Isle of Man: The Isle Of Man Is The Premier Jurisdiction For Offshore Vehicles Listed On AIM - How Simcocks Can Assist

Last Updated: 23 May 2012
Article by Alex Spencer


AIM is the London Stock Exchange's international market for smaller growing companies, ranging from young, venture capital-backed start-ups to well-established, mature businesses seeking to expand.

The Exchange's objective in setting up AIM was to offer smaller companies (in the UK and abroad and from any sector) the opportunity to access London's capital markets via market with a pragmatic and appropriate approach to regulation.

Since its launch in 1995, more than 3,000 companies have joined AIM − raising billions of pounds in the process, both through initial public offerings (IPOs) and further capital raisings. Many companies have subsequently transferred to the Exchange's Main Market.

Many of the companies listed are offshore vehicles and the Isle of Man is the leading provider of these vehicles.


A listing on AIM involves the following participants and service providers:

  • The Company

    AIM is suitable for smaller companies from any sector and from any country. The company is likely to be advised by UK solicitors and reporting accountants and by financial public relations and investor relations consultants. Where the company is incorporated offshore (for example, in the Isle of Man) lawyers in the jurisdiction of incorporation will also be employed.
  • The Registrar

    Shares are usually in uncertificated form and title is transferred by means of an instruction issued in accordance with the rules of the CREST system. For this purpose, a registrar/CREST service provider is appointed.
  • The Nominated Adviser

    Every company joining AIM must appoint a Nominated Adviser (known as a Nomad), which must be approved by the Exchange. The role of the Nomad includes pre-vetting of the company, assisting it through the listing process and the provision of advice and assistance post listing to ensure that the company complies with its ongoing obligations. The Nomad will appoint its own legal advisers.
  • The Broker

    The broker is responsible for facilitating and promoting trading in the company's shares on the market. In many cases, the broker is the same firm as the Nomad. The Broker may also appoint its own legal advisers.
  • The Investor

    Investors range from City institutions to small investors.
  • The Exchange's AIM Team

    The Exchange has a specialist AIM team dedicated to providing advice, information and support for all AIM participants.


In recent years there has been considerable growth in the number of listings based on an Isle of Man incorporated company vehicle. Indeed, it appears the Isle of Man is the offshore jurisdiction of choice for AIM listings, particularly for Eastern European, Indian, Russian and Chinese businesses.


The Jurisdiction

  • The Isle of Man is a sophisticated and well-regulated international finance centre. It holds a AAA credit rating from Moodys and AA+ by Standard & Poor.
  • The Isle of Man is a self-governing Dependency of the British Crown. It is geographically part of the British Isles but is not part of the UK or the EU.
  • Follows London time, which puts it in a convenient time zone and is English speaking.
  • Is within easy striking distance of the major cities in the UK. In most cases it is possible to travel to the Island, attend meetings there and return the same day.
  • The Isle of Man has a well-established and well-regulated infrastructure for the provision of corporate administration services.


  • The Isle of Man is a common law jurisdiction and its company law is based on UK principles. Accordingly, City bankers and lawyers will find Isle of Man companies, documentation, practices and procedures familiar. In particular, the procedures for company borrowing and the registration of charges are similar to those prevailing in the UK.


  • An Isle of Man company listed on AIM should not be subject to UK tax as long as it is managed and controlled outside the UK. Needless to say, UK tax advice should be obtained in this respect.
  • With effect from 6 April 2006, the Isle of Man introduced a standard zero per cent rate of income tax/corporation tax for companies (except in relation to certain profits arising from banking, or from land and property in the Isle of Man). Under this regime, the Isle of Man continues as a tax neutral jurisdiction facilitating efficient international tax planning; however, the "ring-fencing" of international and local tax bases associated with tax exempt regimes has been eliminated in compliance with current international requirements in relation to tax competition.
  • There is no capital gains tax in the Isle of Man.
  • No stamp duty is payable on the transfer of shares.

The Isle of Man is subject to the same VAT regime as the UK.


  • Closed-ended investment companies are not regarded as regulated entities for the purposes of Isle of Man financial services regulation and, in particular, collective investment fund (mutual fund) regulation.
  • No prior Isle of Man regulatory approval is required to list an Isle of Man company on AIM.


