Isle of Man is a preferred business location for investors because of its geographical location in Europe, the trading facilities it has with the European Union, but also because it can be used as an offshore jurisdiction.
The main law providing for the opening of companies in Isle of Man is the Companies Act 2006 which provides for several types of structures available for foreign investors. These can also benefit from various advantages, one of the most important being the beneficial ownership. This aspect is regulated by the Beneficial Ownership Law which covers aspects like nominee shareholders and directors in Isle of Man.
The Law was developed in response to the needs of the international investors but also in line with the government and certain principles of disclosure and transparency. According to the Act, a beneficial owner is an individual who control a legal entity through direct or indirect share ownership and voting rights (the control can be a partial or a complete one). When a beneficial owner holds more than 25% of the beneficial ownership in a legal entity, he is to apply as a registrable beneficial owner and his details are included in the Database of Beneficial Ownership. The nominated officer of the company can handle this step. When there are no registrable beneficial owners, the nominated officer is still required to update this fact each year.
Our company formation agents in Isle of Man can offer more information on the appointment of nominee shareholders and directors.
We can also provide details to investors who wish to know more about obtaining Isle of Man citizenship by investment.
Table of Contents
Nominee shareholders are employed by foreign owners of Isle of Man companies under the privilege of beneficial or better said private ownership. Nominee shareholders will act as trustees of the real owners of a local company. The appointment of a beneficial shareholder is a legal process and it is a personal choice made by the investor. It may have to do with a desire to increase confidentiality or simply to keep some of his investments out of the publicly available information (or, more specifically, choosing what others know about certain investment decisions).
According to the Beneficial Ownership Act, a company to which this act applies is required to appoint a nominated officer. An exemption applies when the entity received corporate services included in Class 4 regulated activities. One of our Isle of Man company formation agents can give you more details. The nominated individual needs to be a resident in the Isle of Man and they are to receive all of the needed information about the beneficial owners of the shares (the information is disclosed by the legal company owners). The information typically offered to the nominated officer include the name, address (residential and services), nationality, birthdate, the date when he acquired the shares in the legal entity (including the number and types of owned shares). Moreover, the nominated officer is to be announced of any changes to this information within one month from the date of the change. Complying with these requirements is important for company owners as any failure thereof will be interpreted as an offence under the Act on Beneficial Ownership.
It is quite common to use both nominee shareholders and directors in Isle of Man. Our company registration advisors in Isle of Man can help foreign investors open companies here. We also offer nominee services related to directorship and shareholding.
Nominee shareholder services can be provided by natural persons or licensed companies in Isle of Man. Most of the times, foreign investors choose the nominee services of specialized companies which are recognized by the authorities.
The main advantages of nominee shareholders in Isle of Man are:
a high degree of privacy is ensured.
The only requirement of the authorities in the case of nominee shareholders is that these are residents in the Isle of Man.
Some of the issues to consider when appointing nominee shareholders include the following:
The nominee shareholder services can be complementary in some situations and many investors will often use them in conjunction with nominee director services (to which the same principles of using a third-party director apply).
Drawing up the nominee declaration or the nominee agreement is an important step for all those investors who choose to work in this manner. This is a document that proves the relationship between the beneficial owner and the nominee that states that the beneficial owner is the only one who holds the ultimate rights on the shares. This is a simple document that is often no longer than one page and it is sometimes referred to as a declaration of trust. It highlights the duties and responsibilities of the nominee, his fiduciary duty and clearly specifies that he may not act without the direct indications from the beneficial owner.
Moving to the Isle of Man as a shareholder is a process that can be assisted by our team.
If you would like to receive additional services, such as those offered by our accountants in Isle of Man, please do not hesitate to reach out to us. We are a full-service firm that offers complex solutions that meet the needs of local and foreign investors alike. The Isle of Man’s tax advantages and the minimum financial compliance requirements can be fully explained by our team.
Our team of agents who specialize in offshore company formation in the Isle of Man can give you more details about the role and the duties of the nominated officer and the disclosure requirements for the registrable beneficial owners. You can rely on our agents for advice on how to open a bank account in Isle of Man.
For more information on the advantages of nominee shareholders in Isle of Man, please contact us. We remind you that you can rely our Isle of Man company formation agents for company registration and nominee services.