Isle of Man

advertisement
DOING BUSINESS IN THE
ISLE OF MAN
Stuart Foster – sfoster@burleigh.co.im
Basil Bielich – bbielich@burleigh.co.im
Browne Craine & Co
The Isle of Man
• Independent from UK but with
strong links
• 1000 year old Parliament makes
its own laws
• Diverse population of 80,000
• Traditional Industries – Farming
& Tourism
• Now –
Browne Craine & Co
International
Financial Centre of
Excellence
About the IOM: Easily Accessible
Serviced By Air:
Travel By Air
•16 Destinations
•Over 100 flights a day
•1 hour from London City
Browne Craine & Co
About the IOM: International Relations
UK
Europe
Rest of World
• Self governing
• Independent
• Financially independent
• Sterling currency
• Common Customs &
Excise Agreement - VAT
• EU Relationship
• Strong feedback IMF,
Browne Craine & Co
governed by Protocol 3
• Free movement of
goods
•Free movement of
people
• No contributions to or
receipts from EU
•EU Savings Directive
OECD, FATF
• International standard
regulation
• Good international
citizen
• Strong business links
• Independent
international
representation
About the IOM: A Proud History
• Oldest continuous parliament in the world – over 1,000
years
• Open consultative government
• Strong, stable economy – 25th straight year of economic
growth
• Infrastructure investment - over £1bn in health, education,
water, communications, power, etc
• Gaelic welcome – diverse population of languages and
cultures
Browne Craine & Co
Why Locate In The Isle of Man
“Simply put, we have all the elements that
can support business.
We believe in financial freedom, a strong
but pragmatic regulatory regime and giving
businesses freedom to flourish.
We have a stable political system, excellent
infrastructure, a strong economy and a
flexible work permit system.
People and businesses come to the Isle of
Man because they are made welcome and
because they can thrive.”
IOM Government Finance Department
Browne Craine & Co
World Famous for TT Races
World Class Economy: Business Friendly
• Total Bank Deposits of £50billion – Dec 2007
• 30,000 registered companies
• Well regulated financial industry
• Common law jurisdiction
• Zero percent corporate tax
• Tax cap for individuals
Browne Craine & Co
Tax Regime – Smart Taxation
• Tax system is EU Code of Conduct compliant
• Zero % rate for majority of corporations
• Low rates for individuals – maximum 18%
• Budgeted and sustainable tax strategy in a
robust economy
• Standard & Poor’s and Moody’s AAA sovereign
credit rating
Browne Craine & Co
Thorough Yet Pragmatic Regulation
• Commitment to quality business and the
reputation of the Isle of Man
• Regulators work in partnership with industry to
develop realistic best practices
• Policies developed from close work with OECD,
IMF, FATF etc.
Browne Craine & Co
International Profile of The Isle of Man
• Only Offshore financial centre with top ratings from OECD,
FATF and Financial Stability Forum
• IMF reports 2003 and 2008
• Financial Times award for Best International Territory - 2001
• Winner - Best International / Offshore Finance Centre Awards
2006
• Winner - European Financial Centre of the Future Awards 2005
(The Banker)
• Standard & Poor ‘AAA’ Rated
• FBI Compliments Island – February 2001
“…a well-regulated financial industry, money-laundering regulation
and…demonstrates the need for global law enforcement cooperation”
Browne Craine & Co
IOM: A Competitive Location
Cayman
Dublin
Channel
Islands
Isle of
Man
22
12
150
225
40,000
1.5 million
160,000
75,000
£1.2 million
£750,000
£600,000
£300,000
£55,000
£40,000
£40,000
£30,000
N/A
50%
30%
7%
3 months
N/A
1 month
4 days
Zero
12.5%
20%
(Changing)
Zero
Square Miles
Population
Detached House Price
Average Fund
Accountant Salary
Staff Turnover
Average length of
time for work/housing
permit
Corporate Tax Rate
Browne Craine & Co
Summary
A World Class Economy
• Self Governing Crown Dependency
• Stable & diversified economy
• Standard & Poor’s and Moody’s AAA Sovereign credit rating
• Political stable for 1000 years
• Diversified Sectors
A Place for Business
• Easy access to London & EU
• Common VAT area with UK and EU
• Tax neutral with 0% taxation for all corporations except banking activity 10% rate
• Corporate Re-Domicile provisions
• Leading Non UK AIM listing with GBP9.3bn
• Excellent IT and power
• Financial Assistance Scheme for new business
As
•
•
•
•
•
a Place to Live
Low personal tax rate (max 18%) with generous allowances
Excellent education systems
Flexible work permit system
Affordable housing
Low crime
Browne Craine & Co
Business Structures
• Companies
–
–
–
–
Standard Company
New Manx Vehicle
Limited Liability Company
Protected Cell Company
• Trusts
– Discretionary
– Life Interest
– Accumulation &
Maintenance
– Various Others
Browne Craine & Co
1931 Company
• The standard Isle of Man Company
• Each company has a memorandum and articles of
association (incorporation)
• Types include
–
–
–
–
–
Public companies, which must file accounts
Private companies, which cannot offer shares to the public
Companies limited by shares
Companies limited by guarantee
Unlimited companies.
• Commercial companies are usually limited liability
companies having a share capital.
Browne Craine & Co
New Manx Vehicle
• NMV, under the Companies Bill/Act 2005, will be possible
–
–
–
–
–
–
–
–
minimal registry filings
unlimited capacity, but restricted objects permissible
no capital maintenance requirements (subject to solvency)
no authorised capital
shares of no par value possible
redemptions and purchases of shares
distribution of income and capital possible (subject to solvency)
no financial assistance prohibitions
• in general
–
–
–
–
no annual return requirements
requirement for a registered agent
corporate directors permitted within certain limits
no prescriptive accounting requirements
Browne Craine & Co
Limited Liability Company
•
•
Based on the “Wyoming”legislation
Main purpose was for tax reasons
•
Popular as a simple form of business vehicle
•
The main characteristics of the LLC
–
–
Has limited liability and corporate personality
but is taxed as if it were a partnership.
–
–
the members can also manage the company
no separation of ownership and management as with other forms of company.
–
–
–
–
–
Liability is limited to the amount of capital contribution made by the members
there is no share capital as such.
Members have the right to manage the LLC in relation to their capital contribution or they can appoint a
manager
There are no Directors
Taxation
–
–
–
LLCs may exist for an unlimited period
Automatically be wound up on the death, resignation or disqualification of a member
If there are two or more members remaining then they can resolve to continue
•
•
members pay income tax on their share of the profits, however
if the LLC is owned by non-resident members and has no Manx-sourced income then it may be exempt from all
Manx taxation.
Browne Craine & Co
UCTION
Protected
Cell Company
CELL
CELL
CELL
CORE
CELL
Browne Craine & Co
CELL
Protected Cell Companies (PCCs)
•
Basically a standard company limited by shares
– Separated into legally distinct ‘cells
– Each cell has its own proportion of the overall share capitalof the PCC,
– Each cell’s assets, liabilities and tax liabilities are kept separate from each other cell.
– Shareholders can own an entire cell but at the same time only own a small proportion of the PCC as a
whole.
•
•
•
The PCC is a separate legal entity.
The separate cells created by the PCC do not become legal entities separate from the PCC itself.
Cells are created by the PCC for the purpose of protecting ‘cellular’ assets using the provisions contained in
the PCC Act.
Cellular assets are the assets represented by the proceeds of cell share capital, and all other assets
attributable to the cell.
Initial use
– Captive insurance
– Funds
– Collective investment schemes
– PCC structures can be particularly useful in allowing ring
Useful
– Ring fencing of individual client or intermediary assets
– Provides a layer of risk management not afforded to these schemes previously, and this could prove to
be attractive to high net worth clients.
•
•
•
Browne Craine & Co
Accountancy and Auditing
• Recognised bodies
– The Institute of Chartered Accountants in England and
Wales;
– The Institute of Chartered Accountants in Scotland;
– The Institute of Chartered Accountants in Ireland.
– The Chartered Association of Certified Accountants; and
– The Chartered Institute of Public Finance and Accountancy.
• Financial Supervision Commission may authorise a person to
act as an auditor of a private company.
Browne Craine & Co
Audit Exemption
• Criteria is similar to those used in the United
Kingdom.
• A company can be an audit exempt company if
it meets two of the following criteria:
– its annual turnover is £5.6million or less;
– its balance sheet total is £2.8million or less;
– its average number of employees is 50 or fewer.
Browne Craine & Co
TAXATION
Browne Craine & Co
TAXATION - Principle Taxes
• DIRECT TAX =INCOME TAX
• Resident individuals and companies are subject to Manx income tax on their
worldwide income.
•
INDIVIDUALS
•
Corporate
» BASIC RATE AT
» HIGHER PERSONAL RATE
» CAPPED per individual
» STANDARD RATE
» BANKS
» PROPERTY COMPANIES
Browne Craine & Co
10%
18%
£100,000-00
0%
10%
10%
TAXATION - Indirect Taxes
• Value added tax
–
–
–
–
Basic rate
Low rate
Zero Rate
Exemptions
17.5%
5%
Outside United Kingdom
• Customs and Excise duties
Browne Craine & Co
TAXATION - Other
• Isle of Man does not levy:
– Corporation tax or advance corporation tax
– Capital gains tax
– Capital transfer or gift taxes
– Wealth taxes
– Stamp duties
– Death, estate or inheritance tax
Browne Craine & Co
Alternative Investment Market (AIM)
• Isle of Man- over 50 companies listed on AIM
• 15 companies in the AIM 100
• The Isle of Man has more high performing
companies listed than any jurisdiction other
than the UK (the next jurisdiction only has 6).
Browne Craine & Co
Alternative Investment Market (AIM)
•
•
•
•
General rate of corporate income tax 0%
No capital gains or stamp transfer taxes
Not a regulated entity
Shares can be traded through CREST without the need to use depositary
receipts
• NMV is a new simple and flexible corporate structure
– Removal of capital maintenance requirements
– Less prescriptive prospectus requirements
• The Isle of Man is a common law jurisdiction in which company and trust
law is closely aligned to that of England and Wales
• Security concepts are the same as in England and Wales
• The provision of company administration services is a regulated activity on
the Isle of Man
Browne Craine & Co
The quality international AIM
vehicle
•
•
•
•
•
•
Lawyers increasingly using IOM
Capacity for new business
Speed and flexibility
Highly cost effective
Strong skill base/fund expertise
Reputation for quality – key to Institutional
Investors
• ….a growing success story…
Browne Craine & Co
The Browne Craine Group
Browne Craine & Co
Browne Craine & Co
• Newest member of TIAG
– April 2008
• Over 25 years of success
• Wide variety of services
& clients
• Based in the Isle of Man
Browne Craine & Co
Our Offices – Burleigh Manor, Douglas, Isle of Man
PEREGRINE CORPORATE SERVICES
PROVIDING HIGH QUALITY BESPOKE SERVICES TO
COMPANIES AND TRUSTS SINCE 1986
Browne Craine & Co
PEREGRINE CORPORATE SERVICES
THE SERVICES
• Companies
– Incorporations
– Fully managed
– AIM listings
• Trusts
– Establishment
– Provision of Trustees
Browne Craine & Co
COMPANIES
Why Isle of Man?
• Zero % Tax for majority
• VAT registration as though UK
• A strong reputation
• Access to EU markets
• IOM resident directors not
required
• Robust regulation
Browne Craine & Co
IOM COMPANIES - USES
• TRADING
• INTELLECTUAL PROPERTY
• HOLDING
• SHIPPING / YACHTS
• CONSULTANCY
• PRIVATE AIRCRAFT
• PROPERTY
• FINANCING
Browne Craine & Co
Consultant / Sportsperson / Entertainer
IOM
Company
Invoice
Funds
Funds
Non-resident
Individual
Browne Craine & Co
Country
X
Case Study - Consultancy
Performer / Sportsman / Consultant
• Individual works on several short term contracts
all over the world.
• IOM company bills their clients – incl VAT if
required.
• IOM company pays no tax on income.
• IOM company distributes profits as and when
required to shareholders.
• Depending on tax rules in home country, profits
can accumulate tax free in IOM company.
Browne Craine & Co
Trading Company
Country
B
GOODS
Invoice
Invoice
Funds
Browne Craine & Co
Country
A
IOM
Company
Funds
Case Study – Trading Company
International Trading Company
• Goods sold from Country A to Country B.
• IOM company issues invoice Country B.
• Country A invoices IOM company at lower
price.
• Profit is isolated in IOM Company at 0%
tax on profits
• Care required – Transfer Pricing / CFC’s
Browne Craine & Co
Property Company
IOM
Company
Purchase
Rental Income
Finance
IOM
Bank
Browne Craine & Co
UK
Property
Case Study – Property Company
Property Company
UK Shareholder invests in an IOM company to purchase UK
property as he plans to leave UK in future.
• IOM company borrows from a bank in IOM – several major
banks & many contacts.
• IOM company pays no tax on rental income in IOM, but
will pay tax in UK – Peregrine area of expertise.
• Property sold in future when shareholder has left UK.
• No capital taxes on disposal for IOM company.
