Isle of Man Private Company Limited By Shares
The Isle of Man is a high-reputable international finance and international business center due to its political stability, business-friendly policies and an attractive fiscal and regulatory environment.
In 2006, it came into force the Companies Act 2006, which currently co-exist with present and future companies incorporated under the previous Isle of Man Companies Act 1931.
The newest Companies Act presents several advantages over the previous one:
Under the Companies Act 2006, the ultra vires doctrine does not apply. This means that a company has unlimited capacity to carry out any business or transaction if it is in the best interests of the company to do so, notwithstanding any provision to the contrary in a company’s memorandum and articles of association.
Companies incorporated under the Companies Act 2006, may have a single director and may be corporate, instead of the two individual directors required by the Companies Act 1931.
Share capital and class of shares issued provisions are more flexible.
There is not a distinction between private and public companies and therefore shares may be offered to the public.
Directors may authorize distributions by the company to its shareholders at such time and of such amount they deem appropriate if the company if the financial viability of the company is not compromised immediately and the company passes the solvency test.
Accounting requirements are noticeably lower. Companies subject to the Companies Act 2006, are only required to keep accounting records and those may be kept anywhere. Financial statements preparation is not mandatory and private companies are exempt from audit. In the Companies Act 1931 Act, companies are required to file financial statements and audit their accounts if their turnover, balance sheet and the number of employees exceeds a certain threshold.
2006 Act Companies are not required to file with the Registrar details of any change in its directors as they occur, share capital variation or alteration, any allotment of shares or any shareholders’ resolution.
These changes have been aimed at competing with jurisdictions that offer international companies that are easy to manage and with advantageous tax systems such as the British Virgin Islands, Cayman Islands or Bermuda. With the addition that Manx companies are not restricted from carrying out onshore transactions or own assets located on the island.
Companies incorporated in the Isle of Man are subject to corporate income tax at a 0% rate. A 10% tax rate for companies engaged in the financial services business and Isle of Man’s property transactions.
Dividend distributions, royalties, and interests paid to non-Manx residents are subject to withholding tax at the rate of 0%.
In addition, the Isle of Man is part of the customs territory of the EU under Protocol 3. Therefore, Manx incorporated entities benefit from free trade with the EU and EU VAT registration.
However, the recent BREXIT has created uncertainties on the Isle of Man’s future relationship with the EU and companies holding EU assets and trading with the EU.
The Isle of Man is a signatory to the Paris Convention on Patents and Trademarks, making the Isle of Man limited company an interesting vehicle to hold intellectual property.
The Isle of Man has also enacted legislation for businesses dealing with cryptocurrencies. The Designated Business (Registration and Oversight) Act 2015 regulates cryptocurrency businesses, such as exchanges, and requires them to register with the Isle of Man Financial Supervision Commission and comply with Anti-Money Laundering and Countering Terrorist Financing legislation and the Proceeds of Crime Act 2008.
The country has also a strong E-Gaming industry, due to its gaming license simple application process, low betting duties, its extensive cluster of services providers/advisors with experience in the industry and its supportive legislation.
The Isle of Man has started to undertake the first OECD automatic exchange of information (AEoI) through Common Reporting Standard (CRS) in 2017 and has signed over 50 tax information exchange treaties (TIEa) and 11 double taxation agreements (DTA).
Companies conducting relevant activities such as fund management, banking, insurance, finance and leasing, distribution and service center business, headquarters business, intellectual property business, shipping, and holding company business – are required to meet economic substance requirements:
conduct its core income-generating activities in Isle of Man (which are defined in the law).
be directed and managed from within the Isle of Man.
have an adequate amount of operating expenditures incurred in or from within the Isle of Man.
have an adequate physical presence (including maintaining a place of business or plant, property, and equipment) in the Islands.
have an adequate number of full-time employees or other personnel with appropriate qualifications in the Islands.
Holding companies which only hold equity participations in other entities and only earn dividends and capital gains will be subject to a reduced economic substance test – it must have complied with all applicable filing requirements and must have adequate human resources and adequate premises in the Islands for holding and managing equity participations.
With respect to IP holding companies – companies that are exploiting IP rights and:
have not created such IP
have acquired the IP from a company of the same group structure or from a third-party that has conducted research and development out of Isle of Man and licenses the IP to a company(s) of the same group
or does not carry out research and development, branding or distribution as part of its Isle of Man core income generating activities – are considered high-risk intellectual property businesses and may be subject to an enhanced substance requirements test.
