Despite the variety of currently known organizational and legal forms of companies established in the Isle of Man and the fact that the Isle of Man is an offshore centre historically recognized by entrepreneurs around the world, this jurisdiction has begun to lose its attractiveness for foreign investors for some time now. This was primarily because all companies on the island had to have local directors and secretaries; this dramatically increased the offshore instrument value.

Offshore companies

A new law on companies to be established in the Isle of Man has recently introduced a number of provisions that may be of interest to the reader.

First of all, it should be noted that the status of so-called non-resident and tax-exempt companies in the Isle of Man is abolished (regardless of who owns the company and where it is managed from); now, all companies established on the island have a resident status.

Moreover, the tax rate for all island companies is reduced to zero, except for companies involved in banking and investment activities in the Isle of Man.

Under the new law, a company may be established by one physical or legal person of any residence. There are no requirements to the charter capital and the need to pay it up.

The company may be managed by a sole director of any residence, but if the director is a legal entity, it should be a company duly licensed in the Isle of Man as a corporate services provider.

Each company needs to appoint a corporate agent duly licensed in the Isle of Man as a corporate services provider.

The new law has abolished the obligation for the company to have a local secretary.

The new law has no such concept as a nominee director in the Isle of Man. Each director appointed in the company is responsible to perform the duties assigned by the law of the island and the charter of the company.

Bearer shares may not be issued by companies in the Isle of Man.

Information about directors and shareholders of local companies is public.

Copies of the company’s shareholders and directors registers, annual reporting and accounting statements, specimen seal impression and minutes of general meetings and directors’ meetings should be duly stored at the corporate agent address in the company’s registered office.

Although a company is released in the Isle of Man from filing the annual financial statements (audited statements are required only for public companies), each island company’s accounting should be carried out in due format and be available at the first request of the Companies Registrar or the local tax authorities.

The company’s annual statements includes the Annual Return in respect of the current company’s structure (directors, shareholders, their addresses).

It should be kept in mind in doing offshore business in the Isle of Man that even a minor delay of filing financial statements or other required documents to the authorities as prescribed by the Companies Act would be punished with a fine without mercy.

Local companies may not be relocated to another jurisdiction without being dissolved.

Despite the ease of the tax burden and some liberalization in relation to directors, the strictness in the approach to administration, the local agents’ requirements regarding the disclosure of information under the KYC rules and quite high annual fees in the Isle of Man may attract only those potential investors who have a specific interest here.

The Economic Substance Act, 2019

The Isle of Man has passed the Economic Substance Act which can be found on this page.

Isle of Man Double Taxation Agreements

Australia, Bahrain, Belgium, Denmark, Estonia, Faroe Islands, Finland, Finland, Greenland, Guernsey, Iceland, Ireland, Jersey, Luxembourg, Malta, New Zealand, Norway, Poland, Qatar, Seychelles, Singapore, Slovenia, Sweden, United Kingdom.

Information has been exchanged with the USA under an agreement to implement the Foreign Account Tax Compliance Act (FATCA).

The UK and Isle of Man governments have been exchanging  information under an agreement extending the automatic disclosure of tax information.

The Isle of Man has also committed to adopt the Common Reporting Standard for tax information agreements.

99 classical offshore, onshore and midshore jurisdictions of Europe, America, Middle East, Asia, Africa and Oceania