• Depending on tax rules in new country of shareholder,
capital taxes may be avoided.
Browne Craine & Co
Shipping and Aircraft Registers
Browne Craine & Co
Shipping register
• Historical shipping register, since 1786
• 1984 – established as an International
Register
• Developed and respected shipping sector
• Steady growth of register and sector
• 2003 – introduction of commercial yachts
• Developing yacht sector
• Centre of excellence – ships and yachts
Browne Craine & Co
Growth of shipping register
450
Superyachts
No of Vessels
Ships
400
350
300
250
200
150
100
50
Year
0
1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
Browne Craine & Co
Why Isle of Man?
•
•
•
•
•
•
•
•
•
Political and Economic stability
Secure financial Jurisdiction
Quality of Register and shipping centre
Low cost – no annual dues
Corporate vehicles and tax structures
Supportive and pro-active government
Customer focused registry/survey teams
Pragmatic approach to regulation
British Flag which is not the UK
Browne Craine & Co
Aircraft Register
•
Planned in 2005 - to mirror and complement Isle
of Man register for commercial yachts
•
Opened for business 1 May 2007
•
Private & corporate only, not commercial air
transport
•
Offers unique M-registration (e.g. M-MANX)
•
No insurance premium
•
European time zone
•
Helpful, flexible and pragmatic approach
•
Cost effective and high quality register
Browne Craine & Co
Where Next?
•
•
Space industry – Public & Private
•
IOM owns satellite orbiting slots
•
Space University in IOM
Forward-thinking attitude of
Government & Industry
Browne Craine & Co
COMPANIES – OUR SERVICES
• Incorporation of companies
• Full management & control
OR
• Incorporation & support
• Not just IOM, other
international companies
• 5 qualified accountants as directors of your company
• Well regulated location with strong reputation
• Provision of directors/services to AIM listed
companies
Browne Craine & Co
TRUSTS - INTRODUCTION
• Used since 10th Century
• Wealth protection
• Assets entrusted to
associates = TRUSTEES
• Trustees act for the benefit of
the BENEFICIARIES
• Legally recognised
arrangement
Browne Craine & Co
TRUSTS - STRUCTURE
SETTLOR
Assets
TRUSTEES
Browne Craine & Co
Can decide
BENEFICIARIES
TRUSTS – USES
• Estate and inheritance planning – avoid probate
• Provision for family members/employees
• Protection of assets
• Tax advantages if long term financial gains
expected
• Charitable reasons
Browne Craine & Co
TRUSTS - DIFFERENT TYPES
• Discretionary - letter of wishes
• Interest In Possession – life tenant
• Accumulation & Maintenance – children &
grandchildren
• Purpose Trusts – Law since 1996, Independent
enforcer required
• Will Trusts – additional inheritance planning
Browne Craine & Co
TRUSTS – Case Study
SETTLOR
Grandparent
Assets
TRUSTEE
Trust Fund
Lifetime Income
BENEFICIARY
Children
Browne Craine & Co
Assets
On Death
BENEFICIARY
Grandchildren
TRUSTS – CASE STUDY
• SETTLOR - Grandparents settle investments into
Trust
• TRUSTEES - Become legal owners and take
responsibility for investments.
• Settlor provides guidance to Trustees via a Letter
of Wishes
• Income from investments used to provide regular
income to children during their life - BENEFICIARY
• Upon death of children, assets pass to
Grandchildren - BENEFICIARY
Browne Craine & Co
TRUSTS – WHY ISLE OF MAN?
•
•
•
•
•
•
Trust service providers regulated
High standards and expertise
History of Trust law – Statute & Common law
Foreign laws re transfer of assets excluded
No statutory requirement to notify beneficiaries
No Tax providing no Manx income or beneficiaries
Browne Craine & Co
TRUSTS – OUR SERVICES
•
•
•
•
Establishment of Trusts
Provision of Trustees
Expertise & Experience
Access to legal advice
Isle of Man:
- Supportive legislation
- History of Trusts
- Centre of expertise
Browne Craine & Co
MORE INFORMATION
www.brownecraine.com
www.peregrine-iom.com
www.bces.co.im
www.gov.im/dti/
Browne Craine & Co
CONTACTS
Basil Bielich – bbielich@burleigh.co.im
Stuart Foster – sfoster@burleigh.co.im
Craig Mitchell – cmitchell@burleigh.co.im
Maurice Singer – msinger@burleigh.co.im
David Craine – dcraine@burleigh.co.im
Browne Craine & Co
Download