1. DOING BUSINESS IN THE ISLE OF MAN
Stuart Foster –
Basil Bielich –

2. 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 – International Financial Centre of Excellence

3. About the IOM: Easily Accessible
Serviced By Air:
Travel By Air
16 Destinations
Over 100 flights a day
1 hour from London City

4. About the IOM: International RelationsUK
Europe
Rest of World
Self governing
Independent
Financially independent
Sterling currency
Common Customs & Excise Agreement - VAT
EU Relationship governed by Protocol 3
Free movement of goods
Free movement of people
No contributions to or receipts from EU
EU Savings Directive
Strong feedback IMF, OECD, FATF
International standard regulation
Good international citizen
Strong business links
Independent international representation

5. 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

6. 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
World Famous for TT Races

7. 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

8. 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

9. 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.

10. 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
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 co-operation”

11. IOM: A Competitive Location
Cayman
Dublin
Channel Islands
Isle of Man
Square Miles 22 12
150
225
Population
40,000
1.5 million
160,000
75,000
Detached House Price
£1.2 million
£750,000
£600,000
£300,000
Average Fund Accountant Salary
£55,000
£40,000
£30,000
Staff Turnover
N/A
50%
30% 7%
Average length of time for work/housing permit
3 months
1 month
4 days
Corporate Tax Rate
Zero
12.5%
20% (Changing)

12. 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

13. Business Structures Companies Trusts Standard Company New Manx Vehicle
Limited Liability Company
Protected Cell Company
Trusts
Discretionary
Life Interest
Accumulation & Maintenance
Various Others

14. 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.

15. 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

16. Limited Liability Company
Based on the “Wyoming”legislation
Main purpose was for tax reasons
Has limited liability and corporate personality
but is taxed as if it were a partnership.
Popular as a simple form of business vehicle
the members can also manage the company
no separation of ownership and management as with other forms of company.
The main characteristics of the LLC
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
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.
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

17. Protected Cell Company
UCTION
CELL
CELL
CELL
CORE
CELL
CELL

18. 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.

19. 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.

20. 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.

21. TAXATION

22. TAXATION - Principle Taxes
DIRECT TAX =INCOME TAX
Resident individuals and companies are subject to Manx income tax on their worldwide income.
INDIVIDUALS
BASIC RATE AT 10%
HIGHER PERSONAL RATE 18%
CAPPED per individual £100,000-00
Corporate
STANDARD RATE 0%
BANKS 10%
PROPERTY COMPANIES 10%

23. TAXATION - Indirect Taxes
Value added tax
Basic rate 17.5%
Low rate 5%
Zero Rate Outside United Kingdom
Exemptions
Customs and Excise duties

24. 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

25. 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).

26. 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

27. 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… 27

28. The Browne Craine Group

29. Our Offices – Burleigh Manor, Douglas, Isle of Man
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
Our Offices – Burleigh Manor, Douglas, Isle of Man

30. PEREGRINE CORPORATE SERVICES
PROVIDING HIGH QUALITY BESPOKE SERVICES TO COMPANIES AND TRUSTS SINCE 1986

31. PEREGRINE CORPORATE SERVICES
THE SERVICES
Companies – Incorporations
– Fully managed
– AIM listings
Trusts – Establishment
– Provision of Trustees

32. 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

33. IOM COMPANIES - USES TRADING HOLDING CONSULTANCY PROPERTY
INTELLECTUAL PROPERTY
SHIPPING / YACHTS
PRIVATE AIRCRAFT
FINANCING

34. Consultant / Sportsperson / Entertainer
IOM
Company
Country X
Invoice
Funds
Funds
Non-resident
Individual

35. 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.

36. Trading Company Country B Country A IOM Company GOODS Invoice Invoice
Funds
Funds

37. 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

38. Property Company IOM Company UK Property IOM Bank Purchase
Rental Income
Finance
IOM
Bank

39. Case Study – 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.

40. Shipping and Aircraft Registers

41. 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

42. Growth of shipping register

43. 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 43

44. 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 44

45. Where Next? Space industry – Public & Private
IOM owns satellite orbiting slots
Space University in IOM
Forward-thinking attitude of Government & Industry 45

46. 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

47. TRUSTS - INTRODUCTION Used since 10th Century Wealth protection
Assets entrusted to associates = TRUSTEES
Trustees act for the benefit of the BENEFICIARIES
Legally recognised arrangement

48. TRUSTS - STRUCTURE
SETTLOR
Assets
Can decide
TRUSTEES
BENEFICIARIES

49. 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

50. 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

51. TRUSTS – Case Study SETTLOR Grandparent TRUSTEE Trust Fund BENEFICIARY
Grandchildren
Assets
Assets
On Death
Lifetime Income
BENEFICIARY
Children

52. 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

53. 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

54. 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

55. MORE INFORMATION www.brownecraine.com www.peregrine-iom.com

56. CONTACTS Basil Bielich – bbielich@burleigh.co.im
Stuart Foster –
Craig Mitchell –
Maurice Singer –
David Craine –