Isle of Man Company Formation: Registering an Offshore Company (PLC) in Isle of Man

Table of Contents:

• Overview: Isle of Man Company Formation
• Advantages of an Isle of Man Private Limited Company (PLC)
• Top Uses of an Offshore Company in Isle of Man
• Key Corporate Features of an Isle of Man Company Formation
• Isle of Man Company Registration Packages
• Isle of Man Company Incorporation Requirements
• Corporate Non-resident Company Taxation in the Isle of Man
• Isle of Man Company Corporate Details
• Isle of Man Private Limited Company Formation Products from Offshore-Protection

Overview: Isle of Man Company Formation

The Isle of Man is an internally self-governing territory of the British Crown, separate from the United Kingdom has a diverse and well-established finance sector with a secure regulatory market and a long-standing offshore company formation tradition.  An Island of Man company formation is created under the English Companies Act 1929 and is the foundation for the Isle of Man Companies Act 1931-2004 in which the Private Limited Company is formed under. 

There are a dozen other pieces of corporate legislation and offshore vehicles that offer a variety of benefits, though the Private Limited Company is the most commonly used by foreign-owned non-resident clients. A Company may be incorporated as a limited (with shares, by guarantee, or a hybrid) or as an unlimited (without shares) company.

The Isle of Man has signed all of the relevant international financial regulatory statutes and has complied with the anti-money laundering policies put forth by FAFTA and remains dedicated to ensuring the sovereignty and continuity of its offshore financial sector. The country offers relatively quick incorporation processing and low registration costs together with access to EU markets and a formidable reputation all make the Isle of Man an attractive jurisdiction to go offshore.

For more information on the Advantages of the Isle of Man as an Offshore Financial Center.

Advantages of an Isle of Man Private Limited Company (PLC)

• International reputation
• Renowned financial jurisdiction
• English as the official and common language
• Has a robust offshore financial market
• Geographical proximity to the UK and the European Union
• Beneficial ownership is lots open to the public
• Small business audit exemption
• No requirements to file accounts
• Financial accounts are not open to the public
• Once incorporated the company has a separate legal personality and has an indefinite existence
• Limited Liability for shareholders
• Availability of an unlimited amount of shareholders
• Is on the OECD ‘white list’
• Has met all of the international regulatory requirements put forward by the IMF, FATF, and EU
• Potential of a 0% corporate tax rate

Top Uses of an Offshore Company in Isle of Man

• International Trading
• E-Commerce
• International Business
• International Holding Company (physical and intellectual property)
• Registration of Holding of sea vessels

Key Corporate Features of an Isle of Man Company Formation

Isle of Man Company Registration Packages

Includes:

1. Government Registration Fee (First year)
2. Registered Office Address (First year)
3. Registered Agent Services (First year)
4. Company Secretarial Maintenance
5. Certificate of Incorporation
6. Memo & Articles of Association
7. Appointment of 1st Directors
8. Consent Actions of the BOD
9. Share Certificates
10. Register of Directors
11. Register of Officers
12. Register of Shareholders
13. FREE Phone and/or email consultations

Isle of Man Company Incorporation Requirements

• To register a Private Limited Company under the Companies Act 1931 in the Isle of Man, the following documents need to be sent to the Companies Registry:
  
  
  • Form 1 – containing the details of the name of the company, its registered office address and the names of the company’s directors and secretary. The form is to be signed by the subscribers of the company’s memorandum of association and be each director and secretary
  • Company’s Memorandum
  • Articles of Association

Corporate Non-resident Company Taxation in the Isle of Man

Private Limited Companies are not subjected to any local taxation by authorities of the Isle of Man. There are no taxes including:

• No withholding tax
• No dividends tax
• No Corporation tax for most companies (up to 10% for some)
• No Capital gains tax
• No stamp duties

There are capital duties on the issuance of shares, which is GBP 130 if the share capital is less than GBP 2, 000. Companies that have a higher share capital are liable to pay GBP 17 per GBP 1,000 of authorized share capital above GBP 2,000. There is a maximum capital duty of GBP 5,000.

