There are many reasons why investors should choose to set up an offshore company in the Isle of Man, most importantly the fact that there are no taxes on profits.
Offshore company formation in the Isle of Man can be an excellent solution for trading or for maintaining various investment portfolios.
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The Isle of Man company formation process is a simple one and it can be expedited with the help of our company formation agents. We can help you gather and draw up the needed company documents and submit them for registration.
The steps for opening an offshore company are generally the following ones:
The following list describes the several most important conditions for company registration in the Isle of Man:
| Quick Facts | |
|---|---|
| Types of companies available for incorporation | The 2006 Act Company The Limited Liability Company The 1932 Company |
| Minimum share capital | Not in all cases; for 1931 companies the usual authorized capital is £2,000, into shares of £1 |
| Minimum number of shareholders | 1 in most cases (two are required for some types of public companies) |
| Beneficial ownership | regulated through the Beneficial Ownership Act 2021; disclosure requirements are in place |
| Time frame for the incorporation (approx.) | 48 hours for the standard incorporation fast-track incorporation is available, in 2 hours |
| Corporate tax rate | 0% rate for resident companies |
| Dividend tax rate | 0% |
| VAT Rate | 20% standard rate 5% and 0% reduced rates |
| Do you supply a Registered Address? (YES/NO) | Yes |
| Local Director Required (Yes/no) | No, however, a registered agent is mandatory |
| Annual Meeting Required | Not necessarily; applicable in case of 1931 Act Companies |
| Is Accounting/Annual Return Required? | Yes |
| Any Tax incentives (if applicable) | N/A |
Apart from the conditions mentioned above, there are a number of key costs for offshore company formation in the Isle of Man:
Companies in the Isle of Man are required to have a unique name and it can be verified via the online portal provided by the Isle of Man Government. The name availability is also checked if an investor wishes to change the name of an existing company. There are a set of conditions for choosing the corporate name and they refer to originality as well as the description of the business activity or the inclusion of certain words. Names that may be refused are the ones that:
This list of situations in which the names can be refused is not an exhaustive one. The authorities have complied a document, the Company and Business Names Regulations 2013 that can be detailed further by our team of Isle of Man company formation agents.
The video below is a presentation of the requirements for opening an offshore company in the Isle of Man:
The annual return is a mandatory document that is filed by all companies within one month after its incorporation date. The requirement to file takes place even when the company is not trading. The fees for the submission vary according to the type of company:
The registration is considered complete once the authorities have checked it. If a document is rejected, and the submission is thus not possible on time, the penalty will apply.
Failure to file the annual return can result in the prosecution of the company or, in some cases, in it being struck off the register. We advise investors to reach out to our Isle of Man company registration agents if they have questions about the filing fees, the filing process or any other issues.
Apart from these annual returns, a company must also file the annual declaration which confirms the fact that it will continue trading and there have been no changes to its particulars. There is no registration fee in this case and the annual deadline for filing is the date on which the name of the company was registered.
Investors who open an offshore company will enjoy tax neutrality and, along with this, the fact that companies do not need to file their financial statements. A requirement does exist for companies to keep and prepare accurate and sufficient accounting records. A CPA in the Isle of Man from our team can give you more details about all the applicable accounting requirements. If you are interested in starting a business in another country, such as Malta, we can put you in touch with our local partners.
Investors who are interested in offshore company formation in the Isle of Man should know that the information on the company directors and shareholders is publicly available, however, the details of the beneficial owner are not included in the public record, just as the financial accounts. This means that a nominated officer can be appointed and indeed many investors will choose this option. A condition is for this person to be a natural person who resides in the Isle of Man or a legal entity that provides services included in Class 4 regulated activities.
When a nominee is used for setting up a company in the Isle of Man, the law stipulates that this appointed individual will receive details regarding the beneficial owner. The nominee will receive information about the beneficial owner’s personal details (name, address, nationality, the nature and the extent of the interest in the legal entity and other information) and must be notified when any changes occur to these details. When a beneficial owner holds more than 25% of a legal entity, he is included in the Isle of Man Database of Beneficial Ownership and updated as needed. The Act that sets forth these provisions applies to some types of legal entities.
The same Beneficial Ownership Act provides details regarding the duties of the nominated officer as to the manner in which the information will be submitted. As a general rule, the nominated officer is to submit the information concerning the beneficial owners (when applicable) by the date on which the annual return of the company for the following year is due. Any other changes regarding the company’s officers shall be submitted within one calendar month after the nominated officer was made aware of the respective changes. When the company has no registrable beneficial owners, the nominated officer is still required to submit a statement once a year in which he indicates that there are no beneficial owners to be registered. Compliance with the beneficial ownership Act is mandatory.
Any changes to the company particulars are to be duly notified to the authorities. This is the responsibility of the company’s agent (the one who is entrusted with updating the company’s documents). In most cases, changes need to ne notified through a proper form within one month of the change. Some of the common changes include the following:
When a business name in the Isle of Man ceases trading, the Companies Registry needs to be notified within three months through a special form that is signed by the relevant parties (the sole trader or the partners/founders).
Penalties apply for failure to submit the needed forms in all the aforementioned cases. There are two levels of penalties, one for delays of one month and one day to three months and the second level of delay for more than three months. Any document submission for a change in company details is taken into consideration only after the documents have been verified and are deemed to be complete and consistent with the proposed change. If a document is rejected, the applicant may become subject to the aforementioned late fees. Our team can help you with complete information about the changes that need to be notified and can assist you in lodging the changes as soon as possible, once they take place, so that you can avoid these penalties.
The Isle of Man is an international business centre known for its pro-business policies and for welcoming foreign investors in a variety of sectors. The local business ecosystem is a thriving one and some of the most important industries include engineering, retail, real estate, logistics, hospitality and cleantech, among others. Apart from these, investors who open an offshore company provide different types of business services to their international clients.
A stable government, a simple tax regime, good infrastructure, and financial support for certain types of companies are some of the main reasons why investors choose to open a company here.
Many entrepreneurs had chosen to set up an offshore company in the Isle of Man and trade with UK companies. The conditions for international trade changed when the UK ceased to be a member of the EU and are now governed by the UK-EU Trade and Co-operation Agreement which governs how trade in goods is made across the UK-EU border. The manner in which digital and financial services are provided have not changed in the same manner, however, we do encourage investors who are interested in knowing more about the transition to reach out to us if they need clarifications for the business field in which they activate. Some issues with which we can assist include cross-border trade, indirect taxation (VAT), product regulations, intellectual property rights, employment and other issues.
For more information about setting up a company in the Isle of Man, we invite you to contact us.