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Isle of Man

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Prestigious jurisdiction, suitable especially for those who need a VAT number to trade within the EU. Here it is possible to open bank accounts, to provide the Nominee with a service to sign the bank form to open the account, for complete privacy protection. As far as taxes and duties are concerned, the Isle of Man is in a state of so-called „common purse“ with the United Kingdom. The basic VAT rate is therefore in line with the UK rate of 17.5 %. The income tax rate applicable to the Isle of Man for a company not carrying on banking and real estate business here is 0 %.

Basic information about the Isle of Man

  • The Isle of Man lies between England, Scotland, Ireland and Wales and is a dependent territory of the British Crown.
  • It is only 572 square kilometers and its population is 85 thousand people.
  • The island is an integral part of the Kingdom of Great Britain and Northern Ireland, but only as a self-governing area under the British Crown.
  • The island is headed by the British Queen, represented by the local governor.
  • GDP is dominated by the offshore sector and tourism.
  • For a long time, the island was out of favor with many developed countries due to its tax laws.

Incorporating a company and doing business in the Isle of Man

The Isle of Man has become one of the most popular tax havens in recent years. It is currently home to many online casinos and bookmakers. It is also a popular destination for film crews who take advantage of tax breaks. You can join them. A company incorporated in the Isle of Man offers a good opportunity for tax optimization while the actual business activities take place outside the territory of the island.

The basic corporate income tax rate is 0%, but in some cases it can rise to 10%. No capital gains taxes, no stamp duty, no inheritance tax, no withholding tax. Exemption from double taxation is available to foreign entities. It sounds like the magic word ‚none‘ is the most popular word on the Isle of Man. But for you, it means that it is one of the most attractive jurisdictions in the world.

The island offers its good reputation and a legal system based on English law, so you don't have to get used to any exotic law.

The actual payment of dividends is exempt from withholding tax on the island. That sounds like heavenly music!
As for paperwork – something is required, but to a minimal extent. A report on annual returns is required, for example. Accounting must be kept at the address of the company's regis­tered office, but the company is not subject to audit! This means less work for you and your employees!

One of the other bonuses that you will definitely love is that there are no currency controls and no other financial restrictions. This is great news for anyone whose business is international.

Most commonly used by Isle of Man offshore companies

  • Holding investments, e.g. portfolios, UK commercial real estate and other company shares – these activities are not taxed.
  • Simplified trading within the EU due to the zero rate of income tax and the possibility to obtain a VAT number for trading within the EU.
  • Holding intellectual property rights, as IOM is a signatory to the Paris Convention on Patents and Trademarks.

The specifics of setting up offshore companies in the Isle of Man

  • Establishment of the company in 3 – 5 days after the approval of the company name by the Commercial Register. The name can only end with the words Limited or Ltd, Public Limited Company or PLC.
  • An offshore company can be established with only one shareholder, who can have a single share with zero value. The appointment of one director is permitted and he must not be a resident of the IOM.

Basic information

  • Type of legal entity: limited liability company
  • Establishment time: 2 weeks
  • Number of shareholders: minimum 1, can be any nationality
  • Shareholders: members can be FO or business entities.
  • Share capital: not defined
  • Shares on bearer: not allowed
  • Registered address is mandatory, but does not have to be physical
  • A company secretary is required
  • Directors: minimum 1, maximum not defined
  • Resident position of the director: the director need not be a resident of the Isle of Man

Taxation

  • Corporate income tax rate 0 %
  • Branch tax rate 0 %
  • 0% capital gains tax rate
  • Withholding tax on dividends, interest, royalties 0 %
  • Net operating losses can be carried back with income a year earlier and without restriction going forward
  • The Isle of Man and the United Kingdom are considered one of the VAT territories
  • Double taxation agreements with various countries were applied, determining tax rates on dividends, interest and royalties
  • Accounting. Billing and preparation of accounts is required
  • Audit is not required
  • Anonymity and privacy. Information about directors (administrators) and shareholders is open in the commercial register

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