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Isle of Man introduces New Manx Vehicle

The Isle of Man Companies Act 2006, which introduces a new simplified corporate vehicle into Manx Law, was brought into force on 1 November 2006. Royal Assent was received on 14 October 2006.

The Act provides a streamlined process for setting up and running a company in the Isle of Man and complements the zero rate company tax strategy introduced in April 2006. This "corporate package" of legislation has been tailored for business, and has the flexibility to enable new applications of the corporate vehicle in line with future market developments.

The New Manx Vehicle (NMV) is based on the international business company (IBC) model and is fully in line with recognised benchmarks. It is introduced alongside previous Isle of Man Company Legislation (the Companies Acts 1931-2004). Companies formed under the 1931 Act are permitted to convert to the 2006 version in the future.

Key elements of the new Act include:

• Greater flexibility of use;

• Simplified reporting;

• Use of regulated corporate directors/one Director individual or corporate;

• Use of registered agents, in place of company secretary (a role performed by licensed corporate service providers);

• Unlimited corporate capacity, but restricted objects permissible;

• No preclusion of financial assistance;

• Pre-incorporation contracts can be adopted;

• Simple merger and consolidation procedures;

• Introduction of protected cell companies for general business use;

• Simplified corporate redomiciliation from other jurisdictions.

The Act has been designed for a range of corporate transactions and is likely to be particularly useful for public offerings, securitisations, and asset and project finance.

John Aspden, chief executive of the Financial Supervision Commission, said: "The new Companies Act offers a simplified regime, including speed of incorporation, flexibility and ease of administration, whilst at the same time meeting key expectations in terms of disclosure and corporate governance.”

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