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Isle of Man Company Formation

Isle of Man Company Formation

The Isle of Man is a unique territory with a stable economy and favorable conditions for investors and corporations. Isle of Man Company Formation is an advantage for further expansion of business activities in the EU zone and establishing business ties with the UK. Fast Offshore Licenses specializes in providing professional assistance with company incorporation in this jurisdiction.

The Isle of Man has certain legal peculiarities – it is not part of the UK or the EU, it has its own legislative and tax system, one of the oldest parliaments in the world, and the UK is in charge of foreign policy and defense.

Isle of Man Company Registration provides many advantages for doing business, as the island has signed customs treaties with the UK and the export of goods to the EU passes through the internal rules of this zone (without customs duties).

Most often choose this jurisdiction for opening a trading company and expanding activities. In addition, this island is interesting for those engaged in gambling activities, but before that, it is worth obtaining a license from the Gambling Supervisory Commission GSC. Financial and insurance companies must have a license from the Isle of Man Financial Services Authority FSA.

The main regulatory documents that specify company formation requirements are The Companies Act 1931 and the Companies Act 2006. The jurisdiction values its reputation and therefore has strict FATF regulations, complies with EU directives (AML/KYC) about illegal enrichment, and has adopted the Income Tax (Substance Requirements) Order 2018 to combat non-payment of tax by companies.

Advantages of Company Registration in the Isle of Man

Cost optimization.
The jurisdiction is attractive with its tax system, which lacks such key levies as corporate tax, capital gains tax, and stamp duty.

Development of business connections.
IT and financial services are well developed, businesses are provided with all technical and infrastructural conditions. Many companies seek to incorporate in the Isle of Man because of the opportunity to expand into the EU zone and the UK on favorable terms.

Support for innovative business.
The government supports the development of innovative technologies, blockchain and cryptocurrency, gambling industry. It creates incubators and gives grants to start-up entrepreneurs, there is a program of support for gambling entrepreneurs.

Quick registration.
The jurisdiction requires AML/KYC procedures, respectively the provision of all identifying documents, but when submitting a full package of documents, the registration of the company takes several days (48 hours) online.

Requirements for opening a formation in the Isle of Man

Minimum requirements for the organizational structure.
The company must have at least one manager and one owner (also depends on the type of company), a secretary is not required.

Business name.
The requirements include uniqueness, no indication of state bodies, and at the end of the name abbreviations: Ltd, PLC, Inc.

Legal address.
The company, when applying for registration, indicates its registered office in this area, in addition, in this room must be stored all the financial documents of the company (minutes of the meeting, register of owners, founding documents) and there will be official notifications.

Financial report.
Even if the company has not been operating, it is obliged to file an accounting and tax return for the year. The recommended initial capital is GBP 2000 (but not required).

Have an agent (resident).
Isle of Man company formation costs include the fact that companies must renew their registration with the agent and the Regulator annually. According to the Companies Act 2006 – a licensed agent is required when registering a company.

Process for Opening a Company in the Isle of Man

The process of registration in this zone is fast up to 2 days and requires several steps:

Selecting the type of company to be registered

When registering a company in the Isle of Man there are various company types to choose from: LP, LLC, NMV, PLC, and hybrid type. Before choosing the type of company you should familiarize yourself with the requirements, there are differences in the number of directors required, secretary, filing of accounts, and share capital.

Name

When choosing a suitable name for the business, you need to consider the legal restrictions, viz:

Ltd, PLC, Inc. (as per the type chosen) should be at the end.
Do not repeat existing ones.
Only if you have a license, you can include the words “insurance”, “bank”, etc. in the name.
Pay the fee according to the data on the Registrar’s website.

Preparing the information

Before submitting your application, you need to check that you have all the documents:

memorandum, articles of association;
passport and proof of residence of the director/manager and owner/shareholder;
an order appointing the director;
confirmation of the legal address;
business plan.

The Regulatory Act – Companies Act 2006 specifies the peculiarities of the package of documents according to the chosen type of company.

Submission of application to the Registrar

The application is submitted online via the website, and the registration fee depends on the term of registration from GBP 100 to GBP 500.

License

Some activities like gambling, and financial and insurance services require a license.

Corporate Account

Among the requirements for some types of structures is the presence of a bank account on the island. An account can only be opened by a company registered on the island and only with proof of registration from the Tax Office.

Taxes

After receiving the certificate of incorporation, the company needs to register with the Tax Office.

Documents required to register company in Isle of Man

Under the Companies Act 2006, The Companies Acts 1931 the basic list of documents required includes:

application for registration;
proof of payment of the state duty;
certificate of reservation of name;
Memorandum, Articles of Association, if registering a partnership – Partnership Agreement;
passport data of directors and founders with proof of residence;
order on appointment of a manager/director;
minutes of the shareholders’ meeting;
proof of the company’s address in the jurisdiction;
a business plan with a description of future activities.

Types of companies in Isle of Man

Based on the Companies Act 2006, The Companies Acts 1931 investors who decide to start a business on the island can choose from the following legal forms:

Closed Joint Stock Company PLC:

The company must be managed by two directors (no residency requirements), one shareholder, and a secretary.
There are no initial capital requirements, but it is recommended to deposit GBP 2000.
An annual audit is required.
There is no tax on income earned outside the jurisdiction.

Limited Liability Company (LLC)

No start-up capital requirements.
One manager, and two owners.
A financial statement is required with records kept at the local office.
For trusts, banks, and insurance companies, a license is a prerequisite.

Limited Partnership (LP):

No initial capital, reporting filing requirements.
Number of partners from 1 to 20.
No taxation when operating off-island and not a resident.

New Manx Vehicle (NMV):

Business must be run by one director.
It is mandatory to file a financial statement and pass an audit.
A minimum of two managing directors and one secretary are employed.
One shareholder.
Filing of accounts and auditing is required.

Isle of Man Companies Legislation

Legislative acts related to registration, operation, obtaining a license, and payment of taxes are indicated on the official website of the government and the Prosecutor General’s Office.

The key legislative acts include:

– The Companies Acts 1931 and the Companies Act 2006, where the types of companies, requirements for their structure, and registration are specified.

– Income Tax (Substance Requirements) Order 2018 regulating taxation in this jurisdiction.

– Electronic Transactions (General) (Amendment) (No.2) Regulations 2020 – rules for conducting transactions by companies.

– Company and Business Names (Restricted Words and Phrases) Regulations 2013 regulates the structure of a company name.

Taxation in Isle of Man

The Isle of Man is attractive for its tax charges, which include:

0% corporation tax;
No tax on gains, stamp duty;
20% VAT;
20% on income derived from the management of real estate on the island;
10% corporate tax for businesses with a banking license and income over GBP 500k.

Country Information: Isle of Man

Square	572 sq km
Population	85,000
Capital	Douglas
Unemployment Rate	2.0%
State Polity	Parliamentary democracy and constitutional monarchy
Telephone Code	+44
Corruption Rank	21
Location	British Isles, located in the Irish Sea
Climate	Temperate maritime climate; average temperatures between 5°C to 15°C (41°F to 59°F); mild winters and cool summers
Literacy Rate	99.0%
Ethnic Groups	Predominantly British and Manx
National Currency	Pound Sterling (GBP)
USD Exchange Rate	1 USD = 0.77 GBP
GDP per Capita	48,000 USD
Official Language	English
Credit Rating	A
Judiciary	High Court of Justice, Court of Appeal
Executive Authority	Chief Minister, Council of Ministers
Legislative Authorities	Bicameral Tynwald

Corporate Information

Purchase Ready-Made Companies Available	Yes
Legal System	Based on English Common Law
Use of Cyrillic Alphabet in Company Name	No
Local Registered Office Required	Yes
Organizational and Legal Forms	Private Limited Company, Public Limited Company, Limited Liability Company
BPA in Company Name	Limited (Ltd.)
Local Registered Agent Required	Yes

Shares and Share Capital

Standard Currency for Shares	GBP/USD
Beneficiary Information Disclosed	No
Minimum Issued Capital	GBP 1
Bearer Shares Allowed	No
Authorized Capital Size	GBP 1,000
Terms of Capital Payment	No restrictions
Nominal Value of Shares	GBP 1
Possibility to Issue Shares without Par Value	Yes

Taxation

VAT	20%
Basic Corporate Tax Rate	0% for most businesses; 10% for banking and retail
Capital Gains Tax	No
Currency Control	No
Corporate Tax Rate Details	No capital gains tax or inheritance tax
Stamp Duty	Yes

Director and Secretary

Minimum Number of Directors	1
Residency Requirement for Directors	No
Director Legal Entities Allowed	Yes
Information Disclosed to Local Agent	Yes
Information Disclosed in Public Registry	Yes
Secretary Required	Yes
Residency Requirement for Secretary	No
Qualification Requirement for Secretary	No
Legal Entity as Secretary	Yes

Shareholder and Beneficiary

Minimum Number of Shareholders	1
Data Entered in Public Registry	No
Residency Requirement for Shareholders	No
Beneficiary Information Disclosed	No
Beneficiary Info Disclosed to Local Agent	No
Legal Entities as Shareholders Allowed	Yes

Reporting

Filing of Reports Required	No
Open Access to Reports	No
Statutory Audit Requirement	No
Filing of Annual Return Required	Yes
Open Access to Annual Return	No
Reporting Requirements	No

Trademark Registration

TM Comprehensive Study Fee	GBP 150
TM Registration Request Fee	GBP 300
TM Registration Certificate Fee	GBP 350
Additional Class Registration Fee	GBP 250

FAQ about a Company formation in the Isle of Man

How do I set up a company in the Isle of Man?

Company incorporation can be accomplished in a matter of days or even hours when all documentation and fees are submitted.

How much does it cost to set up a company in the Isle of Man?

The cost to set up a company depends on the type of company to be registered, the amount of the fee can be found on the Registrar’s website.

How long does it take to register a company in the Isle of Man?

Standard company registration takes two days, but if you pay a higher fee, it can take as little as 2 hours to register your business.

Why do companies set up in the Isle of Man?

This jurisdiction is interesting for businesses because of its many advantages, including minimal tax charges, the possibility of trading with the EU without paying customs duties, the legalization of gambling activities, and the use of cryptocurrencies.

What are the requirements for the Isle of Man company?

Based on the local legislation, The Companies Acts 1931 and the Companies Act 2006, the requirements for companies vary depending on the type of company, but among the main ones are: identification of managers and owners, mandatory registered office on the island, and a licensed agent.