Isle of Man Companies suitable for listing on AIM can be incorporated under two separate pieces of legislation:

  • The Companies Acts 1931 – 2004 (the "1931 Act"); and
  • The Companies Act 2006 (the "2006 Act"; a company incorporated under this Act is sometimes referred to as a "New Manx Vehicle" or "NMV").

Since the enactment of the 2006 Act, a number of listings have used companies incorporated under this Act and it is expected that this trend will continue. Advantages of the 2006 Act include the following:

  • In general, companies incorporated under the 2006 Act are simple, flexible and easy to administer.
  • The 2006 Act does not make the traditional distinction between public companies (plc) and private companies (Limited). Any company may offer its securities to the public. However, the name of any company may include the words "Public Limited Company" or "public limited company" or the abbreviations "PLC" or "plc". Indeed, there is the further option to use the words "Limited" or "Corporation" or "Incorporated" or the abbreviations "Ltd" or "Corp" or "Inc".
  • The directors are required to ensure any prospectus (called an "offering document") issued in relation to the company (i) contains all material information that investors would reasonably expect to be included in order to enable them to make an informed decision and of which the directors were aware at the time of issue of the offering document, or of which they would have been aware had they made such enquiries as would have been reasonable in all the circumstances; and (ii) sets out such information fairly and accurately.
  • The traditional concept of capital maintenance has been dispensed with. A 2006 Company may make a distribution (whether dividend or share buy back) or provide financial assistance or undertake other share capital reorganisations, provided a simple solvency test is met.
  • Companies incorporated under the 1931 Act remain available for use as listing vehicles in a suitable case, for example where there has been a previous listing under this Act and the promoters wish to replicate the same structure.

It is possible to establish an Isle of Man company (whether a 1931 Act Company or a 2006 Act Company) on a same-day basis. If necessary, a company can be formed with standard articles of association (or even taken "off the shelf") and suitable articles adopted later, prior to the listing.

Simcocks can prepare articles which meet the requirements of the AIM rules. The articles can have incorporated therein provisions (such as pre-emption and notification of interests in shares) which are not mandated by either the 1931 Act or the 2006 Act, thus ensuring that the company not only complies with the AIM rules but has the "look and feel" of a UK company.

Please also note that it is possible with the consent of the Isle of Man Department of Economic Development to re-domicile or migrate companies originally incorporated elsewhere to the Isle of Man (subject to suitable reciprocal legislation being in place in the overseas jurisdiction). In this respect, Isle of Man legislation exists for both 1931 Act companies and 2006 Act companies. Jurisdictions which allow migration out include Jersey, the British Virgin Islands and many civil law European countries. Migration is deemed not to create a new legal entity, or to prejudice or affect the continuity of the company which was formerly a company incorporated elsewhere and becomes an Isle of Man company.

It is not necessary for the prospectus/admission document to be submitted to any regulatory authority for prior approval in the Isle of Man. Accordingly, there is no question of the timetable to listing being delayed by approval in the Isle of Man having to be obtained.

As a corollary, the company may undertake a preliminary marketing of its shares on the basis of a pathfinder prospectus (with the usual "red herring" language appearing on its face) without any Isle of Man implications.

Isle of Man companies listed on AIM can use the CREST system to hold and transfer their shares and other securities in electronic or paperless form. The articles will provide for shares to be in uncertificated form and for title to be transferred by means of an instruction issued in accordance with the rules of the CREST system. An investor applying for shares may elect to receive them in uncertificated form if such investor is a system member (as defined in the Uncertified Securities Regulations 2005 (applicable to 1931 Companies) / Uncertified Securities Regulations 2006 (applicable to 2006 Companies) in relation to CREST.


Simcocks is a leading Isle of Man law practice. Our Investment Funds and Capital Markets team has an international background and provides a wide range of services.

Our experience in this field means we can give clients the expert and responsive service they need to enable matters to be concluded swiftly and effectively.

We offer a competitive service with all fee earners encouraged to take a realistic and commercial approach to addressing the needs of clients to ensure we add tangible value.

In a typical listing, we act in conjunction with the English legal advisers to the company and provide advice and assistance on all Isle of Man aspects of the transaction. Among other matters, we will draft or review and amend the Memorandum and Articles of the company; review the admission document to ensure compliance with Isle of Man law; review other documentation; and provide an Isle of Man legal opinion.

Post listing, we continue to act as required, including in relation to further fund raisings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions