AN ALTERNATIVE BANKING REGIME

In 2016 the Isle of Man introduced the Alternative Banking Regime (ABR) framework, legislative changes following consultation and industry collaboration, to provide new banking opportunities for businesses on the Isle of Man. The ABR is designed to attract banking operations to the Island, in particular Private Banks, Foreign Bank branches, and Representative Offices.

The ABR expanded the existing Class 1 (deposit taking) banking licence to include:

• • • Class 1 (1) – for the typical existing bank and any taking retail deposits.
    • Class 1 (2) – for non-retail deposit takers - those that provide services to a very limited class of individuals, and corporates.
    • Class 1 (3) – for Representative Offices of Foreign banks, not able to take deposits in the Island.

*Please note, banks operating under the Class 1(2) and Class 1(3) would not have the protection offered by the Depositors' Compensation Scheme (DCS) in the event of their failure; individuals banking with them are expected to be able to shoulder such losses. Disclosure and transparency rules are included within the full ABR framework. Corporation tax on profits for retail deposit based businesses is set at 10%. All other banking activities are rated at 0%.