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IN133 - The New Manx Corporate Vehicle
The Isle of Man Companies Bill 2006 is expected to get Royal Assent and become law by 1st November 2006.
The Companies Bill, together with the Isle of Man zero corporation tax rate, should ensure that the Isle of Man further enhances its attractiveness as a commercial centre.
Zero Rate Corporation Tax
A zero rate of corporation tax applies to the profit declared in the accounts that form the basis of a company’s 2006/07 income tax assessment. A corporate tax charge of £250 per annum is payable to the Government.
The only exceptions to the zero rate are the following sources of income which, if received by a company, will be taxed at a rate of 10%:
- Banking profits
- Land and property in the Isle of Man (property development, rental/letting, mining and quarrying)
There is a deemed distribution tax charge, but this does not apply to non-residents of the Isle of Man or to companies owned by non-residents.
Isle of Man Companies Bill 2006
This bill provides for a new Manx corporate vehicle that will co-exist with present and future companies incorporated under the existing Companies Acts 1931 to 2004, or formed under the Limited Liability Companies Act 1996. The bill makes Isle of Man companies more flexible and easier to manage.
Key features of the new Manx corporate vehicle are:
- Zero rate of corporation tax
- No requirement for local directors
- No public filing of accounts
- Reduced compulsory filings with the Companies Registry
- Corporate directors permissible within certain limits
- No annual general meeting requirement
- A requirement for a registered agent in the Isle of Man
- No company secretary is required
- Less prescriptive accounting requirements
- Protected cell companies are permissible
- There is a simple re-domiciliation procedure
- No financial assistance prohibitions
- Redemptions and purchase of shares and distributions of income and capital are possible, subject to solvency
- Shares of no par value are permitted
- No authorised share capital requirement
- No capital maintenance requirements, subject to solvency
- Unlimited capacity but restricted objects permissible
- Single member companies permissible
- Ability to adopt pre-incorporation contracts
- Simplified procedure for dissolving solvent companies
Dixcart will issue a comprehensive Jurisdiction Note relating to new Isle of Man companies as soon as the bill receives Royal Assent and becomes law.
Additional Information
For further information please speak to Simon Kelly of Dixcart in the Isle of Man, Laurence Binge at Dixcart International Limited in the UK or your usual Dixcart contact.