Isle of Man
Country code – IM
Legal Basis – Common law
Legal framework – Foundations Act, 2011
Regulatory board - Isle of Man Department of Economic Development
Entity – Foundation
Liability - An Isle of Man foundation has its own separate legal personality, the properties and resources of it constitute an independent patrimony from that of the Founders, the Foundation Council members, Protector, and Beneficiaries.
Dedication of assets – An Isle of Man Foundation does not require an initial dedication of assets.
Founder – The founder is who establish the Foundation, it may be a legal or a natural person.
The founder may reserve rights within the rules of the foundation, for example, a power to amend, revoke or vary the objects of the foundation, to appoint and remove council members or beneficiaries, or a requirement that his consent is obtained before the council carries out certain actions. Such rights may also be granted to third parties.
The founder can be a member of the foundation council and reserve powers to himself, be a beneficiary or an enforcer of the foundation. Its details are not publicly disclosed.
Foundation Council – The Foundation Council’s role is to administer the foundation’s property and to ensure that its objects are met. The council must consist of at least one member, which may be a corporate entity. There is no requirement that council members must be located in the Isle of Man. The members of the council must act in good faith and in the best interests of the foundation. The council members must also exercise the care, due diligence and skill that a reasonably prudent person would exercise in comparable circumstances Name and address of Council Members are publicly disclosed.
Enforcer – Enforcer is only required for foundations with a non-charitable purpose object. Otherwise, an enforcer is optional. An enforcer may be a natural person or a corporate body. The purpose of the enforcer is to ensure that the objects of the foundation are met. The founder may also be the enforcer.
Beneficiaries – A beneficiary has no automatic interest in the assets of a foundation. A beneficiary may, however, become entitled to a benefit under the foundation at such time and to such extent as may be provided for in the Instrument and Rules.
The beneficiaries of the Foundation have the right to confidentiality. Information cannot be disclosed to a third party without the express or implied consent of a beneficiary. Corporate bodies or natural persons may be beneficiaries.
Beneficiaries' Right to Information - Beneficiaries have a right to certain information, which right can be disapplied by the foundation rules, in which case the beneficiary may apply to the court for the information.
Registered Agent – Every foundation is required to have a registered agent which is the holder of a Class 4 license issued by the Isle of Man Financial Services Authority under the Financial Services Act 2008.
Foundation Instrument - The Instrument is the major constitutional document of a foundation and, amongst other things, sets out the objects of the foundation. The foundation instrument states the name of the foundation; its objects; the names and addresses of the council members; and the name and address of the registered agent.
The instrument document is publicly available.
Foundation Rules – The Rules is a private document that governs how a foundation operates constitutionally.
The rules of the foundation must make provision for the establishment of the council, the appointment, retirement, removal, and remuneration of council members, the functions of the council and how council decisions are to be made; the appointment, retirement, removal and remuneration of the registered agent; if the foundation is to have an enforcer, the appointment, retirement and remuneration of the enforcer and what his functions are; a record of all dedications of assets to the foundation; how the assets of the foundation are to be applied on winding-up; and if the foundation is to be wound up after a fixed period or on the happening of a particular event, or if a person has the right to have the foundation wound up, details of that period, event or right.
The rules may also provide for other matters relevant to the foundation, as the addition and removal of beneficiaries; the means by which amendments to the foundation instrument and the rules may be made; and the appointment, retirement, removal, and remuneration of any other office- or powerholders.
Re-domiciliation – A foundation established in another country may continue in the Isle of Man (if permitted under the law of the other country), and vice versa. The administration fee to continue in the Isle of Man is £100; to discontinue in the Isle of Man the fee is £550.
Mergers - Treasury may make regulations in respect of the mergers of foundations.
Charitable/Philanthropic Purposes - Permitted.
Compliance – The foundation must retain the following documents and records within the Isle of Man: up-to-date copies of the foundation instrument and foundation rules; a register showing the names and addresses of the council members; records sufficient to show and explain its transactions, including minutes of meetings of the council and resolutions of the council; a record of the appointment of any enforcer - the name, address and date of appointment; records that disclose, with reasonable accuracy, its financial position; and a register of the names and addresses of all dedicators to the foundation.
The foundation must maintain reliable accounting records which are sufficient to allow financial statements to be prepared. If a foundation has not prepared financial statements for a continuous period of eighteen months or more, a person with sufficient interest may demand that financial statements be prepared for that period.
- Corporate founder permitted
- Corporate council members permitted
- Protector/Guardian required
- Local regulated person required
- Founder not disclosed in a public registry
- Council members not disclosed in a public registry
- Protector/Guardian not disclosed in a public registry
- Beneficiaries not disclosed in a public registry
- Beneficiaries have right to information
- Merge permitted
- Redomiciliation permitted
- Charitable purposes permitted
- Registered agent required
- Common law Legal basis
- - Initial endowment of assets
- 1 Minimum council members
- £100 Registration fee
- £380 Annual government fee
- 2018 AEOI
In the Isle of Man, a foundation is treated as a corporate taxpayer for income tax purposes.
Corporate tax standard rate is 0%.
Income from real property located in the Isle of Man is subject to 20% tax.
Capital Gains are exempt from taxation.
Dividends received from resident or non-resident entities are generally subject to 0% tax.
Interest and royalty income is taxed at standard rate of 0%.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 0% Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 1 Losses carryback (years)
- Indefinitely Losses carryforward (years)
- 20% Personal Income Tax Rate
- 20% VAT Rate
- 0 Tax Treaties
The Isle of Man is a British Crown Dependency formed by the main island and some islets located in the sea of Ireland, between Ireland and Great Britain. The sovereign is the British monarch, as lord of Man, who is represented by the governor-general. Its international representation and defense are the responsibility of the Government of the United Kingdom.
Like all other dependencies, it is not part of the United Kingdom, neither the European Union nor the European Economic Area. Although it does belong to the customs union of the European Union, thus benefiting from the free movement of industrial and agricultural goods.
As a member of the Common Travel Area, the free movement of citizens of the European Economic Area is also permitted.
The island is 572 sq. km. in extent and low elevation above sea level, with 621 meters of maximum altitude on Snaefell mountain. Around the main island, there are a few small islands such as Calf of Man, St Patrick, and St Michael.
The Isle of Man has about 80,000 inhabitants, of whom 26,000 reside in the island's capital, Douglas.
The English language is spoken by almost the entire population of the island and is also the official language. Manx Gaelic is the historical language and was traditionally spoken, but today there are few who speak fluently or on a daily basis.
The Isle of Man Pound is the official currency, which is not an independent monetary unit but is a special pound sterling (GBP) issued for the island.
The Isle of Man has a completely independent government, parliament elected by universal suffrage (Tynwald) and judicial system. The executive power of the island is in charge of the General Minister and his or her Council of Ministers. The General Minister is nominated by Tynwald after each general election.
Financial services are the main economic sector. Banking, insurance, financial and offshore business services alone constitute more than a third of the island's GDP. Recently, it has been opened an office of the International Stock Exchange to boost the financial industry of the island.
Manufacturing, tourism, and more recently gambling are other key sectors of its economy. Agriculture and fisheries, traditionally the major sectors, are currently relatively small in the Manx economy.
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