Language: English is the official and spoken language.

Political System: The Crown and an assembly called Tynwald, consisting of an Upper House (the Legislative Council, the bishop of Sodor and Man, the attorney general and the Lower House of Keys), forms the Parliament of the Isle of Man. The government of the United Kingdom is responsible for defence and overseas representation, and the Isle of Man pays an annual fee for this service.

Legal System: The island has its own courts, but the law is based on English Common Law. Most of the civil law legislation is modeled on United Kingdom Acts of Parliament.

Advocates of the Manx Bar have the combined role of both barristers and solicitors, and they are able to appear in both the High and Lower Courts. The ultimate court of appeal is the English Privy Council.

Taxation: The Isle of Man does not have any double-taxation agreements besides a limited treaty with the United Kingdom. Residents are taxed only on their worldwide income at a rate of 15% for the first chargeable amount and 20% after that. There are no capital gains, wealth, inheritance or gift taxes.

Incorporation: There are three types of companies available: Exempt companies, Non-Resident companies and Resident companies. It is possible to incorporate companies Limited by Shares or by Guarantee or Unlimited companies. A Private Limited Company with a share capital is the most common. An Isle of Man company can be incorporated within 7 working days, and ready-made companies are available for immediate use. All Isle of Man companies are incorporated under the 1931 Companies Act, which was last amended in 1992.

Exempt Companies: Following are requirements for an Exempt company:

• An Exempt company cannot be owned by an Isle of Man resident or company; however, it may be owned by other Isle of Man Exempt companies.
• An Exempt company must have its source of income outside the Island.
• The company can be resident on the island, and it is exempted from Isle of Man taxation upon the lodging of an application for exempt status and payment of the annual fee.
• A annual fee of 300 pounds has to be paid to the Registrar of Companies.
• The company must have a minimum of two directors, who must be individuals and of any nationality. One director has to be an Isle of Man resident.
• The names and addresses of the directors are lodged with the Registrar of Companies, and this information is available to the public (nominees are widely used because of this).
• The company secretary must be an individual and a resident, and must be suitably qualified as a solicitor, accountant etc.
• A minimum of two shareholders are required, who may be either individuals or corporations. However, single member companies may be incorporated.
• The first annual general meeting must be held within 12 months of the incorporation date, and after that, the meetings must take place no more than 12 months apart. The meetings may take place anywhere in the world.
• All Isle of Man companies must keep a Register of Directors, Secretaries & Members at the registered office address.
• The company must file annual returns including the directors, the company secretary, the members, the office address and the shares taken up at the consideration paid. However, there is no obligation to file accounts.
• The share capital must have a par value, but it can be denominated in any currency. The minimum issued share capital is 2 pounds, but it is normal to have an authorized share capital of 2,000 pounds, which is the maximum share capital for the minimum duty.

The Articles of Association govern the internal affairs of the company. The Memorandum of Association for a Private Limited company must include:

• The name of the company and the fact that it is a Private company
• The authorized share capital
• The classes of shares
• Limited liability
• The registered office address, which must be in the Isle of Man
• The subscriber must write the number of shares he takes, which may not be less than one.

Non-Resident Companies: This type of company has its central management and control exercised from a foreign base. It will only be liable to income tax if there is any income from Isle of Man besides bank interest.

To obtain Non-Resident status, a Declaration of Non-Residency has to be filed with the Registrar of Companies. A flat duty of 600 pounds has to be paid annually upon filing of the annual return with the Registrar of Companies.

Resident Companies: This type of company is used mainly for carrying on business in the Isle of Man. The taxation rate is 20% on chargeable profits.

Special Features:

1. The Isle of Man has adopted an industrial aid and incentive package that is considered to be one of the most attractive in the Western world. Companies that satisfy the environmental and financial criteria of the Manx Government are entitled to capital grants of 40% of costs of new buildings or improvements in buildings and on new machinery and plants. First-year operating grants of 40% of non-recurring costs are also granted, as well as training costs of up to 50% of costs incurred by employers and 40% of marketing costs in new ventures. Investment grants are 40% of outlays invested to conserve energy and reduce costs, while 40% of costs of employing consultants to advise on methods of applying micro-processing technology or manufacturing processes are allowed.
2. The Isle of Man has annexed membership of the European Community because of the Island's close relationship with the U.K. It admits free trade in agricultural and industrial products with E.C. countries.
3. The Isle of Man is not bound by E.C. Tax Harmonisation Policies and is outside the jurisdiction of the E.C. for financial services.

• Excellent communications
• A well-established international banking system
• Sophisticated company law
• Non-Resident companies and Exempt companies are exempted from domestic taxation
• No wealth, gift, inheritance or capital gains taxes
• No disclosure of beneficial ownership
• Immediate company availability
• Political, social and economic stability