Isle of Man Introduces New Companies Act
( Weber Shandwick )
(November 1, 2006)
Act offers new style corporate vehicle in Europe
The Isle of Man Treasury has announced today (1 November 2006) that the Isle of Man Companies Act 2006 ("The Act") has become Law. The Act which marks the biggest change in Isle of Man Company Law for seventy-five years was approved by the Island's Parliament, Tynwald, during the summer of 2006. Royal Assent was received on 14 October 2006.
The Act updates and modernises the Island's Company Law, by introducing a new simplified corporate vehicle into Isle of Man Law. It is a development of the international business company (IBC) model, available in a number of other international business centres and is fully in line with recognised benchmarks. The new vehicle is introduced alongside previous Isle of Man Company Legislation (the Companies Acts 1931-2004). Companies formed under the 1931 Act may also convert to the 2006 version in the future if they wish to.
The initiative was led by Isle of Man Treasury and involved extensive consultation with the Isle of Man's finance sector. The Act provides a streamlined process for setting up and running a company in the Isle of Man and complements the zero rate company tax strategy introduced in April 2006. This "corporate package" of legislation has been tailored for business, and has the flexibility to enable new applications of the corporate vehicle in line with future market developments.
Commenting on the new company structure, John Aspden, Chief Executive of the Financial Supervision Commission said, "The new Companies Act offers a simplified regime, including speed of incorporation, flexibility and ease of administration, whilst at the same time meeting key expectations in terms of disclosure and corporate governance".
Key elements of the new Act include:-
- Greater flexibility of use
- Simplified reporting
- Use of regulated corporate directors/one Director individual or corporate
- Use of registered agents, in place of company secretary (a role performed by licensed corporate service providers)
- Unlimited corporate capacity but restricted objects permissible
- No preclusion of financial assistance
- Pre-incorporation contracts can be adopted
- Simple merger and consolidation procedures
- Introduction of protected cell companies for general business use
- Simplified corporate redomiciliation from other jurisdictions
The Act has been designed for a range of corporate transactions. It is likely to be particularly useful for public offerings, securitisations, asset and project finance. It will extend the already significant number of Isle of Man incorporations that are handled by the Island's Law Firms and licensed Corporate Service Providers, both directly and on behalf of London based lawyers and brokers, in particular in connection with AIM admissions and the establishment of both open and closed-ended investment funds.
Commenting on the new Act, Allan Bell MHK, Treasury Minister of the Isle of Man, said "When combined with the Isle of Man's zero rate tax strategy and the existing benefits which the Island offers through our strong professional infrastructure, the new Act places the Island at the forefront of European domiciles for company structures and servicing."
Michael Shimmin, Chairman of the Isle of Man Association of Corporate Service Providers, added, "The new Act will bring the benefits of the recognised IBC style model into the European time zone. The new vehicle is therefore key to the business we are doing with the City of London and other major financial centres, enabling our legal, trust and fiduciary advisers to offer a state of the art product and service to corporates and their advisers."
- Ends -
Notes to Editors:
1. The 2006 Isle of Man Budget
The Isle of Man introduced a zero rate of corporate income tax from 6 April 2006 as part of a package of measures to stimulate the inflow of investment and business to the Island. The Budget further introduced a cap on personal income tax at a maximum level of œ100,000 per annum per individual, irrespective of earnings. The new 0% corporate tax regime is in accordance with the Island's promised five year strategic taxation plan announced in 2000.
2. About Isle of Man Finance
Isle of Man Finance is a division of the Treasury Department of the Isle of Man Government. It is responsible for assisting new financial services businesses to establish themselves on the Island, international media relations, international marketing and supporting existing Isle of Man financial services business.
For a copy of the Isle of Man Companies Act 2006 brochure please visit: http://www.isleofmanfinance.gov.im/
For information on the Isle of Man contact:
Hannah Jones, Weber Shandwick +44 (0)20 7067 0706 email@example.com
Ray Davies, Isle of Man Finance +44 (0)1624 686 406 firstname.lastname@example.org