The Isle of Man is continuing the modernisation of its corporate regime with the introduction of Int...
The Isle of Man is continuing the modernisation of its corporate regime with the introduction of International Business Companies (IBC)-style structures.
In passing legislation to enable the Isle of Man to incorporate IBCs, it will bring the jurisdiction into competition with the British Virgin Islands (BVI) in particular.
The BVI has built its financial services centre off the back of IBCs because it is regarded as an easy and relatively cheap structure to establish. Other jurisdictions have tried to compete but the BVI is still regarded as the leading centre.
Since the original BVI International Business Companies Act came into force in 1984, more than 650,000 IBCs have been incorporated on the islands.
Andrew Corlett, managing director of Cains, said the proposed legislation, which is only in draft form at the moment, is designed to modernise the corporate regime in the Isle of Man.
"The Companies Act has served the island well for 75 years," he said. "But there is a feeling we need a more flexible structure to meet demand," said Corlett. Rather than describe the proposed new structure as an IBC, Corlett said it would be a modern corporate regime.
Steven Beevers, marketing executive of Isle of Man Finance, stressed it is early days in the legislative process but the aim is to introduce the IBC structure, along with the new zero tax regime, on 6 April 2006.
"The legislation has been drafted but it has not gone for public consultation yet," said Beevers. "While the intention is that it will be quicker for IBCs to be established than existing companies and they will be more flexible, advisers will still have to carry out the same level of know-your-customer requirements, and providers will have to be based in the Isle of Man."
He said there would be a consultation with the industry in the next few months in relation to the new corporate regime. Beevers added that there had been ongoing discussions with the corporate service providers since it was first proposed. A Bill would then probably be presented to the Isle of Man Parliament in October.
The aim is for the legislation to be passed and implemented by April 2006.
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