Tax Haven Isle of Man

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Tax haven Isle of Man has reported positive growth year after year measured at 10% during the period 1997 and 2002 and before the global economic crisis recorded continued growth at approximately 8% annually. Financial and professional services constitute a major economic sector, having expanded by two-thirds over the past six years and by 50% respectively. Tourism and banking and relevant to Isle of Man as a tax haven, while e-gaming, e-commerce, aircraft registration, film production, ship management and clean tech are increasingly occupying a larger percentage of the economy. Unemployment in tax haven Isle of Man stands at less than 1.5% and in the financial period 2008-2009 recorded total revenue of nearly 0.6 billion pounds in its treasury.

Country Overview

Tax haven Isle of Man is located in the heart of the British Isles and has a population of about 80,058 according to 2006 figures. Isle of Man is situated between Ireland and Great Britain and is found in the Irish Sea. Tax haven Isle of Man is self-governing and has the status of a British Crown Dependency. The Queen of England is head of state and is represented by the Lieutenant Governor. The legislature is the world’s oldest and is known as Tynwald, an ancient parliament. Tax haven Isle of Man’s parliament has 2 branches comprising the Legislative Council and the House of Keys, whose members are elected by popular vote every five years.

The island has an area of about 572 square kilometers and measures 14 miles wide and 52 kilometers long. Both the north and southern regions are hilly and are separated by a valley which lies in the center of the island. The far north however is flat and is made up deposits accumulated from glacial matter originating from western Scotland. Tax haven Isle of Man is not alone as it consists of St. Michael Isle, Calf of Man, St. Patrick’s Isle and Chicken Rock. The islands of St. Patrick and St. Michael are attached to Isle of Man by roads.

Tax haven Isle of Man was colonized as early as 6500 BC with its separation from Ireland and Britain occurring sometime around 8000 BC. The early inhabitants are said to have resided in modest natural shelters and engaged mainly in fishing, food gathering and hunting. Better knowledge of farming, pottery and stone tools were introduced mainly during the Neolithic Period.

Tax haven Isle of Man has a banking system which is similar to that in the UK. Current accounts, deposit accounts and all other services offered by UK and international banks are available in the Isle of Man while interest rates are comparable to those prevailing in the London Money Market.

Isle of Man Fiscal Incentives and Advantages

Tax haven Isle of Man rates highly for a sound economy and political system. External relations with the United Kingdom (of which the island is not part), the EU (of which the island is not an associate member or a member state), the OECD and the WTO have helped the Isle to develop as a regulated offshore jurisdiction and international business hub.

  • No exchange controls
  • 0% income tax on insurance companies since 2007
  • Protected Cell Companies can conduct insurance business from or in the Isle of Man
  • Endless business opportunities
  • Business friendly environment
  • Modern and developed infrastructure
  • Clear and simple tax regime
  • Flexible and responsive government
  • Easy access
  • Large pool of professionals and skilled workers

Isle of Man Offshore Financial Services

In 2007, tax haven Isle of Man was named the leading offshore center by the Global Financial Centres Index published by the City of London. Offshore financial services represent about 35% of the Isle’s national Income and provide employment for 23% of the labour force. Factors contributing to a prosperous offshore sector in tax haven Isle of Man include good reputation, low operating costs, modernized and advanced telecoms network and financial support. Licenses issued to perform offshore financial services in and from within tax haven Isle of Man are organised in classed activities as listed:

  • Class 1 – Deposit taking
  • Class 2 – Investment Business
  • Class 3 – Services to collective investment schemes
  • Class 4 – Corporate Services
  • Class 5 – Trust Services
  • Class 6 – Monetary Transmission Services
  • Class 7 – Management or Administration Services

Isle of Man Legislative Framework

Any economy which promotes itself as a hub for international business establishes a legislative structure which supports the various benefits and sectors operating within it. Tax haven Isle of Man is a mature offshore jurisdiction and as a result has a thorough legal framework for financial and trading entities. The following is a list of Acts in tax haven Isle of Man:

  • Companies Act 1931-2004
  • Limited Liability Companies Act 199 and 1999
  • Financial Services Act, 2008
  • Insurance Act 1986 (amended 2004)
  • Electronic Transactions Act, 2000
  • Companies Act 2006
  • Banking Act 1998, as amended
  • Trustee Act, 1961
  • Trusts Act 1995; Purpose Trust Act, 1996
  • Companies Securities (Insider Dealing) Act 1987
  • Anti-Terrorism and Crime Act 2003
  • Drug Trafficking Act, 1996

Isle of Man Financial Supervision Commission (FSC)

The Financial Supervision Commission is the regulatory authority responsible for supervising and regulating financial services in the Isle of Man. The FSC’s objectives are to minimize financial crime; promote the Island’s economic advancement as an international financial centre; and provide adequate protection for the clients of companies conducting regulated activities.

The regulated activities that fall under the supervision of tax haven Isle of Man’s FSC include corporate services; investment business; trust services; services to collective investment schemes; deposit taking or any service or activity that involves cash transfers. Rules established by the FSC include matters dealing with regulated activities, corporate governance and the management of risks by licence holders, products and services offered by or on behalf of licence holders, the carrying out of business by licence holders, accounts records, accounts and solvency of licence holders and the enforcement of regulatory decisions.

Other regulators:

  • Insurance and Pensions Authority (IPA)
  • Office of Data Protection Supervisor
  • Office of Fair trading (OFT)
  • Financial Crime Unit (FCU)

Isle of Man Recent Developments

On May 13, 2008, tax haven Isle of Man was named the ‘Best International Financial Centre’ at the 9th annual International Investment Fund & Product Awards. At the awards ceremony, Treasury Minister, the Honourable Allan Bell MHK, Treasury Minister of tax haven Isle of Man stated that Isle of Man’s position as the leading international finance centre in the world was clearly recognised by the Award. Allan Bell also commented on the strength of the Island’s financial services industry, which was demonstrated by the number of awards that were won by life and investment companies located in tax haven Isle of Man.

In its February 2009 Financial Review, tax haven Isle of Man expressed its commitment to continue building the Island as an offshore financial centre despite the challenging economic times. Added to tax haven Isle of Man’s international financial services achievements, was the ‘AAA’ sovereign credit rating that the Island retained from Standard & Poor’s and Moody’s, two top international rating agencies.

In taking measures to increase transparency and compliance within its financial sector, tax haven Isle of Man signed Tax Information Exchange Agreements (TIEAs) with Australia (January, 2009), Germany (March 2009), and is expected to sign the same with France in the very near future; making tax have Isle of Man a signatory to such agreements with a total number of 13 countries, 11 of which belong to the OECD.

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