Isle of Man

Isle of Man Company Formation

Synopsis

The Isle of Man is a Crown Protectorate located between the United Kingdom and Republic of Ireland in the middle of the Irish Sea. Historically it has close ethnic connections to Ireland, Scotland and the Vikings. For many years the Isle of Man has sought to establish itself as a credible tax haven and financial location mostly with success. The capital city is Douglas. The land area is 572 square kilometres. The population is 82,300 (2009)

The Manx Government has sought to emulate Ireland whilst also trying to avoid discriminatory action against its companies by high tax countries, primarily by introducing a universal zero corporate tax rate for all limited liability companies save those involved banking and finance. This action of imposing a flat rate of corporate tax plus enforcing all companies to submit annual accounts just as in Ireland should make the jurisdiction very attractive and more accepted by the international community. Nevertheless, for those setting up a medium to large enterprises, Ireland, despite its 12.5% tax rate, will still be hard to beat given its reputation, larger size and excellent tax treaty network. However, for those wishing to set up a zero % company within the EU and with the possibility of registering for VAT, the Isle of Man is probably unbeatable.

Star Ratings

Corporate registration efficiency

5

Cost

5

Confidentiality

4

Local Banking facilities

5

Legal system

5

Political stability

5

Reputation

4

isle-of-man

Location

The Isle of Man is located almost equidistant between Ireland, England and Scotland.

Tax Planning Credentials

Zero Rate Manx Companies

Since 2006 there has been a Zero Corporate Tax Rate save for Banking & Finance Companies - All Manx companies must now have full and licensed local professional management facilities. The principal advantage of the Isle of Man is that whilst there is no exposure to corporate tax they may still register for a UK VAT number despite not being part of either the UK or the EU (See Protocol 3 of the Treaty of Rome 1972). It is important to note that all Manx companies are legally obliged to maintain and submit trading accounts at the end of each financial year. The accounting standards are virtually identical to those of the United Kingdom.

Registering Foreign Companies For Vat In The Isle Of Man

It is very popular to register branches of non-resident companies such as US Limited Liability Companies (LLCs) and in particular UK non-resident Limited Liability Partnerships (LLPs) as the later have the prestige of being genuine British legal entities – subject to UK laws and accountancy procedures as well as those of the Isle of Man – with a genuine EU VAT number but unlike other UK companies are not subject to UK corporate taxes.

Personal Tax

The Manx starting personal income tax rate is 10% rising to 18% and unlike the Republic of Ireland or the UK is payable on worldwide income no matter ones domicile status provided that one is fiscally resident in the Isle of Man.

Yacht Registration

The Isle of Man is very popular as a flag of convenience location as registered vessels can fly the British Red Ensign Flag and VAT may be reclaimed by Charter Companies.

Benefits

  • Pro-business environment with zero corporate tax rates
  • Highly respectable and credible jurisdiction
  • Management professionals must be licensed
  • Part of the UK for VAT purposes but not for tax
  • Not part of the European Union
  • Uses Pounds Sterling
  • Highly educated population
  • Excellent vessel registration location for charter companies
  • UK accounting standards
  • Highly developed corporate and general law based on UK law
  • Excellent communications
  • 10-18% personal income tax rate
  • Efficient company registration system
  • Stable economic environment

Double Taxation Treaty Network

The Isle of Man only has one double taxation treaty and that is with the United Kingdom and involves the exchange of information in respect of UK tax residents – Notwithstanding this does not pose a significant problem even for UK fiscal residents provided structures have been properly set-up.

Administration & Accountancy Services

Managed Manx Companies Services

The key service offered by SCF Accountancy & Law is that of a fully managed Manx company whereby we register your Company, act as the legal and accountancy daily administrators, liaise on your behalf with the Manx Revenue Commissioners, the Company Registration Office, maintain the registered office, company minutes and in fact everything necessary to provide you with a fully functional registered ZERO TAX MANX COMPANY – In précis, no matter your Manx corporate needs, SCF Accountancy & Law can provide a bespoke service!!

Fully Managed Manx Company Services

  • The appointment of a qualified accountant to act as Company Secretary
  • The opening up of a bank account for your company with access provisions agreed by SCF Accountancy & Law, the bank and of course the beneficial owners
  • A Full Management Agreement setting out the rights and obligations of all parties
  • The provision of a Manx registered office address for service of process and official mail
  • The application for a VAT number
  • The maintenance of all requisite company minutes, ongoing companies registration office submissions, annual returns and AGM preparation
  • The annual submission of the Revenue Commissioners Assessment of Tax Form
  • The management of the company's VAT submissions, payments and VAT reclamations on a monthly or quarterly basis both for trading and vessel charter companies
  • The maintenance of the company's accounts supported by a quarterly report ready for the submission to the Revenue Commissioners including the corporate tax calculation. Accountancy will be maintained in either SAGE or Quick Books format
  • The appointment, if required or appropriate, of auditors
  • Advice on general Manx tax mitigation and the company's maintenance by a dedicated company accountant

Set-Up & Annual Maintenance Fees

For information on our highly competitive fees please see the separate Manx Quotation Insert.

The Trading Office Option

This Option includes SCF Accountancy & Law actually providing the day-to-day trading, telephone answering, website management (if required), order reconciliation, invoice issuing and trading office facilities for your Manx company operation which can be made bespoke to your exact needs all at a fraction of the cost of setting up and maintaining you own office in the Isle of Man.