Company formation in the Isle of Man

Company formation in the Isle of Man

The Isle of Man is a dependent territory under the British Crown. It is not part of the European Union and the European Economic Area, but trades with EU countries in accordance with Union rules regarding customs duties, excises and VAT.

Therefore, the creation of a company in Douglas or any other city in the Isle of Man allows you to access the benefits of the internal European market. Thanks to progressive legislation, the jurisdiction has a positive reputation.

The choice of the Isle Of Man Company Formation will allow the entrepreneur to engage in various activities, including owning real estate and managing assets. Due to the presence of agreements on the exchange of information and on the avoidance of double taxation, the jurisdiction is whitelisted by the OECD.

Benefits of registering a company

  • the possibility of duty-free trade with the UK and EU countries;
  • good reputation of the jurisdiction;
  • no direct taxation of most companies on the Isle of Man;
  • the possibility of creating a company with 1 shareholder and any size of the authorized capital;
  • availability of qualified specialists;
  • low tax rates;
  • English speaking environment.
  • Main forms of legal presence and doing business
  • limited liability company;
  • limited liability partnership;
  • foreign companies;
  • fund;
  • trust.

Most foreign entrepreneurs choose a limited liability company to open a company on the Isle of Man. This legal form provides shareholders with maximum flexibility in choosing the area of business and limits financial risks. Other types of companies may also be considered for certain types of activities.

Registration procedure

  • select and reserve a company name through the Companies Registry;
  • register a company on the Isle of Man;
  • open a corporate bank account;
  • obtain the necessary permits and licenses.

Legislation and regulatory environment

Isle of Man companies may be formed and regulated under two separate laws:

Companies Act 1931 (more commonly used to create local businesses). Assumes the involvement of two directors, who may be non-residents, but does not require a government-licensed agent. In addition, a company secretary is required, who can act as a director and be a non-resident. Firms must hold annual meetings as well as prepare annual financial statements;

Companies Act 2006 – allows you to create a company with 1 director, who can be a legal entity, but involving a licensed agent. There is no requirement for annual meetings or annual financial statements.

To open a company on the Isle of Man, it is necessary to have a local registered office.

The Companies Act allows the redomiciliation of an existing legal entity from another jurisdiction that permits such a relocation. In this case, the firm continues to exist, retaining assets and liabilities. Once relocated, the  activities will be governed by the laws of the Isle of Man. Look here if you don’t know, how to find company registration number.

You may also like: The Ins and Outs of Insolvency: What You Need to Know

The beneficial ownership law requires investors holding more than 25% of a company’s shares to provide the necessary data to the Registrar for storage in the Isle of Man’s beneficial owners database.

There is also no inheritance tax on the island, which makes registering a company a tax-efficient way to own property.

All companies are required to file tax returns for the reporting period, regardless of the rate at which they are taxed. Isle of Man resident firms are taxed on their worldwide income. Non-resident companies operating on the island pay taxes only on income received on its territory.

Doing business on the Isle of Man allows a foreign entrepreneur to take advantage of the many economic benefits of a legal presence in the European Union. At the same time, the British Isles have a comfortable fiscal regime. Registration of a company on the Isle of Man can be used to optimize the tax burden, own investment portfolios, real estate and other assets.