The Isle of Man has a well-regarded Category 1 ship register, offering for almost thirty years a high quality service to the owners and operators of vessels of unlimited tonnage, type and size navigating throughout the world. While a visit to any major Mediterranean or Caribbean marina will demonstrate that the Isle of Man is a flag state of choice for superyachts, the island itself has become a centre of excellence for knowledgeable maritime professionals; commercial fleets and specialist vessels are registered in, owned and managed from the Isle of Man.
While the Isle of Man Ship Registry is a component of the British ‘Red Ensign Group’ of registries, affording the support of British consular services worldwide and British Royal Navy protection, it operates separately from the United Kingdom register and offers prompt, professional service, reasonable fees and no annual taxes on tonnage.
In recent years, the ship registry has been joined by the Isle of Man Aircraft Registry, Europe’s only dedicated register for private and corporate aircraft. The aircraft registry also performs to high regulatory standards and its fee scale is designed to cover costs, not in itself to create a profit for the island’s government, meaning that the register is more cost-effective and efficient than many similar registers. The Isle of Man’s registration prefix is ‘M-’, which can be used to afford anonymity, being different from the ‘G-’ registration of the United Kingdom.
For the owners and operators of aircraft and ships, the Isle of Man’s key benefit is its unique position as the only jurisdiction with a corporate tax rate of 0% for most purposes but which lies within the EU VAT area. This means that companies owning and operating aircraft and vessels can potentially benefit from being both free from local corporate taxation and having their aircraft and ships deemed to be ‘VAT paid’ and in free circulation in the European Union. The Isle of Man flag is a clear demonstration of VAT paid status and means that aircraft and vessels with this status arriving from outside the EU do not have to go through a temporary importation procedure with customs authorities, as would be the case for aircraft and ships registered outside the EU VAT area.
Isle of Man businesses which are registered for VAT may import aircraft and ships to the Isle of Man with reclaim or deferral of VAT and thereafter reclaim VAT on Isle of Man and UK expenses. British insurers would consider an Isle of Man-registered aircraft or ship a non-UK risk, meaning that insurance premiums could be paid with a saving of 6% in terms of the Insurance Premium Tax that would otherwise be payable.
Kinley Legal provides legal advice and assistance to the owners and operators of corporate and private aircraft, yachts and other vessels in matters including:
- choice of jurisdiction and advisers upon registration of aircraft and ships;
- planning of onshore and offshore company and trust structures for the holding of aircraft and ships, operations and employment of the crew, with a view to ring-fencing legal risks and optimising tax liability;
- legal and practical aspects relating to first registration, re-registration, finance and re-finance of aircraft and ships;
- construction, sale and purchase contracts and leasing arrangements; and
- anti-money laundering and other compliance checks on clients originating from Russia and other CIS countries, in which we specialise, by proposed operators and service providers.
In addition, Kinley Legal advises financial institutions lending against Isle of Man-registered aircraft and ships or lending to Isle of Man, English or Irish companies with aircraft and ships registered elsewhere, on matters involving asset finance and the taking and perfection of security, including the provision of formal legal opinions on relevant provisions of local law.
The firm is also ready to assist with applications to the International Registry of Mobile Assets under the Cape Town Convention and Aircraft Protocol, particularly upon their ratification in respect of the Isle of Man.
As a law firm, Kinley Legal assists with registration and setting up structures but does not have its own Isle of Man aviation or maritime service provider or corporate or trust service provider; it offers its clients a choice of service providers for managing aircraft and ships and for setting up a company, trust or other structure in the Isle of Man or re-domiciliation of an existing structure to or from the island.
Kinley Legal also offers specialist expertise and knowledge of the space industry. Christopher Kinley has knowledge of geostationary satellite operations, having received specific training in this area from a leading global satellite operator. Kinley Legal helps space industry representatives, including those from the CIS in which we specialise, use the Isle of Man as a virtually tax-free jurisdiction for holding structures and joint ventures and a financially efficient platform for international space-related projects.