Isle of Man: International Tax and Business Guide 1999 - The Investment Climate - 1.Introduction To The Isle Of Man

Last Updated: 25 August 1999


The Isle of Man is situated in the north of the Irish Sea between the Northwest of England, the Southwest of Scotland, and Northern Ireland. It has an area of 570 square kilometres (220 square miles) and is approximately 56 kilometres (35 miles) long and 20 kilometres (13 miles) wide at its broadest point.

Population and Language

The population of the Island is approximately 74,000, of whom about one-third live in Douglas, the capital. The spoken language is English.

Constitution and Law

The Isle of Man is not part of the United Kingdom, although its head of state as Lord of Man is the British sovereign, who is represented in the Island by a lieutenant governor. The Isle of Man is self-governing in all respects except foreign policy and defence, and has its own parliament, Tynwald, which claims to be the oldest legislative body in the world. Laws passed in the United Kingdom do not affect the Island unless specific clauses to that effect are inserted, in which case Tynwald will, where necessary, duplicate the British legislation with Acts of its own. The Island's legal system is largely based on that of England and Wales, and the influence of English case law is strong.

The taxation system in the Island is entirely separate from that of the United Kingdom, apart from value added tax which is charged in accordance with the same law that applies in the United Kingdom.

The Isle of Man has a special relationship with the European Union (EU). Under Protocol 3 of the United Kingdom's Treaty of Accession to the EU, the Island is within the EU but is effectively excluded from all provisions of the Treaty of Rome other than those relating to free trade in agricultural and industrial products within the Community. In particular, it is not subject to EU regulations aimed at the harmonisation of tax, corporate, and other laws, except where they concern the common customs tariff and some agricultural levies. The Island is a member of the OECD.


The Island's currency is the pound sterling (£ ), which is divided into 100 pence. The Isle of Man Government issues its own notes and coins; these are interchangeable in the Island with UK currency, but are not accepted in the United Kingdom other than by banks.


The Island's economy is dependent on international influences especially on the performance of the United Kingdom economy. Inflation and interest rates generally follow UK trends.

The Government has been instrumental in expanding the economic base from a dependence on tourism by encouraging growth in the financial sector and manufacturing with low rates of taxation, grants and loans available to new investors. The Island is now a particularly attractive location to high value added manufacturing concerns.

State ownership is limited to the electricity and water supplies, the airport and shipping terminal.


The Isle of Man is an established financial centre, particularly in the fields of banking and insurance.

The Manx government actively promotes the Island as a commercial and industrial centre. In addition to campaigns in the United Kingdom and Europe, the government has broadened its search for new investment. The establishment of a Freeport on the Island, the only one in Europe to be situated in a low-tax area, is encouraging investment from overseas.

Among the Island's advantages as a financial centre are its good communications with the United Kingdom, the relatively low cost of real estate (commercial as well as residential) and labour compared with the UK mainland and other offshore financial centres, its political stability, and the ready availability of expert financial, marketing, and other professional services. The Island, compared to some other offshore jurisdictions is relatively sparsely populated. It thus has plenty of space to enable further development. The Island, being an associate member of the European Union, also enjoys the advantages of a free trade area containing some 350 million people.

In addition, the Island can be used as a centre for the management and control of tax-exempt companies. Such companies, and any non-residents in receipt of benefits from them, are not liable to Manx income tax (see "Exempt Companies" under "Offshore Business"). Following the implementation of the Exempt Insurance Companies Act 1981, the Isle of Man also became an attractive location from which to operate insurance business, especially that of captive insurance companies (see "Exempt Insurance Companies").

Legislation also exists to exempt the whole or part of the profits or income of a managed bank from liability to income tax. (See tax exempt managed banks.)

Industrial developments with a high added value element (such as microelectronics) are particularly welcomed.

The information given is not exhaustive and is based on conditions existing at 5 May 1999. Readers are advised to consult with professionals, such as independent accountants, legal counsel, and investment bankers, before taking any formal action. Deloitte & Touche would be pleased to discuss specific problems.

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.