Isle of Man companies are sometimes referred to as ‘offshore’ companies in the wider world. In fact that is a misnomer because unlike many offshore centres, there is no difference at all in the Isle of Man between domestic companies and our ‘international’ ones.
Isle of Man offshore companies are simply our domestic ones which happen to be very capable vehicles for international business as well.
Types of Company in the Isle of Man
There are 4 main types of corporate entity that can be formed under Isle of Man legislation – details of which are kept at the Isle of Man Companies Registry. These are..
(i) Isle of Man Foundations. Formed under the Isle of Man Foundations Act 2011 and now gaining in popularity after a slow start. These entities are sometimes thought of as incorporated trusts; they have corporate personality, can be set up for a specific purpose (charitable or otherwise) or for the benefit of beneficiaries; they have no shareholders and are controlled by a council. See more information here. Less than 100 have been registered to date.
(ii) Isle of Man LLCs. Originally modelled on US legislation and formed pursuant to the Isle of Man Limited liabilities Act 1996, these companies are essentially a hybrid between a partnership and a company. They are generally controlled by their owners (members), who enjoy limited liability. LLCs are tax transparent for Isle of Man tax purposes. They are useful as personal service companies and sometimes for asset protection purposes and (in our view) increasingly for Isle of Man residents – see our article “Over here but underloved and Overlooked”. Less than 1000 LLCs have been formed on the Island in the last 19 years.
(iii) Isle of Man ‘31 Act Companies. This is the ‘traditional’ Isle of Man company and is formed under the Isle of Man Companies Act 1931 to 2004. It remains a popular corporate form, but has undoubtedly been overshadowed by its younger and more flexible brother – the 2006 Act company (see below). This entity and is available in number of forms – including, share capital companies, guarantee companies and hybrid companies – which have a share capital and guarantee members. With the exceptions of banking business, large Isle of Man retailers and local rents it is taxed domestically at zero percent. Almost 130,000 have been formed since 1931; Isle of Man Bank Limited has the distinction to being company number 000001c
(iv) Isle of Man 2006 Act companies. This is the Isle of Man’s answer to the International Business Companies offered by jurisdictions like the BVI; although as noted above, they are not restricted to use by international clients. Middleton Katz formed company 000001V on 1 November 2006 under the Isle of Man Companies Act 2006 and another 11,000 or so have been formed since then. This is the entity of choice for our clients and is an extremely useful and flexible corporate entity. Like the 1931 Act company, it is available in a number of types including, share capital companies, guarantee companies and hybrid companies – which have a share capital and guarantee members. Simalar to the ‘31 Act Company, with the exceptions of banking business, large Isle of Man retailers and local rents it is taxed domestically at zero percent.
There is no differentiation between the use, operation or taxation of the entities domestically compared with internationally (sometimes called ring-fencing). Specifically..
There are no requirements to appoint local directors / members / secretary or council members.
All Foundations, LLCs and 2006 Act companies are required to appoint local registered agent.
There is no differentiation in respect of local taxes for entities owned and controlled by international compared with local owners / controllers.
There are no restrictions on activities of the entities locally compared with internationally.
Middleton Katz Services.
If you require a reliable and cost effective Isle of Man corporate service provider, we would be pleased for the opportunity to assist you. To learn more about us and how we can help you – please see here.