The following questions and answers relate to Isle of Man companies only. Please call us for a discussion on the position in other jurisdictions.

1. Are there any restrictions on a company name?
All company names must be approved by the Registrar of Companies before incorporation and, once approved, that name is then reserved for a period of one month. Names that are similar or identical to an existing company or names that imply illegal activities will not be allowed.

The use of certain words such as "Royal", "Imperial" or "Corporation" is generally precluded and the use of words "Bank" or "Insurance" (or similar) requires the approval of the Financial Supervision Commission or Insurance Supervisor.

2. What is the New Manx Vehicle?
With effect from 1 November 2006, it is possible to incorporate an Isle of Man company called New Manx Vehicle ("NMV"). The new corporate regime will co-exist alongside the old regime (Companies Acts 1931 to 2004) and these entities are now referred to as 1931 companies. It is possible to convert a company formed under the older legislation to a New Manx Vehicle. The conversion process is very straightforward.

Some of the key features of the New Manx Vehicle are:

• Corporate Directors permissible with certain restrictions
• Single members permissible
• Reduced compulsory Companies Registry filing requirements
• No requirement for authorised share capital
• No requirement to hold an AGM, and availability of easier transfer of domicile procedures, re-registration procedures and merger procedures
• No requirement to prepare financial statements
• Accounting records must be maintained
• No audit requirements
• Zero par value shares acceptable
• Isle of Man registered agent required and the agent is jointly responsible along with the directors.  The registered agent must be appropriately licensed in the Isle of Man.
• An NMV has unlimited capacity to carry on or undertake any business or activity.   No act of the company and no transfer of an asset by or to a company is beyond its capacity by reason only of the fact that a company has purported to restrict its capacity in any way, whether pursuant to its Memorandum or Articles of otherwise.  Any party dealing with the NMV is entitled to assume that the directors of the NMV are acting without limitation.
• Ability to adopt pre-incorporation contracts
• Company may purchase, redeem or otherwise acquire its own shares

TOP

3. What activities can be undertaken by an offshore company?
An offshore company can undertake any activity that can legally be undertaken by a natural person.

4. Are corporate directors allowed?
Corporate Directors are not allowed for companies incorporated under the Isle of Man Companies Acts 1931 to 2004. Corporate Directors are allowed (with certain restrictions) for New Manx Vehicles.

5. Are bearer shares permitted?
No.

6. What choice of banks are available in the Isle of Man?
Usually, we open bank accounts with one of the large UK or Irish Banks. The choice of bank may depend on the personal choice of the client, the banking services which are required or the requirements of the bank in relation to opening an account.

7. Who signs on the company bank account?
Since we provide full nominee services for all our client company's to ensure confidentiality and efficient administration of the company's activities, our office also provides the authorised signatories on the bank account. It is an absolute necessity that the directors are at all times fully aware of each company's transactions as part of their directors' duties and responsibilities.

8. How long does it take to open a bank account?
This varies, depending on the banks requirements, the whereabouts of the company's owners, personal bankers and the time taken to obtain a personal reference. The average time taken to complete all formalities is between 1-2 weeks.

9. Can I have a corporate credit card?
Corporate credit card facilities are offered by most of the large banks. These credit cards are operated in a similar way to debit cards as the total amount due is debited against the company's bank account once a month. All banks will require a fixed amount of funds to be placed in a blocked interest earning account as security. Corporate credit cards may only be used for bona fide company business expenses.

TOP

10. When does an offshore company have to be VAT registered?
This is a very complex area and many factors have to be considered i.e. goods or services company, where activities are undertaken, source of funds, trading structure in which the offshore company is involved. During our initial discussions with potential clients, we discuss the nature of the company's activities etc. and ascertain from the given information whether or not a company is required to be VAT registered.

Generally, where a company's turnover is likely to exceed £66,000 in any 12 month period, it is necessary to register the company for VAT in the Isle of Man and file quarterly VAT Returns.

11. I am an IT contractor and usually undertake contracts in various European countries for periods of 6 months to 1 year. Would it be beneficial for me to work through an offshore company?
Yes, an offshore company works very well in a contract situation. A consultancy agreement or contract should be drawn up between the offshore company and your recruitment agent and employer. Basically, the offshore company supplies your services to your employer at a fixed consultancy fee, which is paid into the company's bank account. We provide a full invoicing, bookkeeping, bank and VAT administration service. The offshore company also can be used for subsequent contracts.

12. What are the advantages of ownership of property by an offshore company?
The primary advantage is the mitigation or avoidance of capital gains, inheritance and property transfer taxes.

13. Is the Isle of Man party to double taxation treaties?
The Isle of Man is not party to double taxation treaties other than a limited treaty with the United Kingdom.

14. What information is included in a company's annual return?
An Annual Return includes the following details:

• Company Number.
• Registered Office.
• Share Capital.
• Registered Shareholders.
• Any share transfers or allotments since last Annual Return or incorporation if it is the first annual return.
• Details on the company's directors and company secretary.
• Financial Year End Declaration 

15. Are alternate directors allowed?
Yes

16. What information must be included in a company letterhead?
It is a legal requirement for the following information to be included on a company's letterhead:

• The full name of the company.
• Any registered trade names.
• Registered office address.
• Place of incorporation and registered number.
• Names of the Directors.
• VAT Registration number (if VAT Registered).

TOP