IoM to introduce 0% corporate tax to attract wealthy to invest and live on the island
The Isle of Man Government will target the high net worth (HNW) market as it looks to further develop its economy.
Hon Alan Bell, treasury minister in the Isle of Man government, said following several years of unprecedented growth, the government would now target HNW individuals to not only invest but to also live on the island.
He said: "We have been thinking about this market for some time as the next logical step in developing our economy. Over the past 10 years, our economic growth has averaged 7.6% in real terms year-on-year. This year it is running at 6.3%, some three times higher than the European Union average."
Bell said there would be a number of advantages for the wealthy on the island, following government plans to introduce 0% corporate tax from 5 April this year for trading companies.
He added: "Banks will remain our main source of corporate tax and will be taxed 10% in the future. It is now very much in our interests to help the banks become as profitable as possible.
"In attracting HNW individuals to the island we hope to encourage them to use our banking facilities and other financial services to manage their assets.
"Additionally, we are currently attracting a considerable amount of new business based on IT and internet activities."
Bell said the government was also considering a tax cap on personal tax liability to encourage the economically active entrepreneurs associated with these new ventures to consider moving to the island, to not only bring their wealth, but also part or all of their business to further grow and diversify the economy.
He said: "My aim is to establish a combination of corporate and personal tax structures, which will place the Isle of Man in the most competitive position to capitilise on the growth in personal wealth and the new industries which are currently developing. This will help to build on our already impressive economic growth and AAA-rating from credit agencies, Standard & Poor's and Moodys."
The recent opening of its London-based office also demonstrated its commitment to financial services and building close relationships on an international level, he added.
"This major new venture provides our business community with a platform to increase our already extensive links with the City and demonstrates the Isle of Man's high level of commitment to, and recognition of, our growing business contacts and working relationships between our two communities.
"It will provide a base for many of our businesses in the heart of the City for the very first time as well as meeting rooms, work space, reception and seminar facilities," he said. Richard Hay, partner at Stikeman Elliott, also believed this was a significant step forward for the island's business community.
He commented: "The establishment of the Isle of Man office in London will enhance its visibility in the world's key financial services market place.
"London institutions will see this move as welcome evidence of Isle of Man's growing capacity and accessibility and the move will lead to significantly enhanced trading opportunities for Manx business."
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