Isle of Man Finance

Steven Beevers, Deputy Head, Isle of Man Finance Isle of Man Finance 2nd Floor, Illiam Dhone House Circular Road Douglas Isle of Man IM1 1PG Email: steven.beevers@isleofmanfinance.com Tel: +44 (0) 1624 686400

The fiduciary services industry in the Isle of Man is established and well developed and the Isle of Man can rightly claim to be the centre of excellence for company administration and trust services.

There are over 200 licensed Corporate and Trust Service Providers (CSP's and TSP's) directly employing some 1400 people who can provide a full range of company and trust services to entities incorporated in the Isle of Man and in most other jurisdictions. The Isle of Man has a good reputation for it's quality of services and value for money. The incorporation of companies and the provision of services to companies and trusts in the Isle of Man generally is regulated by the Isle of Man Financial Supervision Commission under the terms of the Fiduciary Services Act 2000 and 2005.

The Island also offers a natural regime for trusts, being a common law jurisdiction and which has adopted the principles of Equity as they developed in the English courts and which have been applied identically in the Isle of Man since the seventeenth century.

The Island has a number of corporate law statutes which co-exist to provide a choice of corporate form.

These include:

• The Companies Act 1931-2004
• The Limited Liability Companies Act 1996 and 1999
• The Companies Act 2006

Of particular interest is the Companies Act 2006 and is detailed further below. This complements the existing company law offering by adding a modern business company style, not previously found within a European Time Zone.

Companies and trusts provided from the Isle of Man may often be part of an integrated wealth management service as the Isle of Man is also strong in private banking, life insurance (bond wraps), investment funds as well as international legal and accountancy services.

The Isle of Man has also developed a number of specialist niche corporate services at which it excels in areas such as ship and aircraft ownership, employment companies, intellectual property, real estate and financing as well as AIM listings.

Attractions of the Isle of Man:

The principal attractions for using the services of the Island for companies and trusts may be summarised as:

• Modern and flexible companies legislation
• Benign tax environment
• International standards of regulation and supervision
• Choice of 200 licensed company and trust services providers
• Modern companies registry
• Cost competitive services and operating environment
• Highly developed e-business communications and capability
• Diversified international finance industry including banking, investment, insurance and pension sectors along with attendant legal and accounting expertise
• Political stability (over 1000 years of continuous Government)
• Economic stability (over 24 years of continuous growth)
• European time zone (GMT)

Similarly, the Isle of Man has the capacity to accommodate new business to establish in the Isle of Man, including other company and trust service providers and family offices.

It should be noted that while most company and trust activities are regulated in the Island, the establishment of 'Private Trust Companies (PTCs) is not and thus the Isle of Man is an eminently suitable jurisdiction for these.

Companies Act 2006:

The Isle of Man Government worked closely with it's financial services industry to create and launch the 2006 Companies Act. This modern company law offering has been specifically designed for international use, at the same time meeting key OECD expectations in terms of disclosure and corporate governance.

The Act complements the Island's zero rate corporate tax regime and offers the industry a new product solution for meeting the modern day needs of a fast moving 21st century global market. In effect, the legislation streamlines the whole process of how businesses are set up and run. It is considered that these two initiatives taken together will position the Isle of Man as the jurisdiction of choice for company services and incorporation in a European time zone.

The main benefits of the Act are that it combines the advantages of speed of incorporation and flexibility of use with the ease of administration, because it streamlines the process of setting up and running a company in the Isle of Man.

Key Statistics:

1. Total number of Isle of Man companies (2006 and 1931 Act): 32,601 (31 December 2007)
2. New incorporations (2006 and 1931 Act) during 2007: 4,682 (up 35% from 3,465 in 2006)

Conclusion:

The Isle of Man is a 'triple A' (S&P and Moody's) rated quality international business centre and we recognise that business is not attracted to the Island by any one single factor - rather the overall package of benefits including the calibre and depth of professional services on offer, cost effectiveness, fiscal considerations and the robustness of it's regulatory environment, among others. The Isle of Man Government continually strives to ensure the Island is a centre of excellence in all these respects and that businesses and professionals dealing with the Island can have confidence in the high standards of professionalism and regulation in choosing the Island as a location for their bona fide business needs, incorporation and other services.

The Isle of Man fiduciary industry is actively represented by its trade body - the Association of Corporate Service Providers (ACSP) and there is also a local branch of the Society of Trust and Estate Practitioners (STEP)