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The Isle of Man is world-renowned for its client commitment and quality service

Time zone: GMT

Location: The Isle of Man is located in the centre of the Irish Sea equi-distant from England, Ireland and Scotland.

Govermnent contacts: International Services Development Division The Treasury, Meghraj Centre 1-4 Goldie Terrace Douglas, Isle of Man, IMI 1 PG
Tel: +44 (0) 1624 671737 Fax: +44 (0) 1624 615038

Web site: http://wwwgovim
E-mail:int-serv-dev@gov.im

Financial Supervision Commission PO Box 58 1-4 Goldie Terrace Douglas, Isle of Man, IM IPG
Tel: +44 (0) 1624 624487 Fax: +44 (0) 1624 629342

Insurance and Pensions Authority
Ridgeway Street
Douglas. Isle of Man, IM1 IER
Tel: +44 (0) 1624 646000 Fax: +44 (0)1624 646001

The Isle of Man has made great progress in recent years in gaining international recog- nition as a centre of excellence and maturity in financial services.

Along with the space and tightly regulated - but flexible - systems, the overriding attractions of the Isle of Man are sound legal and regulatory systems, wide professional and commercial expertise and good political stability.

Investment linked life assurance, captive insurance, fund management, trust and company administration and shipping management companies have all seen growth in their businesses operating throughout the Isle of Man.

To support this growth banking, legal, accounting and other professional services have improved the quality of the infrastructure available on the Isle.

These professional support services offer a high level of quality service and commitment to clients for which the Isle is rapidly becoming renowned.

Its image as the jurisdiction for professionals has been enhanced by sophisti- cated international business attracted by the versatility and effectiveness of vehicles such as the professional investor funds (PIFs), limited liability companies (LLCS) and purpose trusts.

Two main attractions for businesses requiring a real presence offshore are the Isle's relatively low operating costs and room for expansion. Factors such as availability of low-cost office accommodation and a well educated pool of labour, which can be drawn from outside if necessary, are of increasing importance to those major corporations who are seeking an offshore base.

Taxes

Non-residents are only taxed on local source income. There are no death or estate duties, capital transfer or gift taxes,

The Isle of Man is a low tax area with a standard rate of income tax of 15 % for residents and a higher rate of 20%. Being present on the Isle for six months in any tax year will make a person resident. Regular visits may also create a residence situation. Other than a limited tax treaty with the UK, the Isle of Man does not have any double taxation treaties.

loM companies

Isle of Man companies can take a variety of forms, including:

The minimum number of directors for all companies is two, and they must be indi-viduals. There is no restriction regarding nationality of directors, although at least one director of an Exempt or International Company must be a Man resident.

The names and addresses of the directors are lodged with the Registrar of Companies and are available to the general public. A company secretary may be an indi- vidual or a corporation, but the secretary of an Exempt or International Company must be suitably qualified. Isle of Man companies are generally permitted to issue bearer shares, but this is not permissible for Exempt and International companies. Disclosure of ultimate beneficial ownership is not required and nominee holdings are permissible. Ready-made "shelf " companies are available for immediate use.

Exempt companies

An Exempt Company may be resident on the island, therefore making it exempt from Man taxation on offshore income and dividends upon the lodging of an application for exempt status and pay- ment of an annual fee to the Registrar of Companies. The company must apply yearly for the tax exemption.

In addition to the tax exemption on profits from abroad, an advantage of an Exempt Company is that it may be resident on the isle and therefore it is easier to demonstrate its tax residence.

These tax-exempt companies are managed from the island but must carry on business elsewhere and are limited to certain types of businesses.

An Exempt Company must have at least two directors, one of which must be a Man resident, and the required resident company secretary must be suitably qualified, a solicitor or accountant for example.

InternationalCompanies

The status of an Interna- tional Company (IC) is that of a resident company for tax purposes which can be private or public and is subject to an income tax charge.

The Man IC is similar to the Exempt Company except that legislation provides for a flexible rate of taxation charged according to the specific requirements of the IC. This can range on a sliding scale from a minimum rate of I % to a maximum of 35 % of assessable profits.

The basis of assessment for arriving at the income tax chargeable can be negotiated to suit the company requirements.

No person who is resident in the Isle of Man is per- mitted to have a beneficial interest in a private IC, however public companies are permitted to have a small local shareholding of up to 5% without putting their IC status in jeopardy.

Non-resident companies

Non-resident companies are tax exempt on profits from abroad. Each year non-resident companies must file a non-resident declaration with the registrar of Companies and pay a non-resident duty.

The central management d control of these companies must be exercised from a foreign location.

Resident companies

Resident companies are used primarily for local business on the Isle of Man and are subject to income taxation rates of up to 20 %.

Political status

The Isle of Man is not a member of the European Community, but enjoys a special relationship with the EC as set out in Protocol 3 to the UK's Treaty of Accession, which allows free trade in industrial and agricultural products with the EC. The Isle is not part of the 1992 Single Market program and, as a fiscally independent country, will not be subject to any harmonization of taxes within the EC.

Investor protection

The Isle of Man has no scheme for investor's com- pensation. If an investor has a complaint then, depending on the type of problem, they should send a letter to the appropriate regulatory body, the Department of Consumer Affairs and the Courts.

Michael Gates is head of the lnternational Services Development Division, The Isle of Man Government.