It is true that expressions like “offshore” and “tax haven” have no agreed standard definition, which is a problem. I understand why they prefer to be called “international finance centre” – the expression is a lot less tainted than “offshore”.

Why, of why?

No, it doesn’t. It simply is a result of a great PR to answer the mis-conception the offshore term has received over the past few years due to international efforts against money laundering, tax evasion and terrorist funding. Hollywood did not help either…Not that these are not serious crime, but their number pale in comparison to the number of legit investments and accounts held in “offshore” jurisdiction. Therefore, offshore centres are trying to not throw the baby out with the bathwater by changing their brand image. Pretty smart.

But does it really makes a difference?

No it doesn’t. The fact that we name something differently does not change its substance. I don’t want to go philosophical here, but a word is slightly more than the signification one gives it. Hence changing their appellation from offshore to international finance centre does not change the way your account or platform work, its benefits and restrictions.

Time will tell…

At the end of the day, this will only succeed if people stop using the term offshore to designate such centres. And this battle is far from over! Old habits are hard to get over – especially in england!!

The Isle of Man is a ’so-called’ low tax economy with no capital gains tax, wealth tax, stamp duty or inheritance tax. This means that for non-resident (i.e. if you don’t live there) you don’t pay tax. This alone explain why so many people like the IoM. As simple as that. But there is more to this tiny island than a simple tax-attractive piece of land.

In order to become one of the leading offshore center, they had to set in place protections laws that ensures your money will still be there when you will need it. There is no point building up wealth if something has gone wrong along the way with the company looking after your money. Therefore, the IoM protections mirror or exceed the investor those you will fin in jurisdictions such as the UK, the US and Australia.

Two that are particularly significant.

1975 – Plan Holder Protection Act
The first is the 1975 Plan Holder Protection Act which was updated last in 2000. It is there to protect investors against losing their money if their company did fail. The way this works is that each quarter, financial institutions have to pay a premium based on the size of funds they are managing into a central provident fund managed by the IOM authorities. This fund then guaranties 90% of the value of your account by law.

1996 – Financial Service Act
The second is the 1996 Financial Service Act of IOM. It regulates and supervises financial companies to be sure that investor interests are safeguarded. As an example, that they have to submit audited accounts every six months instead of annually like they would in the UK or US for example. This is for the IOM to be sure that client monies are properly accounted for. Another part of that law is that all assets under management by those companies must be held by a third-party custodian to be sure that a company can’t use client money to bail itself out should they experience financial difficulties.

On top of all that, the Bee Gees were born there! How not to like such a place !!