Isle of Man: The Isle Of Man Is The Premier Jurisdiction For Offshore Vehicles Listed On AIM - How Simcocks Can Assist

Last Updated: 23 May 2012
Article by Alex Spencer


AIM is the London Stock Exchange's international market for smaller growing companies, ranging from young, venture capital-backed start-ups to well-established, mature businesses seeking to expand.

The Exchange's objective in setting up AIM was to offer smaller companies (in the UK and abroad and from any sector) the opportunity to access London's capital markets via market with a pragmatic and appropriate approach to regulation.

Since its launch in 1995, more than 3,000 companies have joined AIM − raising billions of pounds in the process, both through initial public offerings (IPOs) and further capital raisings. Many companies have subsequently transferred to the Exchange's Main Market.

Many of the companies listed are offshore vehicles and the Isle of Man is the leading provider of these vehicles.


A listing on AIM involves the following participants and service providers:

  • The Company

    AIM is suitable for smaller companies from any sector and from any country. The company is likely to be advised by UK solicitors and reporting accountants and by financial public relations and investor relations consultants. Where the company is incorporated offshore (for example, in the Isle of Man) lawyers in the jurisdiction of incorporation will also be employed.
  • The Registrar

    Shares are usually in uncertificated form and title is transferred by means of an instruction issued in accordance with the rules of the CREST system. For this purpose, a registrar/CREST service provider is appointed.
  • The Nominated Adviser

    Every company joining AIM must appoint a Nominated Adviser (known as a Nomad), which must be approved by the Exchange. The role of the Nomad includes pre-vetting of the company, assisting it through the listing process and the provision of advice and assistance post listing to ensure that the company complies with its ongoing obligations. The Nomad will appoint its own legal advisers.
  • The Broker

    The broker is responsible for facilitating and promoting trading in the company's shares on the market. In many cases, the broker is the same firm as the Nomad. The Broker may also appoint its own legal advisers.
  • The Investor

    Investors range from City institutions to small investors.
  • The Exchange's AIM Team

    The Exchange has a specialist AIM team dedicated to providing advice, information and support for all AIM participants.


In recent years there has been considerable growth in the number of listings based on an Isle of Man incorporated company vehicle. Indeed, it appears the Isle of Man is the offshore jurisdiction of choice for AIM listings, particularly for Eastern European, Indian, Russian and Chinese businesses.


The Jurisdiction

  • The Isle of Man is a sophisticated and well-regulated international finance centre. It holds a AAA credit rating from Moodys and AA+ by Standard & Poor.
  • The Isle of Man is a self-governing Dependency of the British Crown. It is geographically part of the British Isles but is not part of the UK or the EU.
  • Follows London time, which puts it in a convenient time zone and is English speaking.
  • Is within easy striking distance of the major cities in the UK. In most cases it is possible to travel to the Island, attend meetings there and return the same day.
  • The Isle of Man has a well-established and well-regulated infrastructure for the provision of corporate administration services.


  • The Isle of Man is a common law jurisdiction and its company law is based on UK principles. Accordingly, City bankers and lawyers will find Isle of Man companies, documentation, practices and procedures familiar. In particular, the procedures for company borrowing and the registration of charges are similar to those prevailing in the UK.


  • An Isle of Man company listed on AIM should not be subject to UK tax as long as it is managed and controlled outside the UK. Needless to say, UK tax advice should be obtained in this respect.
  • With effect from 6 April 2006, the Isle of Man introduced a standard zero per cent rate of income tax/corporation tax for companies (except in relation to certain profits arising from banking, or from land and property in the Isle of Man). Under this regime, the Isle of Man continues as a tax neutral jurisdiction facilitating efficient international tax planning; however, the "ring-fencing" of international and local tax bases associated with tax exempt regimes has been eliminated in compliance with current international requirements in relation to tax competition.
  • There is no capital gains tax in the Isle of Man.
  • No stamp duty is payable on the transfer of shares.

The Isle of Man is subject to the same VAT regime as the UK.


  • Closed-ended investment companies are not regarded as regulated entities for the purposes of Isle of Man financial services regulation and, in particular, collective investment fund (mutual fund) regulation.
  • No prior Isle of Man regulatory approval is required to list an Isle of Man company on AIM.


