Isle of Man Offshore Company Registration with Bank Account
An Isle of Man Limited Liability Company (LLC) is very popular with foreigners because they can own 100% of the company. The Limited Liability Companies Act of 1996 (Act) governs the formation, business activities, and termination of an Isle of Man LLC.
Background
The Isle of Man is a British Crown Dependency and an island in the Irish Sea. The Isle of Man Department for Enterprise manages the diversified economy in 12 key sectors.[60] The largest sectors by GNP are insurance and e Gaming with 17% of GNP each, followed by ICT and banking with 9% each. The 2016 census lists 41,636 total employed.[1] The largest sectors by employment are “medical and health”, “financial and business services”, construction, retail and public administration.[61] Manufacturing, focused on aerospace and the food and drink industry,[62] employs almost 2000 workers and contributes with about 5% of gross domestic product (GDP). The sector provides laser optics, industrial diamonds, electronics, plastics and aerospace precision engineering. Tourism, agriculture, fishing, once the mainstays of the economy, now make very little contributions to the island’s GDP.
After 30 years of continued GDP growth, the unemployment rate is just around 1%.
Its political system is a unitary parliamentary republic with a President and a Legislature.
Benefits
An Isle of Man Limited Liability Company (LLC) obtains these benefits:
100% Foreign Ownership
Foreigners can own all the shares of an Isle of Man LLC.
Limited Liability
The members are liable only up to the amount of share capital they contributed. No
Taxes
Non-resident owned LLC’s who do not engage in business in the Isle of Man pay no taxes. However, U.S. taxpayers along with everyone subject to global income taxation must report all income to their tax authorities.
Fast Registration
Standard registration takes 72 hours with the option to pay higher fees for faster registration.
Members
A minimum of two members (who can be foreigners) is required to form a LLC.
No Minimum Share Capital
There is no required minimum authorized share capital.
English
Since the Isle of Man is part of the United Kingdom, English is its official language.
Company Name
The LLC must select a company name not used by any other Isle of Man legal entity. The company’s name must end with either the words “Limited Liability Company” or the abbreviations “L.L.C” or “LLC”.
Prior approval of a proposed company name is available from the Registry Department which has the power to reject a proposed company name, make conditions as to how a name is used, require that a LLC change its company name, and change the name if the LLC fails to comply with the Department’s order to change it.
Registering the LLC
The following three items must be filed with the Companies Registry in order to register a new LLC:
- The Articles of Organization for the LLC;
- A complete application form (L6); and
- The registration fee.
Articles of Organization
The law does not provide a specific format for the Articles of Organization. However, the Limited Liability Companies Act 1996 (Act) requires this information:
- The company name;
- Members names and addresses;
- The Isle of Man Registered Agent’s name and address;
- Total amount of contributions in cash and value of like kind;
- The right to add additional members and admission terms and conditions;
- Effect on the company due to members’ resignation, retirement, death, bankruptcy, expulsion, or dissolution;
- If the LLC will elect a manager; and
- Any other provisions regulating the LLC’s internal affairs.
Powers set forth in the Act are not required to be repeated in the Articles of Organization.
The person forming the LLC along with named initial members named in the Articles of Organization all must sign the Articles.
The Companies Registry will issue a Certificate of Organization which is proof of registration.
Limited Liability
Liability is limited for its members up to their capital contribution which must be set forth in the Articles of Organization.
Members
At least two members are required to form a LLC. The members of the LLC govern the company much like partners govern a partnership. Membership is not assignable or transferable.
Beneficial Ownership
If the LLC is formed on behalf of a specific owner’s benefit, his/her identity as the ultimate beneficial owner must be disclosed on a confidential basis to the Companies Registry.
