| THE
ISLE OF MAN AS A FINANCIAL CENTRE
Legal
System
The
Isle of Man’s legal system is based on English common law
but is independent from the British system. The Island has its own
legal profession, judiciary and laws. In areas such as taxation,
company law and financial supervision, Manx law has been developed
to meet the special circumstances of the Island as an international
financial and offshore centre. There is a single legal profession
of advocates rather than the split discipline of solicitors and
barristers as in England.
Decisions
of English Courts are not binding on Manx courts but are of high
persuasive authority and the principles of equity recognised by
English courts are generally adopted on
the Island.
Regulation
and Security
The Island provides greater financial security than many other offshore
centres. It has strong financial regulatory systems in place supervised
by the two Government agencies, the Financial Supervision Commission
and the Insurance and Pensions Authority. It is one of the few offshore
jurisdictions that operate a Depositors’ Protection Scheme.
Consequently, it is one of the most regulated and secure offshore
centres. The G-7’s Financial Stability Forum rated the Isle
of Man a ‘Group One’ offshore financial centre deemed
to be under ‘good quality’ supervision.
Wide
choice of Products and Services coupled with Competitive Costs
The Isle of Man has on offer a comprehensive range of products and
services including products, which are not commonly found in other
offshore jurisdictions, such as Hybrid Companies and Purpose Trusts.
Unlike many offshore centres, the Isle of Man is not overpopulated
and has room for growth. Competition and flexibility keep costs
under control and both Government and professional charges for corporate
and trust services
are contained.
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Confidentiality
While no jurisdiction is totally confidential in these turbulent times,
the Government is acutely aware of the importance of confidentiality.
Much of the responsibility for maintaining confidentiality is placed
on the professional firms with heavy penalties for infringement. There
is no requirement to register trusts or lodge accounts of private
companies or trusts with non-resident beneficiaries.
Communications
and Banking System
Although the Isle of Man is a separate jurisdiction from the United
Kingdom, it does form part of the British Isles. This brings the
benefits of the same international dialling code and postal address
as the UK, as well as integration within the efficient and well-regulated
British Banking System. With this link to the Sterling economy,
the Island does not have exchange controls.
Value
Added Tax and Tax Treaty
The Isle of Man is one of the few offshore jurisdictions that are
part of the European Union (“EU”) for customs and VAT
matters. Although the Island itself is not an EU member, it has
a Customs Union and a Double Taxation Treaty with the UK. VAT registration
is frequently important for inter-European Community trading. This
represents a very attractive opportunity for certain trading companies.
An Isle of Man VAT number is indistinguishable from a UK VAT number
and is obtainable by an Isle of Man company or by a foreign company
registered in the Isle of Man.
Taxation
Personal - The Isle of Man does not have death or estate duties,
capital transfer or gifts taxes, capital gains tax, or wealth tax.
The income tax standard rate for resident individuals is 10%, with
a maximum rate of 18%. The Government’s stated intention is
to reduce this to 15% in the short term.
Corporate - a separate summary of corporate taxation is included
within these notes. |
| "IN
THIS WORLD NOTHING IS CERTAIN
BUT DEATH AND TAXES."
- Benjamin Franklin (1706 -90) |
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