All in all, an Isle of Man company is an excellent vehicle for movable and immovable assets holding, investments companies and SPVs, e-gaming and wealth management.
Legal
Country code – IM
Legal Basis – Common law
Legal framework – Companies Act 2006
Company form – Private company limited by shares (LTD)
Liability – The liability of the shareholders for the company is limited to the amount of their respective shareholdings.
Economic Substance – Companies conducting relevant activities such as fund management, banking, insurance, finance and leasing, distribution and service center business, headquarters business, intellectual property business, shipping, and holding company business – are required to meet economic substance requirements:
conduct its core income-generating activities in Isle of Man (which are defined in the law).
be directed and managed from within the Isle of Man.
have an adequate amount of operating expenditures incurred in or from within the Isle of Man.
have an adequate physical presence (including maintaining a place of business or plant, property, and equipment) in the Islands.
have an adequate number of full-time employees or other personnel with appropriate qualifications in the Islands.
Holding companies which only hold equity participations in other entities and only earn dividends and capital gains will be subject to a reduced economic substance test – it must have complied with all applicable filing requirements and must have adequate human resources and adequate premises in the Islands for holding and managing equity participations.
With respect to IP holding companies – companies that are exploiting IP rights and:
have not created such IP
have acquired the IP from a company of the same group structure or from a third-party that has conducted research and development out of Isle of Man and licenses the IP to a company(s) of the same group
or does not carry out research and development, branding or distribution as part of its Isle of Man core income generating activities – are considered high-risk intellectual property businesses and may be subject to an enhanced substance requirements test.
Share capital – There is no requirement to establish an authorized share capital, capital may be in any currency and shares may be with or without par value. Shares may be issued as ordinary, redeemable, convertible, with preference rights or non-voting rights. Bearer shares are not permitted.
Shareholders – Corporations in the Isle of Man may be formed by one or more shareholders, who can be either natural or legal persons, residents or non-residents, without limitations. Details of shareholders may not be available to the public. Nominee shareholders are permitted.
Directors – At least one director, who may be natural persons or corporations. If a director is a corporation, it must bear the appropriate fiduciary’s license granted by the Financial Services Committee. Directors’ details are available in the public registry.
Secretary – There is no statutory requirement to have a company secretary, and it may be an individual or a corporation, resident or non-resident.
Registered Address – Corporations must have a registered physical office address located in Isle of Man and must have a registered agent, who holds the appropriate fiduciary’s license granted by the Financial Services Committee.
General Meeting – Annual general meetings are not mandatory. However, if meetings are held, they can be anywhere in the world and it may be by proxy.
Electronic Signature – Permitted.
Re-domiciliation – Inward and outward re-domiciliation is allowed.
Compliance – Limited companies formed under the Companies Act 2006 are required to maintain accounting records and prepare financial statements for at least 6 years, which can be held anywhere in the world and in any currency.
Limited companies should file annually a tax return and an annual return, and pay the annual return fee, but are not required to file their financial statements, nor required to audit the accounts.
Shareholders have the right to require formal accounts to be produced and also to require an audit.
Shareholders Not Disclosed
Directors Not Disclosed
Corporate Shareholders Permitted
Corporate Directors Permitted
Local Director Required
Secretary Required
Local Secretary Required
Annual General Meetings Required
Redomiciliation Permitted
Electronic Signature
Annual Return
Audited Accounts
Audited Accounts Exemption
Exchange Controls
Common Law Legal Basis
1 Minimum Shareholders
1 Minimum Directors
GBP 1 Minimum Issued Capital
– Minimum Paid Up Capital
GBPAny Capital Currency
Anywhere Location Of Annual General Meeting
2017 AEOI
Taxes
Tax residency – A company is tax resident in the Isle of Man if it is incorporated in the Isle of Man or its place of central management and control is in the Isle of Man. A company incorporated in Isle of Man, subject to certain conditions and requiring the approval of the Assessor of Income Tax, may be considered as non-resident if it is managed and controlled elsewhere.
Basis – Resident companies are taxed on a worldwide basis, while non-resident entities are subject to tax on their income derived from the Isle of Man.
Tax rate – Corporate tax standard rate is 0%.
A 10% tax rate applies to companies conducting banking business in the Isle of Man and licensed by the Isle of Man Financial Supervision Commission, and companies conducting retail activities. Income from real property located in the Isle of Man is subject to 20% tax.
Capital gains – Capital Gains are exempt from taxation.
