About the Isle of Man
The Isle of Man is found in the Irish Sea, center of the British Isles, and it is a self-governing country that is dependent on the British crown. The legal system in the Isle of Man is patterned after the English common-law model. Queen Elizabeth II is holding the Lord of Mann title, and the government executive branch is the Council of Ministers. The Isle of Man Citizenship is ruled by the British Law. The Isle of Man does not hold the European Union’s membership nor associate membership. The British government gives military defense and foreign relations, and English is the native language. Therefore, an Isle of Man company formation is a good investment.
Isle of Man Company Formation
It is possible to incorporate a company in the Isle of Man with only 1 director, and he or she does not have to be a resident. Forming an offshore company in the Isle of Man should file an annual return at the Companies Registry, which must be prepared by directors and submitted by an Island agent.
If a non-resident sets up a company in the Isle of Man, a nominee director is required by the formation agents as company representative. However, this is important for practical compliance and sake of security. For instance, it would be very hard to open a bank account if there is no nominee director representative.
There is no minimum capital requirement for offshore corporations. Usually, the registered corporate agent will only issue two £1.00 shares. The maximum authorized capital is £2,000.
- No corporate income tax that is dependent on certain circumstances
- The dividends non-residents receive are not taxed
- Zero capital gains tax
- Zero inheritance tax
- Double tax relief that is available for the foreign taxes paid
- No withholding taxes
- No strict capitalization rules
- The losses can be brought forward indefinitely if the business test continuity is met
- There are provisions for loss relief in the group of companies
Requirements for Accounting and Auditing
Isle of Man corporations must file an annual tax return, even they do not have tax debts. The responsibility of tax return preparations depends on the directors while the return must be fled by the registered agent.
The offshore corporations do not have to prepare accounting records for filing taxes. However, the registered agent does not have to keep accounting records. In addition, an offshore company will not go through auditing if it meets these requirements:
- The annual turnover is about GBP 6.5 million or less
- The balance sheet total is GBP 2.8 million or less
- It has an average amount of employees that is less than 50
Why Start a Business in the Isle of Man?
- You can stay connected in the Irish Sea, and there is an extensive broadband in the Island, and there wi-fi hotspots. The residents and businesses all benefit from great internet connectivity. Even if it is in the Irish Sea, the Isle of Man is well connected. There are airlines that serve the island which includes Aer Lingus, Easyjet, British Airways, and Flybe. These provide regular flights to Ireland, the UK, and farther places.
- The companies in the Isle of Man has a strong legal system, sophisticated financial and banking industry, and political stability that has no limitations or exchange controls on finances. In addition, most start-up companies do not require audited accounts, and this is only necessary for companies with a specific size above the auditing threshold. The audit threshold has a turnover of above £5.6 million and the balance sheets have a total of above £2.8 million, with more than 50 employees.
Contact 3E Accounting to get assistance in setting up a company in Isle of Man.