trust law Statute & Common law
Foreign laws re transfer of assets excluded
No statutory requirement to notify beneficiaries
No Tax providing no Manx income or beneficiaries