Dividends – Dividends received from resident or non-resident entities are generally subject to 0% tax.
Interests – Interest income is taxed at a standard rate of 0%.
Royalties – Royalty income is usually subject to taxation at a 0% rate.
Foreign-source income – Foreign-source income is usually taxable but at 0% rate.
Withholding taxes – Dividends, interests, and royalties paid to non-residents are usually subject to withholding tax at 0% tax rate. However, interest income and rental income derived from land and property may be subject to a 20% tax rate.
Losses – Losses arising from taxable income may be carried forward indefinitely. Carryback of losses to the preceding year is permitted.
Inventory – Inventories are usually valued at lower of cost or net realizable value valuation will be acceptable. First in first out method (FIFO) is permitted, but the Last in first out method (LIFO) is not allowed for taxation purposes.
Anti-avoidance rules – The Isle of Man has not enacted transfer pricing regulations. Thin capitalization and controlled foreign companies rules are also not applicable.
Labor taxes – Employers are required to make contributions to the National Insurance at 12.8% on employees’ income above IMP 118 per week, reduced rates may apply in certain circumstances.
For its part, employees pay 11% on its earnings above IMP 118 up to IMP 784 per week, above this amount a 1% contribution is payable.
Tax credits and incentives – Unilateral tax relief for foreign tax paid is available up to the tax payable in the Isle of Man.
Under the Land Development Tax Holiday, relevant profits of an Isle of Man company may be tax-exempt, if it provides productive employment in the islands. Profits included are those from new or improving commercial developments and rental income received on these commercial developments.
Personal income tax – An individual is tax resident in the Isle of Man if is physically present in the island for at least 183 days or more in a tax year, or an average of 91 days or more over 4 consecutive years.
Residents are taxed on worldwide income, while non-residents pay tax on their income derived from the Isle of Man. Income tax is levied at 10% on annual income up to GBP 8,500 and 20% on the excess. Capital gains are not subject to taxation. Investment income is taxed as ordinary income.
For non-residents, income sourced from the island is taxed at a flat 20% rate. Non-residents don’t pay tax on dividends, bank interest and building society interest are tax-exempt.
Other taxes – Companies incorporated under the Companies Act 2006 are not subject to capital duties on the creation of new share capital.
For V.A.T. and Customs duties purposes the Isle of Man and UK forms a single territory. V.A.T. standard rate is 20%.
There are no additional property taxes more than the 20% income tax payable from rental or development of land and property.
In Isle of Man there are no transfer, stamp, inheritance and wealth taxes.
Offshore Income Tax Exemption
Offshore Capital Gains Tax Exemption
Offshore Dividends Tax Exemption
CFC Rules
Thin Capitalisation Rules
Patent Box
Tax Incentives & Credits
Property Tax
Wealth Tax
Estate Inheritance Tax
Transfer Tax
Capital Duties
0% Offshore Income Tax Rate
0% Corporate Tax Rate
0% Capital Gains Tax Rate
0% Dividends Received
0% Dividends Withholding Tax Rate
0% Interests Withholding Tax Rate
0% Royalties Withholding Tax Rate
1 Losses Carryback (Years)
Indefinitely Losses Carryforward (Years)
20% Personal Income Tax Rate
0 Tax Treaties
Country Details
National Flag of Isle of Man
Currency GBP
Area Code
Capital Douglas
Continent Europe
Native Languages e n , g v
Population 75049
The Isle of Man is a British Crown Dependency formed by the main island and some islets located in the sea of Ireland, between Ireland and Great Britain. The sovereign is the British monarch, as lord of Man, who is represented by the governor-general. Its international representation and defense are the responsibility of the Government of the United Kingdom.
Like all other dependencies, it is not part of the United Kingdom, neither the European Union nor the European Economic Area. Although it does belong to the customs union of the European Union, thus benefiting from the free movement of industrial and agricultural goods.
As a member of the Common Travel Area, the free movement of citizens of the European Economic Area is also permitted.
The island is 572 sq. km. in extent and low elevation above sea level, with 621 meters of maximum altitude on Snaefell mountain. Around the main island, there are a few small islands such as Calf of Man, St Patrick, and St Michael.
The Isle of Man has about 80,000 inhabitants, of whom 26,000 reside in the island’s capital, Douglas.
The English language is spoken by almost the entire population of the island and is also the official language. Manx Gaelic is the historical language and was traditionally spoken, but today there are few who speak fluently or on a daily basis.