Operating Agreement
A private document called the “Operating Agreement” contains the internal regulations and how the LLC is controlled. This document must include:
- Company name approved by the Companies Registry;
- Names and addresses of the members;
- Registered agent’s name and address who must be qualified under the Registered Agent’s Qualifications Regulations of 2003;
- Total amount of the members’ capital contributions;
- Members’ rights to admit more members;
- Members’ rights to receive repayment from the LLC of any or part of their capital contributions; and
- If members are permitted to appoint a manager.
Every LLC must maintain a register of details regarding its members. The register must be kept at the LLC’s registered office or at any other location in the Isle of Man.
Directors
There is no requirement for directors in a LLC.
Management
While there are no directors and the membership can manage the LLC on its own, the LLC can choose to appoint one or more managers as specified in the Operating Agreement.
Minimum Authorized Share Capital
No minimum authorized and issued share capital is required.
Registered Office and Agent
Every LLC must have a registered office address in the Isle of Man along with a local registered agent.
Taxes
LLC’s are taxed as a partnership. Therefore if a LLC has no Isle of Man residents and does not engage in any type of business in the Isle of Man, it pays no taxes. In addition, distributions made to non-residents pay no taxes and there are no withholding taxes.
However, U.S. taxpayers along with everyone subject to global income taxation must report all income to their tax authorities.
VAT and EU Trading
The Isle of Man is not a member of the European Union (EU). However, it is part of the EU customs territory pursuant to Protocol 3. An Isle of Man LLC can open for business in the Isle of Man and register for a VAT. This gives the LLC an advantage in utilizing the Isle of Man Corporate Tax Rate of 0% while trading in the EU.
Accounting and Auditing
The law does not require annual financial statements. However, the Act does require that accounting records be sufficient to prove and explain the LLC’s business activities.
As with any company, records must be kept regarding income, payments, loans, fees paid, and profits.
An annual return must be filed with the Companies Registry detailing the LLC’s capital and membership. Failure to file the annual return by its deadline will result in the LLC being removed from the Companies Registry.
Annual General Meeting
The law does not require formal meetings of members.
Public Records
The Companies Registry records are available to the public.
Time for Registration
It is estimated that registration and approval of the LLC may take 72 hours or less if the applicant wishes to pay higher registration fees
Shelf Companies
Shelf Companies are not available.
Conclusion
An Isle of Man Limited Liability Company (LLC) obtains these benefits: 100% foreign ownership, limited liability, minimum of two members (who can be foreigners) is required, no minimum share capital, and English is the official language.
Overview of Banks in the Isle of Man
Currently, there are only 18 banks in the Isle of Man. In 2016, the Government introduced the ‘Alternative Banking Regime‘ to encourage the entry of new banks in the Isle of Man. The new regime classifies deposit-taking licenses into three types:
Class 1(1) license allows banks to accept any retail deposits.
Class 1(2) license allows banks to accept non-retail deposits, thus providing services to a very limited class of individuals and corporations.
Class 1(3) license is designated for representative offices of foreign banks, which cannot accept deposits in the Isle of Man.
Conister Bank Limited
Conister Bank Limited is the only one of the banks in the Isle of Man with domestic capital; the rest are foreign-controlled (branches and subsidiaries of foreign banks), with the largest number of banks coming from the United Kingdom.
According to Moody’s, the banking system in the Isle of Man was negative in 2016, following the result of the referendum vote favouring the UK’s exit from the European Union (EU), and the recent change in the outlook on the UK’s Aa1 government rating from stable to negative.
Founded in 1935, Conister Bank is headquartered in Douglas. The bank provides savings, lending, and asset finance products to personal and business customers. It participates in a deposit guarantee scheme in the Isle of Man, which involves accounts up to £50,000 per bank per depositor.
In 2018, the bank’s total assets amounted to US$152 million and net profit reached US$1.68 million.
For anyone considering a career in banking in the Isle of Man, this list of the top banks in the Isle of Man is a helpful guide on where to start. To learn more, see our lists of financial institutions.