Registration for a VAT number is required.

Isle of Man Company Corporate Details

Anonymity, Confidentiality and Disclosure

Director and Shareholders information are publicly available. Form 1, the Articles of Association and the Company’s Memorandum are in the public record, although the details of the beneficial owner are not available on public record neither are the company’s’ financial accounts. Nominee services are allowed.

Company Shares

A Company may be incorporated as a limited (with shares, by guarantee, or a hybrid) or as a unlimited (which is with or without shares).

Shares may be ordinary, convertible, redeemable, preference and non-voting shares. Bearer shares and shares with no par vale are not allowed.

Required Capital

A Private Resident Company has an authorized share capital of GBP 2,000 and a minimum of GBP 1.

Directors

There is a minimum requirement of two (2) Directors for a Private Limited Company. The Directors must be individuals, as such corporate entities are not allowed. The individuals may be a resident of any country and of any nationality. Details of the Directors are open and are publicly available.

Shareholders

There must be a minimum of one shareholder, who may be an individual or a legal person, and may reside anywhere in the world and be of any nationality. Shareholder information is publicly available.

Trading Restrictions

A Private Limited Company is not permitted to conduct any business that is related to banking, insurance, investment management and the solicitation of public funds activities without the appropriate licence.

Principal Corporate Legislation

The Companies Act 1931-2004 governs Private Limited Companies formed in the Isle of Man.

There is also a 2006 Act Company that regulates another form of companies under a separate piece of legislation that runs in parallel to the 1931 Companies Act. A company formed under the 1931 Act may freely convert itself to a company under the 2006 Act Company, but not vice versa.

Type of Law

The Isle of Man is based off of English Common Law.

Powers of the Company

A Private Limited Company has all the powers of a natural person.

Company Meetings

Company meetings are required and must take place every calendar year and may take place anywhere in the world.

Local Requirements

It is required that a Private Limited Company have a local registered office. Financial details and records of the company must be kept in the local office. Although they may be kept elsewhere in the world, every six months they should be sent to the local registered office. A registry of Members, Directors and Secretaries also must be kept at the local registered office.

Company Secretary

A company secretary is required for a Private Limited Company. A secretary must be a natural person, may be of any nationality and may reside anywhere in the world and must be qualified.

Registered Office required

Yes a local registered office is required for a Private Limited Company.

Audit Requirements

All companies re required to be audited. However, small companies are exempted if it meets two of the following three criteria:

• Has a turnover of less than GBP 5.6m

• Has a balance sheet of less than GBP 2.8m

• It employs 50 persons or less

Or, if the company has all its members as directors throughout the year and it exists for the purpose of holding shares, securities, investments or land.

Annual Reporting

Every year a company must prepare its reports that include its balance sheet, directors report, auditors report as well as an account of its profits and losses and send it in to the Financial Services Commission.

Exchange Controls

There are no exchange controls on the Isle of Man.

Financial Statements required

There are no requirements to file a company’s audited financial statements with the Financial Services Commission, although a company must prepare and keep its accounts at its registered office.

Shelf Companies available

Yes shelf companies are readily available.

Time required to form offshore company

1-5 business days

Language of Name

Names can be expressed in any language that uses the Latin alphabet, though the Register must be in receipt of a certified English translation.

Names of Company requiring a special licence or permission

Any company that has a name that includes the word: bank, building society, savings, loans, insurance, assurance, reinsurance, cooperative, council, Chamber of Commerce, trust, municipal, finance, must first receive the appropriate approval and/or licence.

Permitted limited liability suffixes

A Private Limited Company must have ‘Limited’ or its abbreviation ‘Ltd’ after the company name.

Access to Double Tax Treaties

The Isle of Man has a limited treaty with the U.K. and is not a member to any double tax treaties.

Minimum Annual Tax

GBP 360

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