The Isle of Man Pound is the official currency, which is not an independent monetary unit but is a special pound sterling (GBP) issued for the island.
The Isle of Man has a completely independent government, parliament elected by universal suffrage (Tynwald) and judicial system. The executive power of the island is in charge of the General Minister and his or her Council of Ministers. The General Minister is nominated by Tynwald after each general election.
Financial services are the main economic sector. Banking, insurance, financial and offshore business services alone constitute more than a third of the island’s GDP. Recently, it has been opened an office of the International Stock Exchange to boost the financial industry of the island.
Manufacturing, tourism, and more recently gambling are other key sectors of its economy. Agriculture and fisheries, traditionally the major sectors, are currently relatively small in the Manx economy.
Services
We can help you incorporate a Private company limited by shares in Isle of Man for $4,600.
Isle Of Man Company Formation – USD 4,600.00 (All included)
We pride ourselves in providing the best possible professional service which includes our honest hassle-free “No Hidden Fee” policy. Your incorporation package includes:
All Applicable Registration and Government Fees
Certificate of Incorporation
Memorandum & Articles of Association
Appointment of Company Director(s)
Director(s) Acceptance Letter
First Board Resolution
Register of Members
Register of Directors
Share Certificate(s)
Corporate Documents’ Courier Delivery
Time to form: 2 weeks.
All our incorporation services include a yearly consulting session, a dedicated account manager and access to our global network of trusted business services, including introductions to accountants, financial, tax and legal advisors at no cost.
Bank Account Opening Support Services (Optional)
Bank Account Options*:
Isle of Man Bank Account (Remotely) – USD 700.00
Mauritius Bank Account (Remotely) – USD 600.00
Labuan (Malaysia) Bank Account (Remotely) – USD 500.00
Bahamas Bank Account (Remotely) – USD 500.00
Curaçao Bank Account (Remotely) – USD 500.00
Offshore Bank Account** (Remotely) – USD 300.00
Singapore Bank Account (In-person) – USD 900.00
Hong Kong Bank Account (In-person) – USD 1,200.00
Switzerland Bank Account (Remotely) – USD 1,200.00
Lithuania Bank Account (In-person) – USD 1,200.00
Latvia Bank Account (In-person) – USD 1,200.00
Poland Bank Account (Remotely) – USD 1,200.00
Liechtenstein Bank Account (Remotely) – USD 1,200.00
Luxembourg Bank Account (Remotely) – USD 1,200.00
Cayman Islands Bank Account (Remotely) – USD 900.00
Cyprus Bank Account (In-person) – USD 1,200.00
Armenia Bank Account (Remotely) – USD 1,200.00
New York (US) Bank Account (Remotely/In-person) – USD 2,000.00
Czech Republic Bank Account (Remotely) – USD 1,200.00
For Private Wealth Structures, we have further options available in large financial centers. Please contact us for more information.
*This accounts’ schedule of fees are for trading, service and holding companies whose activities are not regulated and are considered low-risk by financial industry standards. If you conduct regulated activities such as financial services or gaming, or you operate in a high-risk industry such as cryptocurrencies, precious metals, adult, dating. Please also contact us for more information relating to these industries.
**Offshore Bank Accounts: Belize, Puerto Rico, Nevis, Antigua, Saint Lucia. Other bank account options may be available depending on business profile and turnover.
Our Bank Account Opening Support Service includes:
Introduction to the Bank Manager
Bank Account Opening Process Management
Assistance and advice in filling out Business Questionnaires, KYC Forms and Bank Account Application Forms.
Certified Copies of Constitutional Documents
Corporate Seal
Introductions to Payment Processing and Merchant Account Providers
Our banking service is not just a mere introduction to the bank. We assist you in filling out the business plan forms appropriately and help you understand and provide business details, commercial information and purpose/use of the bank account that a given bank wants to know in order to approve your account application.
Banks want certainty and clarity on how the account will be used. Everything must be watertight. We will work with you to make sure there is minimal ‘back and forth’ and a smooth account opening process
We include introductions to payment processors or merchant accounts with all of our bank account opening support services. Whether you just need standard credit card processing or specialized services for high-risk processing, we are happy to help you with introductions that can empower your business
Annual Fees – USD 3,900.00
Including:
Government Fees
Registered Agent Service Fees
Registered Office Fee
Annual Return Filing Fee
Directorship Services (Optional)
Local Professional Director (1 year) – USD 5,900.00 p.a.