ISLE OF MAN
Prestigious jurisdiction, especially for those who need a VAT number for trading within the EU. It’s possible to open bank accounts, to provide a Nominee service to sign a bank account to open an account, for complete privacy protection. As far as taxes and duties are concerned, the Isle of Man is in the state of the so-called "common wallet" with the United Kingdom. Therefore, the basic VAT rate is in-line with the UK rate, i.e. at the rate of 17.5%. The income tax rate applicable to the Isle of Man for a company non-performing activity in the banking area and real estate business here is 0%.
- The Isle of Man is located between England, Scotland, Ireland and Wales, and is dependent on the British crown.
- It has just 572 square kilometres and has a population of 85,000.
- The island is an integral part of the Kingdom of Great Britain and Northern Ireland, but only as a self-governing area under the British crown.
- The Queen is the head of the island and is represented by a local governor.
- GDP is dominated by the offshore sector and tourism.
- For a long time, due to its tax laws, the island was in the doghouse with many advanced states.
Setting-up a company and business on the Isle of Man:
- The Isle of Man has become one of the most popular tax havens in recent years.
- Currently it’s home to many online casinos and bookmakers. It’s also a sought-after destination for film crews that benefit from tax relief. You can join them.
- A company based on the Isle of Man offers a good opportunity for tax optimisation, while real business activities take place outside of the island’s territory.
- The basic corporate tax rate is 0%, but in some cases it may increase to 10%. No capital gains tax, no stamp duty, no inheritance tax, no withholding tax. Double taxation exemptions are available to foreign entities. It sounds as if the magic phrase "no" was the most popular word on the Isle of Man. For you, this means that it’s one of the most attractive jurisdictions in the world.
- The island offers its good reputation and legal system based on English law, so you don’t need to get used to any exotic law.
- Actual dividend payments are exempt from the payment of withholding tax on the island. It sounds like paradise music!
- Regarding paperwork - some is required, but to a minimum extent. For example, a report on annual yields is necessary. Accounts must be kept at the company’s registered address, but the company isn’t subject to audit! For you and your staff this means less work!
- Another bonus you’ll definitely like is that there is no currency control applied and no other financial limitations exist here. For everyone in international business, this is great news.
- The Isle of Man concluded an agreement with the Czech Republic in 2012 for the exchange of tax information. If this doesn’t suit you, you need to look at another jurisdiction
The most common use of Isle of Man offshore companies:
- Possession of an investment, such as a portfolio, UK commercial real estate and other corporate interests - these activities are not taxed;
- Simplified intra-EU trading in relation to the zero income tax rate and the possibility of obtaining a VAT number for intra-EU trading;
- Possession of intellectual property rights, as IOM is a signatory to the Paris Convention on Patents and Trademarks.
The specifics of setting-up offshore companies on the Isle of Man
- Establishment of the company in 3 - 5 days after the company name has been approved by the Commercial Register. The name may end only with the words Limited or Ltd, Public Limited Company or PLC.
- An offshore company can only be established with one shareholder, who may have a single share of zero value. It’s permitted to appoint one Director and this person mustn’t be an IOM resident.
Type of legal entity: Limited Liability Company
Founding time: 2 weeks
Number of shareholders: at least 1, any nationality is possible
Shareholders: Members may be FO or business entities.
Registered capital: not defined
Bearer shares: Not allowed
Registered address is mandatory but needn’t be physical
A company secretary is required
Directors: at least 1, maximum is not defined
Resident function of director: the director doesn’t have to be an Isle of Man resident
Corporate Income Rate 0%
Retail tax rate 0%
Tax rate on capital gains 0%
Withholding tax on dividends, interests, royalties 0%
Net operating losses can be recovered with earnings a year earlier and without limitation.
The Isle of Man and the United Kingdom are considered as one of the VAT areas.
Agreements to avoid double taxation with different countries have been applied, determining the tax rates of dividend, interest and royalties.
Accounting. Accounting and accounts preparation is necessary
Audit isn’t required
Anonymity and privacy. Information regarding directors (managers) and shareholders is open in the Commercial Register.