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ISLE OF MAN
Our services and fees
Parent companies and their subsidiaries in the European Union
OECD: Articles of the Model
Convention with Respect to taxes on income and on capital
Beware of cheap founders!
Table of Fees: International Business Formations
Index Offshore Company Formation
Services provided by our Law
Firm – or our Partner Network:
-Formation of the company, Apostille, upon request certified
translation of the formation documents
-Certificate of Incorporation: The certificate of incorporation
is an official document that confirms the name of a registered
company, as well as the registration number.
of Good Standing
from Registered Office to maintaining a business office
request: Nominee Director (attorney acts as a trustee and acts
as the Director of the company during the formation phase) and /
or Nominee Shareholder (natural person or legal entity – Law
firm acts as a trustee in the form of the shareholder of the
- Upon request: Permanent Nominee
Director (Attorney acts as trustee in the capacity of Director
of the company during the entire term of the agreement)
A production site, a site for
the exploitation of mineral resources or construction works
whose duration is greater than 12 months always constitutes the
establishment of a place of business in the country of the
(for example: Belize, BVI, Cayman Islands,
Nevis etc….), independent „of the place of managerial
supervision” (analogous to Article 5 OECD_Model Convention).
Otherwise the taxable permanent establishment is defined via the
„place of managerial supervision”. As a rule this implies,
that a person who maintains his ordinary residence in the
country of the company's seat must act as the Director of the
company. Either the client or an agent relocates his ordinary
residence to the country of the company’s seat and he, himself,
acts as the Director of the company or our Law Firm in the
country of the company’s seat provides a Nominee Director.
Alternative: For example: The Danish client / founder acts as
the Director of the company and establishes credibility that he
is present in the country of the company’s seat within the
course of carrying out the required managerial supervision. Due
to the fact that as a rule tax havens (Belize, BVI Cayman
Islands, Nevis etc…) do not maintain a public commercial
register, the installation of a “Nominee Director in the
formation phase” is possible and not necessarily a "permanently
present Nominee Director”.
request: Bearer shares
request: Liechtenstein Institute as the shareholder of the
The shareholder or the shareholders are
the „Owner” of the company. It can be individuals or companies.
Bearer shares, nominee shareholder or for example a
Liechtenstein Institute as a shareholder serve to conceal the
true ownership relationships. Which constellation is best
suited, is dependent upon different prerequisites. We would
welcome the opportunity to discuss this with you in a personal
Opening of an account in the name of the company, incl. Online
banking and VisaCard (in the case of bearer shares the opening
of an account is often only possible, if the client / founder is
not present at the opening of the account)
request: Investment account in Switzerland (Minimum deposit
- To the
extent it is a requirement of domestic law: Provision of proof
of the exempt status to the authorities (most tax havens
differentiate between offshore and onshore companies. Onshore
companies are taxed normally, offshore companies – i.e.
companies which transact business outside of the country are not
taxed. The Cayman Islands is the exception: Real zero-tax haven)
Isle of Man Company Formation
The Isle of Man has a double taxation agreement only with England, and
therefore only from an English point of view it is no offshore
company. Therefore, the Isle of Man is only suitable as shareholder of
the English Limited company. Any profits of the English Limited
company flow into the Isle of Man and are taxed with only approx. £
450 per year. In addition, the Isle of Man Limited company may send
invoices to the English Limited company, which means capital outflow
from the English Limited company before withholding tax.
Fees for complete packages (full service)
The following services are included in our complete packages:
Forming of the company, entry in the commercial register of the
country, apostille, notarially certified translations of certificates
into English, unless official language
An attorney in the formation country will act as nominee director of
the company (to the outside) and transfers all rights and
obligations internally to the actual beneficiary (notarial deed of
trust). The director does not have any account authority.
a tax office in the formation country will act as nominee
shareholder (to the outside) of the company and transfers all rights
and obligations internally to the actual beneficiary (notarial deed
Domicile of the company in the formation country:
deliverable postal address, availability by telephone, telephone and
fax, mail forwarding service
bank account for the company at a renowned major bank in the
formation country, internet banking, VisaCard and cheques. Only the
founder of the company is authorized to have access to the account.
General power of attorney to the founder:
Only the founder receives a notarially certified general power of
attorney for the company.
Recommendation of a renowned tax office in the formation country, for book-keeping
Internet-homepage of the company
hosted on a server in the formation country: 5 pages for
presentation of services/products, feedback form, imprint, e-mail
address. May be extended at any time.
The fees for the complete packages include the services mentioned
above; any special services (nominee director and shareholder,
domicile) are paid for one year.
Fee including all special services for the first business year: €
Annual Fee from the second business year: € 2,900.00
the Isle of Man there is no general capital gains tax, turnover tax or
capital transfer tax, and there are no stamp duties. Apart from VAT,
the only significant tax is income tax which is levied at a maximum
rate of 18% on 'persons', ie individuals or corporations (companies).
In its budget for 2002/03 the government reduced lower rates of income
tax to 10%. The Assessor of Income Tax is the head of the Income Tax
Division of the Manx Treasury and carries out the functions of tax
assessment and collection. The Manx tax year runs from April 6th to
April 5th (as in the UK). The island forms part of the EU VAT area,
and applies the same rate as the UK.
