With plenty of room to expand, the Isle of Man has plenty to look forward to.
The United Kingdom continues to dominate the Isle of Man's captive market but the authorities have been actively seeking to reduce this dependence. Redomiciliation regulations, in particular, have proved successful in luring captives from other jurisdictions.At the last count, the domicile hosted 179 captives, but as David Findlay, business development manager at the Insurance and Pensions Authority (IPA) points out: “While the number of captives can be considered a useful indicator of the fortunes of the sector in a particular domicile, another, perhaps more meaningful statistic is the funds under management in the domicile in relation to the number of captives authorised. This combined measure provides the yardstick by which to ascertain the use to which the captives are being put - their substance - or the benefit that the parent organisation is deriving by using the captive as the anchor point of their risk management strategy. As at the end of 1997, the Isle of Man's 175 captives had £4.7 billion under management.”Regulation of insurance companies is carried out by the IPA in accordance with the Insurance Act 1986. The Act seeks to ensure that those running insurance businesses are fit and proper and that the companies are financially sound. The legislation is clear and comprehensive and its reporting requirements satisfy the IPA's strict supervisory needs without placing unnecessary demands on the marketplace.The IPA is respected for its proactive and non-bureaucratic approach to fulfilling its supervisory role.
What about tax?
A wide array of fiscal options is available to insurance companies. All companies have the option of paying tax at a standard rate of 20%. Any island based company transacting business internationally, however, can choose to operate under the International Business Act 1994, whereby they may elect to pay tax at a rate between 1% and 35%.
As an alternative, insurance companies may operate under statutory provisions whereby they may be exempted from tax on all, or part, of their profits, provided business is not transacted with Isle of Man residents.
What about infrastructure?
The Isle of Man has an abundance of financial sector related expertise. With international banks, legal and accountancy firms, investment managers, actuarial consultancy services and trust facilities to hand, the island offers a wide array of ancillary services. Meanwhile, market leaders in captive management are represented on the island and suitably qualified personnel with a wealth of international experience are available to act as locally based directors.The island's business environment is not its only attraction. With a land mass of 227 square miles inhabited by a population of 72,000 people, the island boasts a high quality of life. The room to expand - a rare commodity in some international financial centres - is one of the island's most prized assets.