Case Study Example 1

The Isle of Man is an established international business and finance centre, with a secure base built on a reputation for political stability, low taxation and a firmly established fiscal and regulatory environment.

The Isle of Man is an internally self-governing dependent territory of the British Crown and whilst it is situated within the British Isles, it is independent of the UK. The Isle of Man is technically a Crown Dependency of the UK but is independent in all matters except in relation to foreign affairs and defence, both of which are the responsibility of the United Kingdom Government.

Why is the formation of an Isle of Man Company the way forward?

One of the main advantages of an Isle of Man company is paying zero tax on trading and investment income in the Isle of Man. The Isle of Man has a customs and excise agreement with the UK. This means that for Value Added Tax, customs, and most excise duties, the two territories are treated as one. So it may be advisable to register an Isle of Man offshore company for VAT if it plans trading with the UK or EU. The Isle of Man is therefore a very good jurisdiction to incorporate a trading company if you wish to import and export goods into and out of the EU.

Some of the other common uses of the Isle of Man offshore company formation are:

  • Holding investment, e.g. portfolios, UK commercial property and other company shares – these activities are not taxed
  • Simplified trading within the EU due to the zero rate of tax on trading income and the ability to quote an EU accepted VAT number
  • Holding intellectual property since the Isle of Man is a signatory to the Paris Convention on Patents and Trademarks.

The formation of an Isle of Man company can be as quick as one hour (additional charge) once the company name approval has been applied for and received from the Companies Registry.