The limited liability company (LLC) is a type of business entity incorporated according to the Isle of Man laws that has legal personality and capacity, separate from its founding members and registered agent.
Investors choose to open an LLC in the Isle of Man in 2024 because it is a form of business that can be fully foreign owned. This is one of the several types of companies that can e incorporated by foreign investors and it is governed by the Limited Liability Companies Act.
| Quick Facts | |
|---|---|
| LLC – main characteristics |
Suitable for all types of activities; |
|
Minimum share capital when you set up a LLC in Isle of Man |
No minimum share capital |
|
Minimum number of shareholders |
At least 1 |
| Minimum number of directors | At least 2 |
| Local director required in Isle of Man (Yes/No) |
No |
| Time frame for the incorporation (approx.) |
1-3 days |
| Corporate tax rate |
0% |
| Dividend tax rate |
0% |
| VAT |
Standard 20% rate; |
| Number of double taxation treaties (approx. ) | 11 |
| Annual meeting required (Yes/No) |
No |
| Additional licenses when you set up a LLC in Isle of Man |
Industry-specific ones (gambling, liquor, import/export, telecommunications, etc.) |
| Accounting and filing requirements |
There is no obligation to file annual financial statements in Isle of Man, however, it is mandatory to prepare and maintain yearly profit and loss statements, balance statements, and directors’ reports at the registered office. |
| Documents needed for opening a LLC in Isle of Man |
Article of Association, identity and address proof of company founders, etc. |
| Bank account required for non-residents in Isle of Man | Non-residents are required to open a bank account in the Isle of Man to open an LLC company |
The limited liability company is a business form that has several features, some of which we mention below:
- it is a legal entity: the corporation is distinct from the members, the registered agent or the manager.
- it has a distinct name: the name of the LLC is subject to certain guidelines and must be a unique one.
- it is managed by the members: the management can take place according to the proportion of the investment in the business or as described in the Articles of Association.
- it can be dissolved: the wound up or the dissolving of the company can take place when the members decide so or in the event of the death or retirement of some of the members, in some cases.
- it is subject to tax: the profits of the company are subject to the taxation laws applicable in the Isle of Man.
- it can be restricted: certain LLC may be subject to restrictions, as per the business sector in which they activate.
Setting up a company in the Isle of Man is a process that requires a few steps and this also applies to limited liability companies. First, the founders must draw up the Articles of Association and then they must commence the registration process by filling in the appropriate forms. Below, we talk more about the features of the limited liability company as well as list the main steps for registration.
Table of Contents
What are the characteristics of the Isle of Man LLC in 2024?
The limited liability company is a business structure that can be successfully used for many types of activities. It can be suitable to small or medium business alike as well as for larger corporations. The key benefits for investors who choose to open an LLC in the Isle of Man are listed below:
- Full foreign ownership: this is an important characteristic as foreign investors can be sure that they will own 100% of the LLC.
- Limited liability: as the name suggests, the members are only liable for the company’s debts up to the amount of capital they have invested in the company.
- Simple and fast registration: the Isle of Man company formation process is a quick one, including only a few steps and fees for registration.
- No corporate taxes: Isle of Man is known as a tax haven closely located to some of the most important EU economies; the LLC is not subject to taxes although some exemptions apply for banks or income from land and property in the country.
Opening an LLC in the Isle of Man in 2024 is subject to a number of fees, depending on how fast investors wish their company to be registered. The Isle of known for offering a very fast incorporation process and a new LLC can be registered within 2 hours or faster, using the “while you wait service”. For these two very fast registration options, founders will need to provide all the required incorporation documents, otherwise, the stated period for registration will not be observed.
Some of the fees for corporate registration that were in place at the time this article was written were the following:
- £100 for the regular incorporation that is usually processed within 48 hours following the receipt of the needed documents;
- £250 for the two-hour incorporation;
- £500 for the “while you wait” incorporation.
Please keep in mind that the fast and the very fast registration options depend not only on submitting a proper list of documents, and whether or not the name is truly available, but also on the hour at which the submission is made. For example, the fast option, the two-hour registration, is possible when the documents are submitted with the Registry Department before 2:30 PM on regular business days. The payment for the registration fee can be made by card, cash or cheque as no bank transfers are possible for this purpose. It should be noted that the registration fees may not be refunded in all cases, whether or not the company is registered within the specified time.
Our team is ready to assist foreign investors who cannot be present in the Isle of Man due to travel restrictions or otherwise.
What are the steps for LLC incorporation?
The LLC is a flexible business structure that can benefit from a fast incorporation process. Below, we describe the main steps for incorporating this type of legal entity:
- choose a company name: the name needs to be a unique one and in compliance with the ongoing regulations.
- choose a registered agent: the role of the agent is important in the incorporation of the company as he will handle part of the filings needed for the company.
- choose the registered office: this has to be at a location in the Isle of Man.
- prepare the documents: the Articles of Association set forth the scope and structure of the business.
- registration submission: once the documents are prepared, they can be submitted to the Companies Registry.
- post-registration: investors can now open a bank account and obtain any other licenses or make other registrations.
VAT registration in the Isle of Man in 2024 is mandatory only for those companies that have an annual turnover over a certain amount. However, voluntary registration is also an option. One of our agents who specialize in Isle of Man company formation can give you more details both about the general company formation steps for a LLC and about the taxation principles that apply in this case. The favorable taxation regime is one of the primary reasons why investors choose to base a company here.
