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Background:
The Isle of
Man is a self governing British Crown Dependency located in
the Irish Sea between England and Ireland. The island is independent
of the United Kingdom. The British Government is responsible
for the foreign affairs and defence of the Isle of Man, however
the Island has its own legal system derived from English Common
law. Her Majesty Queen Elizabeth II is the Head of State. She is
represented by the Lieutenant Governor. The Isle of Man Government
has established "The Financial Supervision Commission" to monitor
Banks, Shipping, Insurance and Financial Services to maintain a
good reputation as a Financial Centre.
Type of Company(s):
Resident Companies:
Such companies
can work from the island and residents can have a beneficial interest.
Resident companies have a Manx income tax of 20% of profits
which are derived from any part of the world. Sums paid by way of
dividends and corporate allowances are deducted from income or
profits before assessment to tax. United Kingdom has a double taxation
agreement with the Isle of Man.
Non-Resident
Companies:
The management
and control for these type of companies must be exercised outside
of the island, however the secretary may be a Manx resident.
If the company is controlled from abroad and a non-resident declaration
is filed, no Manx income tax is payable.
Regardless of any profit or losses, the sum of £600 has to be paid
as a flat duty payable when filing the Company's Annual Return.
This is known as a non-resident company duty (NRCD).
The Isle of Man company requires a minimum of two directors. Corporate
directors are not permitted, however, there are no restrictions
regarding the nationality of directors, although at least one of
the directors has to be a resident of the Isle of Man. Details of
the directors are lodged with the Companies registry. Corporate
shareholders are permitted and the usual share capital is £2000,
however there is no maximum authorised share capital.
The Registered Office of the company has to be maintained in the
Isle of Man.
Exempt
Companies:
This type
of company can be resident in the Island and must complete the relevant
application form for tax exempt status for which the sum of £300
is payable on an annual basis. No resident of the Isle of Man is
entitled to have an interest in the company although another exempt
Isle of Man company can be its owner. All profits from the company
have to arise from outside the Island. An exempt company must have
at least one resident Director and Secretary.
International
Companies:
A company
registered in the Isle of Man can apply for 'international' status
for Manx Income Tax purposes under the International Business Act
1994. The options are as follows:
- Minimum
income tax of £300.00 p.a.
Or
- Part or all of its
income payable at a rate up to but not exceeding 35% of Manx
income (subject to agreement with the income tax authorities)
Annual fees of £2000 are payable
to the Government. Special regulations apply to exempt these companies
from Manx income tax. The main criterion to obtain exemption is that
underwritten profiles and losses must arise only on insurance rises
undertaken outside the Island. These companies may carry on business
with other exempt Manx insurance companies.
Summary Benefits:
- Close
proximity to Europe
- Non-Resident and Exempt
Companies are exempt from domestic taxation
- Private companies do
not file any accounts
- No
wealth, capital gains, gift or inheritance taxes
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