Economic Substance legislation has been fully enacted on the Isle of Man.
This has resulted in entities conducting relevant activities being subject to the regulations. The relevant activities are as follows:-
- Fund Management
- Finance and leasing
- Pure equity holding company
- Intellectual property holding
- Distribution and service centre business.
In reality this means that Companies undertaking the above activities must ascertain if they have adequate substance within the Island. Such a company will be considered to have adequate substance provided:
- The company is managed and directed from the Isle of Man;
- Has a physical presence and expenditure (proportionate to the level of activity) on the Isle of Man;
- Has an adequate number of qualified employees;
- Conducts core income generating activity within the Isle of Man.
The rules are not as stringent for a pure equity holding company. However, it should be noted that entities with income from intellectual property may need special consideration.
There may however be tremendous benefits to provision of robust substance and this is an area we are pleased to discuss on a case by case basis.
If you wish to discuss any aspects of the substance requirements please do not hesitate to contact us.