Isle of Man Offshore Bank Account

isle of man offshore bank account

The information provided offers an in-depth analysis of the Isle of Man banking system, and the various aspects of opening an Isle of Man offshore bank account. You will find details on the laws and regulations that govern the banking sector, as well as a list of local and international banks that are operating.

Isle of Man Banking System

There are currently some 54 banks established on the Isle of Man, and although this figure has fallen slightly over the last 5 years, the caliber and scale of banking operations has been showing marked improvement. The Royal Bank of Scotland, Barclays Bank, Merrill Lynch all have a presence on the Isle and HSBC has ring-fenced its offshore business by moving to the Island.

Several international banks with branches on the island offer global payment-processing solutions, and Manx Telecom offers an Island-based secure e-payment platform, which can take multi-currency and Sterling-based transactions, enabling Island businesses to market their products globally.

Manx Internet banking operations tended initially to share the rather limited success that attended Internet banking operations generally. One of the more high-profile Isle of Man Internet banks was F Sharp, a subsidiary of the Bank of Ireland, and in October 2001 it was merged back into the offshore operations of its parent, Bank of Ireland, to be known in future as Bank of Ireland F Sharp. In recent years, however, most of the better known Manx banks have begun to offer Internet facilities.

The Island's banking industry is dominated by subsidiaries or branches of the main UK clearing banks and some foreign banks. The majority of banks in the Isle of Man are engaged in providing private banking services to UK expatriates and to foreign nationals. The services offered often extend beyond deposit taking to establishing and administering trusts and managing the underlying companies and assets held by those trusts, including investment management. The growth in other areas of the Island's finance sector, including captive insurance, life assurance, collective investment schemes, investment management and ship management, means that these organizations have sums of money to invest and therefore require investment management services. Some banks also act as trustees to collective investment schemes.

Banks operate under either a full or restricted banking license. The Financial Supervision Commission regulates the banking and investment industry under the powers created by the Financial Supervision Act 1988 and the Investment Business Act 1991. To obtain a domestic license a bank must have a real presence on the island, while an Offshore Banking License allows banking business to be conducted from outside the island through a locally-incorporated bank on a managed basis.  The FSC has a system of supervision based on quarterly or half-yearly financial returns. This is reinforced by annual audited accounts, which must be audited by qualified accountants who have effected professional indemnity insurance currently at £10 million.

For taxation purposes a "managed bank", in accordance with the Banking Act 1975, signifies that the bank has no local premises or staff but is operated on the island by an approved local bank. Since 12th July 1989 the Treasury may exempt, for a specified period, all or part of the profits or income of a "managed bank" from income tax. Where such exemption exists, the Assessor cannot require deduction of income tax from payments to non-residents and cannot pursue income tax liability of non-residents on such payments.

An application for exemption is submitted to the Financial Supervision Commission. Exemption must not be granted unless the Treasury is satisfied that the bank:

  • does not transact, directly or indirectly, any banking business with any Isle of Man resident other than a bank;
  • has been granted a license under the Banking Act 1975, and
  • is managed by the holder of such a license.

Fees for exemption applications can be prescribed by order by the Financial Supervision Commission. A bank which has been granted exemption must produce accounts, etc. if required. Unlicensed banking operations remain a problem and have become known as 'brass plate' companies. These 'rogue' operations are, when reported, investigated by the Enforcement Division of the FSC.

The Banking Act (as amended) recognizes the contractual duty of a banker to keep the affairs of his customer confidential and the customers' entitlement to confidentiality. There are very few limited exceptions to these principles, set out in the Financial Supervision Act 1988, and these include circumstances where disclosure is required to assist criminal proceedings or to enable the FSC to discharge its statutory functions.

All banking license holders are required to participate in the Depositors Compensation Scheme. The FSC is the Scheme Manager. The Banking Business (Compensation of Depositors) Regulations 1991 extends to all licensed banking institutions, except those listed by name in the Schedule. Deposits are protected up to the first £50,000 per individual more than five years.

List of bank licensed with Financial Supervision commission:

  • Abbey National PLC
  • AIB Bank (Isle of Man) Limited
  • Alliance & Leicester Commercial Bank PLC
  • Alliance & Leicester International Limited
  • Anglo Irish Bank Corporation (I.O.M.) PLC
  • Bank of Bermuda (Isle of Man) Limited
  • Bank of Ireland (I.O.M.) Limited
  • Bank of Scotland International Limited
  • Barclays Bank PLC
  • Barclays Private Clients International Limited
  • Barclays Private Bank & Trust (Isle of Man) Limited
  • Bradford & Bingley International Limited
  • Britannia International Limited
  • Cayman National Bank & Trust Company (Isle of Man) Limited
  • Celtic Bank Limited
  • Close Bank (Isle of Man) Limited
  • Close Trustees (Isle of Man) Limited
  • Conister Trust PLC
  • Coutts (I.O.M.) International Limited
  • Coutts (Isle of Man) Limited
  • Duncan Lawrie (IOM) Limited
  • Fairbairn Private Bank (IOM) Limited
  • Habib European Bank Limited
  • HSBC Bank International Limited
  • HSBC Bank PLC
  • Irish Nationwide (IOM) Limited
  • Irish Permanent (IOM) Limited
  • Isle of Man Bank Limited
  • Lloyds TSB Offshore Limited
  • Merrill Lynch Bank and Trust Company (Cayman) Limited
  • Nationwide International Limited
  • RBSI Custody Bank Limited
  • Standard Bank Isle of Man Limited
  • The Co-operative Bank PLC
  • The Royal Bank of Scotland International Limited
  • The Royal Bank of Scotland PLC
  • The Standard Bank of South Africa
  • Zurich Bank International Limited

To learn more about Isle of Man offshore banking or offshore bank account opening in another jurisdiction, Contact Us today.