Isle of Man Companies suitable for listing on AIM can be incorporated under two separate pieces of legislation:

  • The Companies Acts 1931 – 2004 (the "1931 Act"); and
  • The Companies Act 2006 (the "2006 Act"; a company incorporated under this Act is sometimes referred to as a "New Manx Vehicle" or "NMV").

Since the enactment of the 2006 Act, a number of listings have used companies incorporated under this Act and it is expected that this trend will continue. Advantages of the 2006 Act include the following:

  • In general, companies incorporated under the 2006 Act are simple, flexible and easy to administer.
  • The 2006 Act does not make the traditional distinction between public companies (plc) and private companies (Limited). Any company may offer its securities to the public. However, the name of any company may include the words "Public Limited Company" or "public limited company" or the abbreviations "PLC" or "plc". Indeed, there is the further option to use the words "Limited" or "Corporation" or "Incorporated" or the abbreviations "Ltd" or "Corp" or "Inc".
  • The directors are required to ensure any prospectus (called an "offering document") issued in relation to the company (i) contains all material information that investors would reasonably expect to be included in order to enable them to make an informed decision and of which the directors were aware at the time of issue of the offering document, or of which they would have been aware had they made such enquiries as would have been reasonable in all the circumstances; and (ii) sets out such information fairly and accurately.
  • The traditional concept of capital maintenance has been dispensed with. A 2006 Company may make a distribution (whether dividend or share buy back) or provide financial assistance or undertake other share capital reorganisations, provided a simple solvency test is met.
  • Companies incorporated under the 1931 Act remain available for use as listing vehicles in a suitable case, for example where there has been a previous listing under this Act and the promoters wish to replicate the same structure.

It is possible to establish an Isle of Man company (whether a 1931 Act Company or a 2006 Act Company) on a same-day basis. If necessary, a company can be formed with standard articles of association (or even taken "off the shelf") and suitable articles adopted later, prior to the listing.

Simcocks can prepare articles which meet the requirements of the AIM rules. The articles can have incorporated therein provisions (such as pre-emption and notification of interests in shares) which are not mandated by either the 1931 Act or the 2006 Act, thus ensuring that the company not only complies with the AIM rules but has the "look and feel" of a UK company.

Please also note that it is possible with the consent of the Isle of Man Department of Economic Development to re-domicile or migrate companies originally incorporated elsewhere to the Isle of Man (subject to suitable reciprocal legislation being in place in the overseas jurisdiction). In this respect, Isle of Man legislation exists for both 1931 Act companies and 2006 Act companies. Jurisdictions which allow migration out include Jersey, the British Virgin Islands and many civil law European countries. Migration is deemed not to create a new legal entity, or to prejudice or affect the continuity of the company which was formerly a company incorporated elsewhere and becomes an Isle of Man company.

It is not necessary for the prospectus/admission document to be submitted to any regulatory authority for prior approval in the Isle of Man. Accordingly, there is no question of the timetable to listing being delayed by approval in the Isle of Man having to be obtained.

As a corollary, the company may undertake a preliminary marketing of its shares on the basis of a pathfinder prospectus (with the usual "red herring" language appearing on its face) without any Isle of Man implications.

Isle of Man companies listed on AIM can use the CREST system to hold and transfer their shares and other securities in electronic or paperless form. The articles will provide for shares to be in uncertificated form and for title to be transferred by means of an instruction issued in accordance with the rules of the CREST system. An investor applying for shares may elect to receive them in uncertificated form if such investor is a system member (as defined in the Uncertified Securities Regulations 2005 (applicable to 1931 Companies) / Uncertified Securities Regulations 2006 (applicable to 2006 Companies) in relation to CREST.


Simcocks is a leading Isle of Man law practice. Our Investment Funds and Capital Markets team has an international background and provides a wide range of services.

Our experience in this field means we can give clients the expert and responsive service they need to enable matters to be concluded swiftly and effectively.

We offer a competitive service with all fee earners encouraged to take a realistic and commercial approach to addressing the needs of clients to ensure we add tangible value.

In a typical listing, we act in conjunction with the English legal advisers to the company and provide advice and assistance on all Isle of Man aspects of the transaction. Among other matters, we will draft or review and amend the Memorandum and Articles of the company; review the admission document to ensure compliance with Isle of Man law; review other documentation; and provide an Isle of Man legal opinion.

Post listing, we continue to act as required, including in relation to further fund raisings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions