Located in the Irish Sea between Ireland and Great Britain, the Isle of Man is a very popular destination for many who plan to set up an offshore company. The Isle is self-governing, although they are a dependant of Britain, and the head of state is still Queen Elizabeth. They utilize British law to govern the citizens, and they happen to have some of the most advantageous tax rules for offshore companies.
The main tax Benefits for Offshore Companies on the Isle of Man can be summarized below.
1. No capital gains tax, wealth tax, inheritance tax, or stamp duty. The highest rate of income tax is 20%, and the corporate tax is 0%, making it a natural place for companies searching for an alternative tax jurisdiction. Of course, there are some exceptions to this rule, but they will not apply to most businesses. For example, banks pay taxes at 10%. Also the rental of buildings, and income derived from buildings and land on the Isle of Man are taxable.
2. The dividends paid to nonresidents have 0% tax on them, and double tax relief is available for any foreign paid taxes. There is no withholding tax, and losses can be carried forward in perpetuity. These are the tax benefits that help to make the Isle of Man such a great jurisdiction for offshore companies. It offers some other benefits as well which are shown below.
3. The area is stable, and is not in any type of economic turmoil that could cause problems for the companies that decide to incorporate in the Isle of Man. The Isle of Man is stable politically as well, and that political stability helps to improve the overall stability of the jurisdiction. They have a high quality banking system that understands how to work with offshore companies located there.
4. The Isle of Man is not part of the EU. They have a customs and excise agreement with the UK, which can make it easier to trade with the EU if that is a part of the company’s goals. With so many territories in the European Union, it makes sense to set up a company on the Isle of Man for easy trading opportunities.
Setting up a corporation on the Isle of Man is relatively fast and easy as well. It usually takes about three to five days after the company name receives approval from the Companies Registry. It is important to keep in mind that the company needs to end with certain terms, including PLC, Public Limited Company, Ltd., or Limited. Even if there is just a single shareholder, with just a single share, it is possible to incorporate the company. They can also have just a single director, and the director does not have to be a resident of the Isle of Man.
As you can see, the Isle of Man offers a wealth of benefits that makes it an ideal location for many businessmen looking to set up an offshore company.