Hon. Allan Bell MHK, Treasury Minister
The launch of the Isle of Man Companies Act 2006 - developed from accepted international business company principles - marks the biggest change in Isle of Man company law for seventy-five years. This modern, cost-effective vehicle for business incorporation has been specifically designed for today's fast-moving and sophisticated global market and is a testament to the excellent working relationship the Government and the private industry enjoys in that it has been developed in close cooperation.
Coupled with the Island's strong professional infrastructure and its new zero rate tax strategy, this new legislation places the Island at the forefront of European domiciles for company structures and servicing.
I believe that its flexibility and simplicity will result in it becoming 'Europe's corporate vehicle of choice' Treasury Minister, Allan Bell said.
The Isle of Man's new streamlined corporate product provides for:
- One director, individual or corporate;
- Registered agent, in place of secretary;
- More flexible annual returns;
- Unlimited corporate capacity but restricted objects permissible;
- No preclusion of financial assistance;
- Pre-incorporation contracts can be adopted;
- Relatively simple merger and consolidation procedures;
- Relatively simple transfer of domicile procedures;
- Protected cell companies permissible.
Quality jurisdictions like the Isle of Man are playing an increasingly important role in the highly competitive international business industry. Business is not attracted by any one single factor - but rather an overall package of benefits including the calibre and depth of professional services on offer coupled with its costeffectiveness, fiscal and in some cases quality of life considerations.
The Isle of Man therefore strives to make itself a centre of excellence in all these respects - including the protection afforded by its regulation, where bona fide business can be undertaken through specialist intermediaries working to high standards of conduct and professionalism.
The Island has enjoyed an enviable combination of high growth, stable prices and considerable increases in employment opportunities over the last decade. The period since the mid-90s has seen a particularly impressive performance with real growth averaging around eight per cent per annum between 1997 and 2004. This rate of growth has now stabilised, but it is estimated that the economy is still expanding at around six per cent per annum. Per capita income is now six per cent higher than that of the UK and 15 per cent higher than the EU15 average.
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In this year's Budget, a standard zero rate of income tax for business (10 per cent for deposittaking and property development) was introduced and a maximum tax liability of £100,000 on personal incomes to encourage entrepreneurs to the Island. A key element of the Island's fiscal strength is the self-imposed legislative requirement that Government must budget for a surplus in respect of its annual revenue spending. Its success in achieving such surpluses has been critical in obtaining and retaining top 'triple A' credit ratings from both Standard & Poor's and Moody's as well as enabling it to put in place its zero corporate tax strategy. But we haven’t stopped there. We have just completed a consultation exercise to discuss with the Island’s industry the possibility of introducing a corporate tax-cap on Island businesses that retain a corporate tax liability. This move would firmly place the Island in the minds of corporate group business as a strategic location for their business operations.
The key sectors leading this impressive performance have been the Island's blue chip financial and professional services - the former doubling in the past six years alone. The offshore markets continue to thrive and clear opportunities exist in the areas of personal asset and wealth management, corporate finance, offshore financial planning for expatriates, funds administration and fiduciary services. The launch of the Isle of Man's new Companies Act complementing the standard zero rate of business tax - will further underscore our attractiveness to international finance and demonstrate our determination to remain at the cutting edge of the global industry.
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