Isle of Man legislation in 2006 has abolished the previous tax exempt and non-resident company status and has introduced a zero percent corporate tax rate. With effect from 5 April 2007 all Isle of Man registered companies are assessed to tax at zero percent.
Companies Formed Under The Companies Acts 1931–2004:
- Minimum of one Shareholder
- May not be a public company (subject to certain exceptions)
- Minimum of two Directors
- Corporate Directors are not permitted
- A company Secretary must be appointed
- Registered Office must be located within the Isle of Man at which statutory Registers of Shareholders, Registers of Officers and minutes of meetings and accounting records must be maintained
- Shareholders’ annual general meeting must be held at which financial statements are to be presented
- Financial statements are not filed with any government body
- Auditing of financial statements is not required
- Share capital can be expressed in any currency
- No maximum authorised share capital
- Low incorporation costs based on a standard authorised share capital of £2,000
- No restrictions on corporate capacity thereby avoiding the need for detailed objects clauses within the Memorandum of Association
- Share transfers are free of stamp duty
- An annual return, providing details of Directors, company Secretary and Shareholders, is required to be filed with the Registrar of Companies, accompanied by the current filing fee
Companies Formed Under The Companies Act 2006:
The Companies Act 2006 introduced a new form of company which is intended to be a flexible and easily administered company, designed to complement the new tax regime.
- Unlimited capacity to undertake any business or activity and cannot restrict its activities by provisions in its Memorandum or Articles of Association
- The provisions relating to dividends and the purchase of own shares are more liberal and require only a statutory solvency test
- There is no differentiation between private and public companies
- Registry filing and accounting requirements are reduced
- The company may have a sole Shareholder
- The company must have a Registered Agent holding the appropriate licence in the Isle of Man
- Corporate Directors are permitted, within certain limits
- Existing companies may re-register as 2006 companies
- Apart from the enhanced flexibility and simplicity of administration, the company within the zero percent environment is seen to provide an opportunity to establish the management and control of assets in a tax-friendly environment