Why the Isle of Man Ethically Structured Companies?

Finance Isle of Man explain why the Isle of Man is in a unique position to be able to meet the growing needs of investors looking for social and impact investments.

The Isle of Man Ethical Structured Company

An ethically structured company is an Isle of Man company, limited by shares and by guarantee and has the advantage of being a corporate legal entity. The company is universally recognised and will endure until the shareholders and guarantee members decide it should be wound up.

Why is it ethical?

There is a range of ethical purposes for which this structure is suitable which include:

• Shariah compliance
• ‘Green’ social impact investment or
• Philanthropy

Making it 'green' 

Each application can be tailored to meet the individual or families concerned. This may involve restricting investment into areas that have a potential social impact, or focusing on areas that promote environmental sustainability or avoiding investment into classes such as alcohol, tobacco or fossil fuels. There are also globally recognised standards for social impact investments which can be adopted.

Philanthropic objectives

As with Shariah compliance and green social impact investment, the structure can enshrine the philanthropic objectives and aims of the family or individuals.

Who would this be suitable for?

This type of company would be attractive to anyone looking for a robust structure for ethical purposes, which are either Shariah compliant or look to meet their philanthropic or green requirements. It is particularly of interest to families or individuals in countries which may not recognise alternative concepts such as trusts, Waqfs or Foundations because the Ethical Structured Company can offer similar benefits in a corporate legal entity.

Why the Isle of Man?

The Isle of Man is a strong, stable and secure jurisdiction with a well-established and diverse financial and professional services sector, home to an array of international businesses.

We offer suitable and enduring legislation, which provides for a range of companies, including an ethically structured one, limited both by shares and by guarantee. The environment in the Isle of Man is fiscally benign and economically strong.

Paul Beckett, Senior Counsel, MannBenham Advocates Limited concurs:

'The Isle of Man is in a unique position which offers a safe, stable and secure venue, with suitable and enduring legislation. The environment in the Isle of Man is fiscally benign and economically strong. The Isle of Man has company law which includes “Hybrids” - companies which are limited both by shares and by guarantee. This form was first developed in the mid-19th century, and is still available today in the Isle of Man. It has the advantage of being universally recognised, and provides the comfort of proven, effective and reliable legislation.

A Hybrid company can be formed under the Isle of Man Companies Act 2006 - flexible and modern company law which includes state of the art international business features. Isle of Man companies have full capacity to do anything. The Ethical Structured Company is tax neutral, ethically responsible and EU Substance compliant. It can be structured to have some of the characteristics of a trust, Foundation or a Waqf - particularly useful for clients whose home jurisdictions do not recognise those concepts, but which do recognise and support the formation of companies.'

Why is this structure unique to the Isle of Man?

The Isle of Man has company law which provides for companies which are limited both by shares and by guarantee. This has been available since the 1800s and has the advantage of being universally recognised, and provides the comfort of proven, effective and reliable legislation.

In addition, Isle of Man companies have full capacity to do anything which allows this unique structure to be tax neutral and ethically responsible, while also being able to be EU Substance compliant.

The Isle of Man Family Office Proposition

The Isle of Man has many well established single and multi-family offices, offering a whole range of functions, from wealth management and succession planning, through to property management, marine and aviation asset management.

The Island's trusted network of family office professionals are experienced in all aspects of fiduciary matters, including the administration and management of investment vehicles such as trusts, foundations and companies as well as the management of luxury assets such as real estate, yachts and aircraft.

Many providers offer succession planning services including establishing asset protection and succession planning structures.

To find out more about the Isle of Man Ethically Structure Company, download Finance Isle of Man's brochure here. 

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