Isle of Man Bank Limited
One of the oldest banks in the Isle of Man, the Isle of Man Bank Limited was formed 1865 and is based in Douglas. The bank offers current and savings accounts, credit cards, financial planning, personal loans, mortgages, limited offer savings accounts, online banking, and online shares dealing services. In 2017, the bank reported total assets of US$1.9 billion and a net profit of US$10 million.
Ned bank Private Wealth Limited
Established in 1987, Ned bank Private Wealth Limited is a subsidiary of Ned bank Group Limited. The bank provides professional, personal, and exclusive wealth management services to families and high-net-worth individuals. Formerly known as Fairbairn Private Bank Limited, the company changed its name to Ned bank Private Wealth Limited in October 2012.
Standard Bank Isle of Man Limited
Founded in 1992, Standard Bank Isle of Man Limited is based in Douglas. The bank offers personal, corporate, and business banking services, and facilities such as transactional and savings accounts, debit card facilities, and structured investment accounts. Standard Bank Isle of Man Limited operates as a subsidiary of Standard Bank Group Limited, Africa’s premier banking and financial services institution.
Cayman National Bank & Trust Company (Isle of Man) Limited
The Cayman National Group started its operations as one of the banks in the Isle of Man in 1985 and is based out of Douglas. Cayman National Bank and Trust Company (Isle of Man) Limited is licensed by the Isle of Man Financial Services Authority. The bank provides a wide range of financial services for private and corporate clients. In 2018, the bank reported total assets of US$1.37 billion and a net profit of US$10.8 million.
The Royal Bank of Scotland International Limited
The Royal Bank of Scotland International Limited (RBS International) is the offshore banking entity of the RBS Group. It operates as a sister company called Isle of Man Bank (a wholly owned subsidiary of The Royal Bank of Scotland International (Holdings) Limited). The bank provides a complete range of general and specialist corporate banking and treasury and investor solutions. It was founded in 1996 and employs more than 1,500 staff. RBS International is licensed by the Financial Supervision Authority of the Isle of Man and is based in Douglas.
Santander UK PLC
Founded in 1990, the Isle of Man branch of Santander UK PLC is one of the bank’s largest deposit takers. In 2017, the Isle of Man branch, located in Douglas, started offering products and services under its trading name of Santander International. Santander UK is part of the Santander Group and is a major financial services provider in the UK.
Barclay’s Bank PLC
Barclays provides wealth and investment products and services to its clients through Barclays Bank PLC and its subsidiary companies. Barclays Bank PLC, Isle of Man Branch is licensed by the Isle of Man Financial Services Authority.
Based in Douglas, Barclays Bank PLC operates as a branch of Barclay Bank (United Kingdom). In 2016, the group’s assets amounted to US$1,566 billion and net profit reached US$5.2 billion.
Lloyds Bank International Limited
Lloyds Bank International is incorporated and domiciled in Jersey and operates branches in Guernsey and the Isle of Man. The bank provides a wide range of financial services products, including current and savings accounts, personal loans, and mortgages within the retail market, loans and deposit products to commercial customers, and private banking and asset management. Lloyds Bank International Limited operates as a branch of Lloyds Bank International (Jersey).
Lloyds TSB Offshore was formed in Jersey in 2004, with branches in Guernsey and the Isle of Man. In 2015, Lloyds Bank International employed over 1,000 people in the Channel Islands and the Isle of Man.
Documents required from customers for the procedures align with the incorporation of the Offshore company and Bank Account opening in the selected jurisdiction;
- Certified Passport of each shareholder/beneficial owner and director
- Certified Proof of residential address of each director and shareholder (Must be in English or certified translation version)
- Bank References letter for bankers for each shareholder/beneficial owner and director
- Three proposed company names
- The issued share capital and par value of shares
- A brief Business plan about your proposed line of business
- Together with Guidance Notes for applicant fully completed by the client
Complete Package fees including Government Fees – US$14295.00