Isle Of Man Offers Effective Gateway To The EU
27th July 2010
This article was first published in the July edition of The Lawyer
The Isle of Man is considered to be one of the best regarded and regulated international business centres but it also provides a cost-efficient base from which to import goods into the European Union. The Isle of Man'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 which is offered to exporters is extremely attractive.
With a total population of over 500 million, the EU (taken as a whole) is a market which few manufacturers or exporters can ignore – it is the world's largest importer of goods and services; and the biggest trading partner with several countries including China and India. According to the IMF, the EU generated an estimated nominal gross domestic product of US$16.45 trillion in 2009, amounting to over 21% 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 European Union, 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 in the Isle of Man (the Government division responsible for the assessment and collection of excise and customs duties) enjoys a reputation of 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 Isle of Man. The attraction of the Isle of Man will be strengthened as the EU progresses to Customs Union, as it is committed to doing, whereby goods can be cleared in one jurisdiction for all member states.
A company incorporated in the Isle of Man by an exporter would be subject to a low rate of corporate taxation and, because of its development as a thriving international business centre, the full spectrum of banking and professional services are available. In addition, a number of service providers in the Isle of Man are able to assist exporters by providing support ranging from an interface with Customs & Excise through to a full package including (amongst other things) online sales, warehousing and stock control.
It is anticipated that most of the enterprises establishing operations in the Isle of Man will be from Asia and this is a region with which ties are being developed rapidly. China with its huge export driven economy was 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 which export into the EU. The delegation was well received in China by Chinese Government agencies, which are keen to promote trade related opportunities, and private sector groups. There was significant coverage in the Chinese media of the presentations made by the delegation and a great deal of interest was generated.
A Chinese Government research institute had published a paper shortly before the visit which suggested 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 which are considering establishing a presence in the Isle of Man. 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.
For more information, please contact Mike Edwards. |