A key step in the incorporation of the LLC is drawing up the Articles of Association, sometimes also referred to as the Articles of Organization. These are the constitutive documents for the company and will set forth not only the purpose of the business but also the manner in which it will be managed, along with many other details. Standardized forms can be used, however, there is no mandatory form to be used when drawing up the Articles. One of our agents who specialize in offshore company formation in the Isle of Man can help investors draw up the needed documentation. The information included in the articles is the following:
- the name and address of the company;
- the name and address of the company members and those of the registered agent who is based in the Isle of Man.
- the member’s initial contribution.
- the right to continue the business by the remaining members in case of death, retirement, resignation or other occurrences for another member.
- the internal regulation of the company’s affairs, any special management principles.
The Articles of Association are to be signed by the founding members of the company.
Once the Articles are drawn up and signed, the founders need to fill in a special form, as required by the Isle of Man Government. This will state the intended registered office, which needs to be located in the Isle of Man (this is a mandatory requirement). Along with the information about the office, the form also includes the details regarding the company’s registered agent who will consent his appointment in writing.
For the purpose of determining the registered office of the Isle of Man LLC, entrepreneurs who set up the company will fill in a special form which will not only include the intended address that will be used for this purpose, but also the contact details of the LLC’s registered agent (who will offer his consent for this purpose). The company’s registered office cannot be a post office box. The only exception to this rule is when the said post office box is in a building that can be clearly located.
Offshore company formation in the Isle of Man in 2024 is a simple process and one that can be assisted throughout its duration by our team of experts. Do you wish to open a company and obtain Isle of Man residency by investment? We can assist you.
Investors who are interested in Isle of Man company registration should know that appointing a registered agent is a mandatory step and this individual needs to have the necessary qualifications for the position. Among these, we can mention that he is required to be a legal practitioner, a member of the Chartered Institute of Management Accountants, a member of the Institute Chartered Secretaries and Administrators or a lawyer.
Our agents will help you verify the chosen company name, prepare the Articles of Association and gather the needed information about the company members and the nominee directors, should this be an option. We can also help you with special registered agent services.
Moving to the Isle of Man is an option for those who open an LLC here.
Additional information about companies in the Isle of Man
As previously stated, opening a company in the Isle of Man has a number of distinct advantages, one of the most important being the fact that there are no corporate taxes. Nonetheless, working with a team of accountants in the Isle of Man is advisable as companies here are required to submit the annual returns.
The annual return fees applicable to companies registered under the 1931 Act are the following:
- £380 when the annual return is filed on its due date;
- £480 for returns filed with 1 month to 3 months delay;
- £630 when the return is filed more than 3 months after its due date.
The fees for excepted companies are the following:
- £95 when the annual return is properly filed;
- £195 for delays between 1 month and 1 day and 3 months;
- £345 when the return is filed more than 3 months after its due date.
These fees were in place at the time this article was written. Please check with our company formation specialists for updated information if you need more details. The Government, through the Companies Registry, also imposes other fees for miscellaneous activities such as re-registering a 1931 company (£100), continuing a company (£100), inspecting a company file (£5) or requesting a certificate of good standing (£50 for the regular issue time and £100 when the certificate of good standing is issued within 3 hours).
Different other fees apply in case of foreign companies in the Isle of Man as well as in the case of foundations. If you are interested in issues regarding business forms other than the LLC, you can reach out to us.
Nonetheless, working with a team of accountants in the Isle of Man is advisable as companies here are required to submit the annual returns. Our team can also help you with special tax planning and advisory services. Your business is likely to be exempt from corporate taxes in the Isle of Man (depending on your industry), however, working with our local accountants will be useful for tax planning and optimization purposes.
When opening a limited liability company, an LLC, the chosen name can be a very important element of the overall business image. While the registered name does not need to be the same as the business name, in most cases investors will wish to keep it the same. The registered name, or the legal name of the company is the one that will be included in the company documents and the one for which investors will need to obtain approval for use. Moreover, it cannot be used if it is already registered for another company or if it is too similar to an already registered name. The business name is the name used for advertising, marketing, and the name that clients will use. When building a cohesive business image, it can be useful to keep the two names the same.
Some of the general rules for choosing a name for the LLC in the Isle of Man are the following:
- it cannot be identical or similar to a name that is already registered with the Registry in the Isle of Man;
- it is not sufficiently distinctive (even if it is descriptive for the said business);
- it is identical to that of a company that exists in another jurisdiction;
- it cannot contain words that indicate a royal connection or it implies that the company is involved in illegal activities; also, it cannot imply that the company has an association with a government body;
- it cannot be the same name used by a company in the Isle of Man that has been struck off the Registry or dissolved in the previous 5 years;
- it cannot contain restricted words or phrases such as “bank” or “building society”, among others.
According to the statistical data made available by the Isle of Man Government on the number of registered legal entities, the number of total companies on the register during 2023 fluctuated in the following manner:
- At the end of December 2023 there were 15,200 companies;
- At the end of September 2023 there were 15,162 companies;
- At the end of June 2023 there were 15,118 companies;
- At the end of March 2023 there were 15,043 companies;
The number of companies incorporated under the 2006 Act is lower, with 9,738 entities at the end of December 2023, 9,661 at the end of September 2023, 9,757 at the end of June 2023, and 9,790 companies at the end of March 2023.
With our aid, your LLC in the Isle of Man will be incorporated in the shortest amount of time possible. Please do not hesitate to contact us to find out more about how we can assist you.