Incorporate an Isle of Man Company.
The Isle of Man is simply a fantastic place to live and work. This short article provides a quick overview of how to get started in business here on our lovely island.
Step one – Name choice
Before you incorporate an Isle of Man Company, you need to choose a name and then submit it to the Registrar of Companies for approval.
Step two – Choose structure
Choose which Companies Act you want to form your company under. In the Isle of Man there are two main ones to choose between:-
- The Companies Act 1931 – this is the most common act for local businesses but is also favoured by many international clients. It requires two directors but can be self managed. (ie without a corporate service provider licensed by the Government)
- The Companies Act 2006 – this requires only a single director. It is mainly used for international clients as it requires a financial service licence holder to act as Registered Agent which makes running cost much more expensive.
Step three – Prepare to incorporate Isle of Man Company
Prepare the documentation to incorporate the Isle of Man Company and then submit it with the prescribed fee to the Registrar of Companies.
For a 1931 Act company -If your business is a ‘domestic services’ Isle of Man based business – we may be able to assist you directly.
For a 2006 Act Company – you will need to choose a Registered Agent or we can introduce you so you can form the Company.
Step four – Appointments and Registers.
Once you have incorporated the Company the directors should be formally appointed and the shares will be issued. The nominated officer will also need to update the Isle of Man Government Beneficial ownership register detailing the beneficial owners.
The companies corporate registers should also be set up.
Step five – prepare for business
The company will need to get ready for business. This will depend on the specifics of the proposed activities but may include the following :-
- Opening a bank account. (We can introduce you to a bank locally)
- Setting up accounting systems (Quickbooks / Xero – we are partners of both)
- Register an Internet domain and set up email (we recommend Google G-Suite for email and can assist with this)
- Find suitable premises (We can introduce you to the best local estate agents to help you)
- Register as an Employer with the IOM Tax office.
- The Company will need to apply for work permits for any non IOM workers (we can help with this) .
- Consider registering for VAT (We can assist if required).
- Register for data protection (required for most but not all companies)
- Set up a website to promote services (we can assist by making a referral if required).
Step six – Ongoing obligations.
Periodically the Company will need to keep on top of its obligations. Depending on the activity of the Company these may / will include:
- Bookkeeping – the company should keep its financial records up to date and perform bank reconciliations on a regular basis – we suggest monthly as a minimum. These days, this is best done on an online cloud accounting system like Xero or Quickbooks. We are qualified advisors for both but we prefer Quickbooks as it’s a bit more user friendly.
- Payroll and ITIP returns. Staff (if any) will generally need to be paid monthly with payslips being issued and the relevant taxes / NI paid over to the Government in accordance with the payroll calculation. Katz & Co. provides a full payroll service.
- Paying bills – Most businesses pay their suppliers monthly.
- VAT returns – If it is VAT registered, the Company will need to prepare and file VAT returns with any VAT due monthly. In the Isle of Man these are submitted to customs & Excise rather than HMRC.
- Prepare financial statements – you will need a firm of Isle of Man Accountants such as Katz Accounts to assist you with this.
- Prepare and submit a tax return.
- Prepare and file annual corporate return and nominated officers declaration at the Isle of Man Companies Registry.
- Renew the data protection registration.
Katz & Co. are Accountants and Chartered Secretaries and management consultants specialising in practical matters relating to the establishment and relocation of businesses to the Isle of Man .
For further assistance contact Martin Katz.