According to plans
announced in mid-2002, the rate of corporation tax will be reduced to
zero for all companies other than banks and some other financial
services companies, in stages over a 4-year period.
can take advantage of a number of offshore regimes in order to reduce
taxation. The term 'offshore' is not used in Isle of Man legislation
or in describing company forms. Non-residence is the key criterion for
obtaining offshore tax treatment other than for the International
Company and Exempt Company, which are regarded as being resident. The
main forms useful for offshore operations in the Isle of Man are the
Exempt Company, the International Business, the International Limited
Partnership, the Limited Liability Company (LLC) and the Trust.
Normally, non-resident tax treatment is given to foreign income, while
income arising in the Isle of Man is taxed more highly.
In July, 2004, the Income Tax (Amendment)
Bill 2004 was signed, marking an important step towards the programme
of changes under the island’s Taxation Strategy, whilst also helping
the jurisdiction to meet its international commitments, said Treasury
Minister Alan Bell.
“One of the most significant changes that will impact on individuals
on the Island is the move to a current year basis of assessment
including the introduction of a payment on account,” Mr Bell explained.
He added: “The change to current year basis of assessment and the
introduction of the new payment on account system will be achieved
this year. When the next income tax return form is issued in April
2005, people will have a longer period to complete it - there will,
however, be a new late filing penalty system.”
The Act includes measures to:
Extend the current year basis of assessment to all income received
by individuals and other non-corporate taxpayers, including income
from investments, self-employment and other sources. (Income from
employment is already on a current year basis).
Introduce a payment on account system for those people who do not
pay their annual income tax liability through the Income Tax
Instalment Payment or Sub Contractor’s Deduction Schemes.
Allow more time to make a tax return and, after a period of
education, introduce a late filing penalty system.
Provide the Assessor with additional powers to obtain information,
including documents and information required to enable the Island to
comply with its international commitments.
Prevent the avoidance of Manx tax through the use of company loans
to take advantage of the differential between corporate and personal
income tax rates.
"As I said when I introduced this Bill last year, the people of the
Isle of Man are entitled to an income tax system that works as
efficiently as possible and collects all the money that is owed to
public funds,” Mr Bell continued, noting:
“Manx income tax rates are low compared with other countries and it is
not unreasonable to expect payment of what is due. It is also
important for the reputation and stability of the Island that we have
the ability to honour our international commitments.”
Tax Treatment of Offshore Operations
Domestic Corporate Taxes for the general principles of Isle of Man
corporate taxation, which also apply to offshore entities except as
Manx companies are taxed as follows:
Non-resident limited liability companies
(and foreign branches with non-resident status) are liable to an
annual duty of £830, payable to the Registrar of Companies along
with the annual return. They are exempt from income tax on
foreign-derived income, but pay Isle of Man higher-rate income tax
(18%) on any local income.
Companies pay a fee of £475
along with their annual application for exemption (more if it is
late). They are not permitted local income, except (untaxed) bank
interest (by concession).
- International Companies
like Exempt Companies, are not permitted local trading income)
negotiate a rate of tax up to 35% on their foreign income (minimum
tax to be paid = £1,260). The intention is to help companies,
particularly investment companies, conform to minimum tax
requirements imposed by other jurisdictions.
Non-resident partners in a Manx partnership, limited partnership or
Limited Liability Company are liable for tax only on Manx-derived
income (with the usual concessions regarding bank interest), and
then as individuals (see Personal Taxes). The International Limited
Partnership, which is analogous to the International Company, pays
£475 annually with its application for such status; it may not have
local income other than bank interest.
insurance companies can apply to be exempt from IOM income tax under
the Income Tax (Exempt Insurance Companies) Act 1981. As with exempt
companies in general, application for exempt status must be made
annually, with a total fee for insurance companies of £2,500.
Normally exemption will only apply to underwriting of risk arising
outside the island. Applications are made to the Chief Financial
consequence of its commitment to the OECD, the Isle of Man announced
in its 2002 budget that shipping and insurance companies would be
brought within the regular income tax system, but at a zero rate.
with non-resident beneficiaries are exempt from Isle of Man income
tax on income arising outside the island and (by concession) on IOM
Taxation of Foreign Employees of Offshore Operations
no special rules applying to the foreign or Manx employees of offshore
operations. The various exemptions from income tax described above do
not apply to employees: any business employing and paying people on
the Isle of Man will have to operate the ITIP system of deductions
from pay (based on and similar to the UK PAYE system). It is not legal
to employ non-Manx people on the island without a work permit. See
Domestic Personal Taxes for the general principles of individual
taxation on the island, which also apply to the resident employees of
non-resident entities. Most types of compensation and benefit paid to
employees are taxable; there are no special privileges or exemptions
for expatriate workers.
no statutory definition of residence. The Isle of Man often follows
the UK in this respect. Normally, an individual is resident if he
spends more than six months on the Island in any one year, or more
than 3 months on average in each of 4 consecutive years.
Non-residents are liable to pay Manx income tax only in respect of
income arising on the island or from Manx sources. By concession, Isle
of Man bank interest is not taxed in the hands of non-residents.
of Man has no exchange controls.
companies, International Companies and International Limited
Partnerships, activities on the island are limited to administration
of external business, or dealing with other exempt organisations.
Non-resident companies can have activity on the island, but not such
as to constitute management and control; in their case, and in most
other cases, there can be trading activity on the island, but it will
be taxed. As long as the operation is not judged to be resident (when
all income will be taxed) income is simply split according to its
source and taxed or not accordingly.
Employment and Residence
no special privileges for the employees of non-resident or offshore
entities on the Isle of Man. See Personal Taxation - Residence and
Liability for Taxation and Labour Regulation - Work Permits for