IOMs economic strategy in tatters?

[The Phantom]

6 minutes ago, Ringy Rose said:

It’s no different to anywhere else.

MONEYVAL requirements are extremely petty and there is a hell of a lot of bollocks in there. But MONEYVAL/FATF are the self-appointed world police and if you don’t do what they say then you get put on their naughty step. Getting put on the naughty step cost Gibraltar 10% of their GDP- and bear in mind that’s the loss that Gibraltar were prepared to publicly admit to.

Mauritius was grey listed a few years back and it ended up I did a lot of business replacing Mauritian Companies with IOM ones mainly as banks started refusing to deal with them.  Not sure of the exact numbers, but Mauritius must have lost quite a bit of business over those years.  They were however good boys and got un-grey listed after a year or two. 

[The Phantom]

4 minutes ago, Gladys said:

Is it a requirement to have local directors, or is it a requirement to demonstrate substance? 

Depends what the company is doing.   Some sectors require IOM substance (Directors) others don't.  It then falls down to where the Directors are resident (i.e. where the decisions are made) as to what jurisdiction the company will be deemed to be in for tax etc.  For them to appoint Dubai Directors wouldn't be too much of an issue as 0% tax there unless it required substance here. 

 

[Gladys]

10 minutes ago, The Phantom said:

Depends what the company is doing.   Some sectors require IOM substance (Directors) others don't.  It then falls down to where the Directors are resident (i.e. where the decisions are made) as to what jurisdiction the company will be deemed to be in for tax etc.  For them to appoint Dubai Directors wouldn't be too much of an issue as 0% tax there unless it required substance here. 

 

That was kind of what I was getting at.  If they need IOM directors for substance, and they were 'setting up' here, why would that be an issue as they would have an operation which would need senior staff anyway?  If they did not need economic substance here, then no need for IOM directors.

More likely, they just thought 'setting up' would be to establish an IOM company as just a brass plate, but run from elsewhere to get the tax advantage.

As others said, probably no loss anyway. 

 

[Ringy Rose]

59 minutes ago, Gladys said:

Is it a requirement to have local directors, or is it a requirement to demonstrate substance? 

Depends on the sector. In the regulated sectors you usually need to demonstrate substance and demonstrate local control. 

It’s an FSA requirement for there to be two local directors. It’s not a secret- it’s the first thing they say on the applications page. There can be non-local directors in addition.

The only real reason why you’d object is if you didn’t want the scrutiny. Which would tie in with them seeing CDD as being “too much bureaucracy”.

Edited September 6 by Ringy Rose

[Ringy Rose]

1 hour ago, The Phantom said:

Not sure of the exact numbers, but Mauritius must have lost quite a bit of business over those years.  They were however good boys and got un-grey listed after a year or two. 

It does vary, getting grey-listed didn’t massively affect the UAE. But then again they are a big enough country for banks to bother with even with impact of the grey listing.

Mauritius struggled as you say, so did Gibraltar and so did Malta. There’s a reason why Malta is now as bureaucratic as it is, and that was to get off the grey list.

[A fool and his money.....]

17 hours ago, woolley said:

OK, to a degree. There's some of that coming down the line with the global 15% tax on large multinationals, but we have to be careful in a tax haven not to kill the golden goose that pays for everything. At the same time as tweaking taxes, it is imperative to cut the size of the public sector bureaucracy.

Is it a golden goose though? We've been relying on it for 40 years and as far as I can tell we're pretty skint.

[NoTail]

2 hours ago, A fool and his money..... said:

Is it a golden goose though? We've been relying on it for 40 years and as far as I can tell we're pretty skint.

It certainly was a golden goose. I remember the good old wild west days of Chris Kingston and many other "characters" (crooks).

Edited September 6 by NoTail

[Luker]

20 hours ago, woolley said:

OK, to a degree. There's some of that coming down the line with the global 15% tax on large multinationals, but we have to be careful in a tax haven not to kill the golden goose that pays for everything. At the same time as tweaking taxes, it is imperative to cut the size of the public sector bureaucracy.

The 15% charge on multinationals is said to be due to create a tax windfall of £90,000,000 for Jersey which is a considerable tax base for multi nationals. It’s not necessarily negative for astute international business centres.

[woolley]

3 hours ago, Luker said:

The 15% charge on multinationals is said to be due to create a tax windfall of £90,000,000 for Jersey which is a considerable tax base for multi nationals. It’s not necessarily negative for astute international business centres.

Of course it isn't negative - if it's enforced in all jurisdictions meaning there's nowhere to run, and international sanctions are imposed on entities operating from any non-compliant territories. I heard £40-50m for Jersey, but I don't think it's nailed down yet. I've not heard a figure for here at all. Think someone on a forum said £15-20m but it was probably just a swag.

Edited September 6 by woolley

[woolley]

5 hours ago, A fool and his money..... said:

Is it a golden goose though? We've been relying on it for 40 years and as far as I can tell we're pretty skint.

We've had this before though, haven't we? There's skint and  skint. We aren't really skint. The public revenue for an Island this size is remarkably healthy, and we should be sitting pretty on our ample reserves. The problem is that the bureaucracy has grown itself to an outrageous level completely out of proportion to the population and racked up big actuarial debts for the future. Sheer mismanagement.