The Isle of Man is a self-governing British Crown dependency.
Insurance and online gambling generate 17% of GNP each, followed by information and communications technology and banking with 9% each.
The Isle of Man is a low-tax economy with no capital gains tax, wealth tax, stamp duty, or inheritance tax and a top rate of income tax of 20%. A tax cap is in force: the maximum amount of tax payable by an individual is £125,000 or £250,000 for couples if they choose to have their incomes jointly assessed. Personal income is assessed and taxed on a total worldwide income basis rather than a remittance basis. The standard rate of corporation tax for residents and non-residents is 0%. Retail business profits above £500,000 and banking business income are taxed at 10%, and rental (or other) income from land and buildings situated on the Isle of Man is taxed at 20%.
Offshore banking, manufacturing, and tourism are key sectors of the economy, and the government has actively encouraged the diversification of its economy, offering incentives to high-technology companies and financial institutions that locate on the island. Consequently, it now hosts a wide range of sectors including aviation and maritime services, clean-tech and bio-tech, creative industries, e-business and e-gaming, high-tech manufacturing and tourism.
Its large and sophisticated financial center is potentially vulnerable to money laundering. Most of the illicit funds in the IOM are from fraud schemes and narcotics trafficking in other jurisdictions, including the UK. Predicate offenses to charge money laundering are minimal within the jurisdiction; however, there is concern over value-added tax crimes and the growing risk of cybercrime in its various forms, including identity theft and internet abuse.
All expansion to IOM will need to consider an appropriate UK laws and regulations and may be affected by Brexit negotiations.
Treaties & Agreements
IOM is a Crown Dependency and cannot sign or ratify international conventions in its own right unless entrusted to do so. Rather, the UK is responsible for IOM’s international affairs and, at IOM’s request, may arrange for the ratification of any convention to be extended to the Isle of Man.
The Isle of Man is neither part of the European Union, nor has a special status, and thus did not take part in the 2016 referendum on the UK's EU membership. However, Protocol 3 of the UK's Act of Accession to the Treaty of Rome included the Isle of Man within the EU's customs area, allowing for trade in Manx goods without tariffs throughout the EU. As it is not part of the EU's internal market, there are still limitations on the movement of capital, services and labour.
The effect of the UK leaving the European Union is uncertain. The UK has confirmed that the Crown Dependencies' position will be included in the Brexit negotiations.
The Isle of Man now formally participates in the mutual evaluation procedures of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a FATF-style regional body. MONEYVAL has not yet evaluated the IOM.
Recognizing that the nature of tax cooperation has evolved and automatic exchange of information is becoming the global standard, the IOM is making commitments to international co-operation for tax purposes. It has had a Tax Information Exchange Agreement with the United States since 2004 and has a strong working relationship with the Internal Revenue Service. The IOM has a similar intergovernmental agreement with the UK.
Overview of Opportunities in Isle of Man
Relevant Industries to Focus On
Banking and Financial Services
Machinery and Mechanical Appliances
Maritime and Shipping
Security and Defense