Isle of Man: New IOM Regime For Foreign Companies

Last Updated: 26 November 2014
Article by Andrew Webb

Before the Foreign Companies Act 2014 (Act) came into force on 1 July 2014, companies incorporated outside the Isle of Man carrying on business in the Island which had established a place of business in the Isle of Man, were registered under Part XI of the Companies Act 1931 (Part XI).

The provisions of Part XI had been amended from time to time to legislate against perceived abuses by foreign companies. For example, the deeming requirement enacted by the Companies Act 1968 that the holding of land constituted the establishment of a place of business dates back to the massive residential developments of the late 1960s when details of corporate absentee landowners were required. It was also designed to ensure so far as possible that creditors had a local remedy, by requiring the name and address of a local person for service of process and notices. Plainly, in a small jurisdiction the opportunity for fly-by-night operators is considerable and Part XI went some way to monitor foreign business activity. However, Part XI was difficult to interpret and there was a clamour for its reform.

The Foreign Companies Act 2014

The Act purports to be an overhaul of Part XI; however, a number of provisions are still referential. For example, the registration of charges provisions in Part III of the Companies Act 1931 (1931 Act) still apply without any policy change. It is noteworthy that the United Kingdom equivalent legislation has abolished the requirement for foreign companies to register charges. The Act applies to foreign companies as well as foundations and limited partnerships; indeed any entity with a separate legal personality not incorporated in the Isle of Man. There is also the novel addition of an election, allowing a foreign entity which is not conducting business from an established place of business or holding land in the Isle of Man but which has established another nexus with the Island, to elect that the provisions of the Act apply. The Act helpfully includes a list of circumstances of when a foreign company is not, by reason only of one or more of those circumstances applying, to be treated as carrying on business from an established place in the Island.

Oddly, these same circumstances will also permit a foreign company to claim that it has established a nexus with the Isle of Man and thereby allow it to elect to be treated as a company to which the Act applies and make an application for registration. This is counter-intuitive, the listed circumstances not being sufficient in themselves to require registration and yet sufficient to establish a right of election to register. The expression "established place of business" which has caused so much difficulty over the years remains undefined in the Act.

Applications for Registration

Applications for registration must be made within one month of the legislation applying to an entity. A foreign company which chooses to elect to register under the Act where registration is not mandatory is required to make an application within one month of that election. The nature of an election is that time will only begin to run when the applicant itself decides it should run.

The Act introduces a power allowing the Department of Economic Development (Department) to refuse to register documents. This includes where a document does not comply with the legislation or the regulations made under it. Where a document is rejected it will be treated as not submitted, this makes it critical to ensure that the application for registration and any other documents submitted are formally correct, so as not to be in default of the one month filing requirement. There is no power for the Department to make concessions for clerical errors giving rise to rejection and in principle the penalties contained in the legislation will apply.

Foreign companies are no longer required to submit their constitutional documents, only basic registered details of the company; company name and number, jurisdiction of incorporation, date of incorporation and the address of the established place of business or address of land it holds in the Island. This may make enquiries difficult for the creditor or consumer who needs further information from abroad. A foreign company is still required to make an annual return, failure to submit within the required time represents an offence and the foreign company may be removed from the register.

Service of Process

With one exception, a foreign company must ensure that it is able to accept service of process and notices in the Island. Oddly, a significant change is that a foreign company which holds land in the Isle of Man is no longer deemed to have established a place of business in the Isle of Man but is still required to register as a foreign company. In those circumstances it is required either to provide an address in the Isle of Man or by way of exception to the rule, outside of the Isle of Man for service. This change has not been reflected in the amendments to the Rules of High Court of Justice (Rules) contained in the Schedule to the Act. These provide that where a foreign company has no address for service, a document must be left at the address of the person who is authorised to accept service under the legislation or at any place of business within the jurisdiction. This does not catch foreign companies registered by reason of holding land in the Island which according to the Act do not have a place of business and have not provided an address on the Island. A creditor would therefore have to obtain service out of jurisdiction upon the overseas address, returning the legislation to the position which prevailed before the Companies Act 1968. This seems a retrograde step for creditors or consumers where foreign companies owning land in the Island choose not to provide a local address for service.

Notification of Events

The Act makes provision for the notification of certain events; such as change of address. It also requires notification of the appointment of a liquidator or receiver over assets under the laws of a jurisdiction outside the Island. Under local law, section 238 of the 1931 Act, as applied by Part X (another referential provision) requires a liquidator to register a notice of his appointment with the Department within 21 days after his appointment. There is no similar provision for notification of the appointment of a receiver appointed under Isle of Man law. Better consumer protection would be achieved if an appointment had to be notified in all cases, irrespective of the jurisdiction in control of the appointment.


It remains to be seen whether creditor and consumer rights have been adequately protected under the new regime in pursuing the endeavour to reduce administration for foreign companies.

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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.