26 July 2010
5 September 2013
19 August 2013
22 July 2013
7 January 2014
27 November 2013
Being part of the EU customs area with tax benefits, the Isle of Man is an ideal base for companies exporting into the EU. By Mike Edwards
The Isle of Man is one of the best regarded and regulated international business centres, and it also provides a cost-efficient base from which to import goods into the EU.
The Island’s unique proposition includes EU access, being part of the EU customs area and extremely competitive rates of taxation. As a place to reside, the Isle of Man offers a high standard of living, excellent infrastructure and easy travel to Europe and beyond. In an era where virtually all businesses face considerable pressure to lower their costs, the solution offered by the Island to exporters is extremely attractive.
With a total population of more than 500 million, the EU, taken as a whole, is a market that few manufacturers or exporters can ignore. It is the world’s largest importer of goods and services, and the most significant trading partner for several countries, including China and India. According to the International Monetary Fund, the EU generated an estimated nominal gross domestic product of $16.45tn (£10.82tn) in 2009, amounting to more than 21 per cent of the world’s total economic output in terms of purchasing power parity.
Although the Isle of Man is neither a member state nor an associate member of the EU, by virtue of Protocol 3 to the Act of Accession annexed to the Treaty of Accession 1972, there is free movement of goods and agricultural products to the EU, with common customs tariffs, levies and other measures applying to trade between the Isle of Man and member states.
Customs & Excise on the Isle of Man (the Government division responsible for the assessment and collection of excise and customs duties) enjoys a reputation for offering high levels of service and has established a sophisticated electronic processing unit for the clearance of goods, without the goods necessarily being brought physically to the Island. The attraction of the Isle of Man will be strengthened as the EU progresses to Customs Union - whereby goods can be cleared in one jurisdiction
for all member states - as it is committed to doing.
A company incorporated on the Isle of Man by an exporter is subject to a low rate of corporate tax and, because of its development as an international business centre, the full spectrum of banking and professional services are available. In addition, a number of service providers on the Island are able to assist exporters by providing support ranging from an interface with Customs & Excise through to a full package including (among other things) online sales, warehousing and stock control.
It is expected that most of the enterprises establishing operations on the Isle of Man will be from Asia and this is a region with which ties are developing rapidly. With its huge export-driven economy, China has been identified as a key target market and a recent visit by an Isle of Man Government delegation to Beijing, Shanghai and Hong Kong highlighted the benefits that are offered to entities that export into the EU. The delegation was well received in China by Chinese Government agencies keen to promote trade related opportunities as well as private sector groups. There was significant coverage in the Chinese media of the presentations that were made by the delegation and a great deal of interest was generated.
A Chinese Government research institute published a paper shortly before the visit suggesting that Chinese enterprises invest in the Isle of Man as one of the options to implement the national ’Going Out’ strategy, under which businesses are encouraged to seek opportunities overseas.
During the visit, Mr He Wan Peng, chief researcher at Forecast Think Tank, was quoted as saying: “China needs new ways of thinking to promote the further development of Sino-European economic and trade relations. The Isle of Man, with its special investment environment, allows China to choose it as the bridgehead to the EU market.”
The Isle of Man Government has created a positive environment for businesses and grants may be available to qualifying organisations that are considering establishing a presence on the Island. The Isle of Man offers a very attractive platform for those exporting into the EU as they will be able to combine the efficient clearance of goods with low levels of taxation. At a time when the pressure to reduce overheads is considerable, the Isle of Man makes a compelling case for those trading into the EU.
Mike Edwards is a director at Cains