Investors can open a foundation in the Isle of Man by following the guidelines set forth in the Foundations Act. The main uses of a foundation target family and estate planning but these structures can also be used for charitable purposes. Our Isle of Man company formation agents can help you open a foundation and handle all of the registration requirements.
| Quick Facts | |
|---|---|
| Who can open a foundation in Isle of Man | Individuals and legal entities, both local and foreign. |
Foundation types | – charitable, – non-charitable |
Purposes of opening a foundation | – wealth planning, – asset protection, – tax planning, – philanthropy, – succession planning, etc. |
| Authority overseeing foundations | Isle of Man Registrar of Foundations |
| Process of setting up a foundation | – appoint a registered agent, – draft the foundation instrument and rules, – submit application to the Registrar, – establish a foundation council |
| Appealing decision of registration | If the Registrar declines to register a foundation, the decision can be appealed to the High Court in the Isle of Man. |
| Foundation Instrument – characteristics | – serves as the constitutional document, – must be written in English, – is publicly available, – must define the foundation objective, – council members must be specified, etc. |
| Foundation Rules – characteristics | – are not publicly available, – can be in a language other than English, – specify how beneficiaries can be changed, – outline council functions, etc. |
| Initial allocation of assets | No requirement for an initial dedication of assets. |
| Foundation name | Must end with the word “foundation” and respect the Registrar’s guidelines. |
| Taxation | 0%, except for the 10% tax for income from Manx land and property. Our accountants can provide more details. |
| Required registered agent (YES/NO) | YES |
| Can sign contracts (YES/NO) | YES |
| Advantages of opening a foundation in Isle of Man | – tax-free regime, – confidentiality, – easy registration process, – structure flexibility, – no initial distribution of assets required, – lower costs compared to opening a company, etc. |
| Assistance | Our team can serve as the registered agent and also help in drafting the foundation documents. We also offer support in company formation, if you are interested. |
Table of Contents
What are the services offered when starting a foundation in the Isle of Man?
We offer comprehensive services to our clients who wish to establish a foundation in the Isle of Man, as follows:
- Advice on the suitability of an Isle of Man foundation for the client’s purposes;
- Helping in selecting the structure, objects and governance of the foundation;
- Making preparations for and filing the registration application for the foundation;
- Helping in drafting the foundation instrument and the foundation rules;
- Supplying or arranging registered agent services;
- Helping in appointing and preparing council members and, when required, enforcer of the foundation;
- Helping in preparation of the identification and due diligence documentation required for registration;
- Helping in fulfilling Registry requirements such as annual return; and
- Helping in making changes to the foundation’s registered documentation and governance documentation.
Which are the uses of a foundation in the Isle of Man?
The foundation can be seen as an alternative to opening a trust in the Isle of Man and it is a suitable choice for individuals who wish to benefit from largely the same asset protection services without entering into a trustee relationship. As such, foundations in the Isle of Man may be used for the same purposes as trusts. These include:
- wealth planning for families and succession;
- business succession planning;
- personal assets protection;
- tax reduction;
- philanthropy.
We also invite you to watch a short video on the topic of foundation creation:
Is it possible for a foundation to operate commercially on the Isle of Man?
No. This means that a foundation can serve as a good vehicle for managing and holding any property related to its objects, but it must not be regarded as a regular business undertaking. When creating a foundation, one needs to take into account the following:
- Type of property which is to be managed;
- Proposed operations of a foundation;
- Incidental commercial activity in relation to objects of the foundation;
- Possibility of using some other Isle of Man vehicle to conduct business operations.
What are the benefits of establishing a foundation in the Isle of Man?
There are plenty of benefits to opening a foundation in the Isle of Man, which also includes the taxation system. Unlike some jurisdictions, a foundation in the Isle of Man allows for the exclusion of forced heirship rules, providing greater flexibility in estate planning and wealth distribution. Beneficiaries can be named at the establishment of the foundation or at a later date. There is also no requirement to transfer assets into the foundation at the time of establishment.
What information is publicly available regarding the Isle of Man foundation?
Despite having provisions in the rules related to the management and beneficiaries, there is some information that is available in the Public Register of Foundations. The Registrar maintains:
- Name and address of the foundation;
- Objects;
- Names and residential addresses of the council members;
- Name and address of the registered agent;
- Registration number of the foundation.
What are the Foundation Rules in the Isle of Man?
The Foundation Rules in the Isle of Man are governing documents that outline how the foundation operates, its objectives or purposes, its structure, the roles and responsibilities of its members, and other important provisions regarding its administration and management. These rules are mandatory and are established at the moment when you open a foundation in Isle of Man.
The foundation rules can be written in a language other than English. However, if this is the case, a translation of the rules must be provided to the registered agent. If the foundation is intended for the benefit of a specific person or group, the rules will provide for how these beneficiaries can be changed or updated over time.
What will be the cost of creating a foundation in the Isle of Man?
The government fees for starting a foundation in the Isle of Man include:
- £100 for normal establishment within 48 hours;
- £250 for establishment within 2 hours;
- £500 for the same-day establishment service.
For more information on setting up a foundation in the Isle of Man or for more details about foundations and trusts, please do not hesitate to contact us.