An Isle of Man company can be incorporated as a 1931 Act Company or a 2006 Act Company.
The Isle of Man is an international finance centre making its own laws, setting its own taxes and benefitting from a skilled workforce, political stability and a dynamic business ecosystem.
The government has worked hard to create an environment for commerce to flourish by supporting a diversified economy that includes financial services, manufacturing, niche industries such as eGaming and emerging sectors such as BioMed.
In 2023 the Isle of Man had the lowest debt/GDP ratio of any European country, yet has comparable public services and pension provision to the UK *.
Advantages:
- Simple and advantageous tax regime (0 per cent standard rate of corporate income tax for most types of income)
- No stamp duty
- No withholding tax on dividends
- No inheritance tax
- No capital gains tax
- No transfer pricing arrangements
- A standard rate of income tax for employees of 10 per cent, temporarily capped at 22 per cent
- Tax incentives and grants for businesses relocating to the Island
- Isle of Man companies are able to register for VAT and businesses in the Isle of Man fall under the UKs VAT regime.
There are two incorporation options.
A company can be incorporated as a 1931 Act Company or a 2006 Act Company.
| 1931 Act Company | 2006 Act Company |
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Which Act a company is incorporated under will be determined by the nature of the business and the availability and capacity of the director and members.
A 2006 Act Company is more flexible with less rigorous procedures but a registered agent is obligatory and services will generate fees. This is beneficial for those not resident on the Isle of Man and who would prefer administrative procedures are carried out routinely by another entity, which could also provide a registered office and directors.
Smaller businesses with members and directors who are Island residents may prefer a 1931 Act Company they could administer themselves.
Both incorporation options trigger obligations under beneficial ownership and economic substance legislation.
No action should be taken on the basis of this note, nor should it be construed as amounting to tax, legal or VAT advice. Suitable, specific and professional advice should always be obtained in respect on any particular issue.
* Isle of Man Government Conference. Building Fiscal Resilience: International Perspectives by Jonathan Young.
