Isle of Man: Observations On The Consultation For A Register Of Beneficial Ownership

Last Updated: 15 October 2014
Article by Camilla Griffiths-Rand


On 30 June 2014, the Cabinet Office of the Isle of Man Government published a consultation paper1 on the Isle of Man's current regime for identifying the beneficial ownership of companies and asked whether a centralised registry (either private or public) would improve transparency of the ownership and control of companies in the Isle of Man. This article considers some of the issues which the consultation paper raises.


At the Lough Erne Summit in June 2013, the G8 countries endorsed, inter alia, the following core principles considered fundamental to the transparency of ownership and the control of companies and legal arrangements:

  1. Companies should know who owns and controls them and their beneficial ownership and basic information should be adequate, accurate, and current. As such, companies should be required to obtain and hold their beneficial ownership and basic information, and ensure documentation of this information is accurate.
  2. Beneficial ownership information on companies should be accessible onshore to law enforcement, tax administrations and other relevant authorities including, as appropriate, financial intelligence units. This could be achieved through central registries of company beneficial ownership and basic information at national or state level. Countries should consider measures to facilitate access to company beneficial ownership information by financial institutions and other regulated businesses. Some basic company information should be publicly accessible.
  3. Trustees of express trusts should know the beneficial ownership of the trust, including information on beneficiaries and settlors. This information should be accessible by law enforcement, tax administrations and other relevant authorities including, as appropriate, financial intelligence units.

Whilst acknowledging that a generic approach may not be the most effective, the G8 consider these principles to be essential to ensure:

  1. the integrity of beneficial ownership and basic company information;
  2. the timely access to such information by law enforcement for investigative purposes; and
  3. the legitimate commercial interests of the private sector.


Recommendation 242 deals with transparency and the beneficial ownership of legal persons in the following terms:

"Countries should take measures to prevent the misuse of legal persons for money laundering or terrorist financing. Countries should ensure that there is adequate, accurate and timely information on the beneficial ownership and control of legal persons that can be obtained or accessed in a timely fashion by competent authorities. In particular, countries that have legal persons that are able to issue bearer shares or bearer share warrants, or which allow nominee shareholders or nominee directors, should take effective measures to ensure that they are not misused for money laundering or terrorist financing. Countries should consider measures to facilitate access to beneficial ownership and control information by financial institutions and Designated Non- Financial Businesses and Professions (DNFBPs) undertaking the requirements set out in Recommendations 10 and 22."

It would seem that the Isle of Man has already addressed this recommendation.

Companies incorporated under the Companies Act 2006 (CA 2006) are legally obliged to have a registered agent. A registered agent must be a corporate service provider, who is licensed by the Financial Supervision Commission (FSC) under the Financial Services Act 2008 (FSA) to provide corporate services (within Class 4 of the regulated activities set out in Schedule 1 to the Regulated Activities Order 2011 (CSP). All corporate service providers have an existing obligation to identify and hold information on the beneficial owners of companies under anti-money laundering and countering the financing of terrorism legislation on the Isle of Man.

However, unlike companies incorporated under the CA 2006, companies incorporated under the Companies Acts 1931-2004 (CA 1931) are only statutorily obliged to have a registered office in the Isle of Man and may have no other presence in, or connection to, the Isle of Man. Additionally, until last year, there was no legal obligation on such a company to hold information on its beneficial owners.

The International Monetary Fund (IMF) 2008/2009 Financial Sector Assessment Programme Inspection of the Isle of Man considered, amongst other things, the Isle of Man's compliance with international standards for anti-money laundering and countering the financing of terrorism. The IMF scored the Isle of Man as "largely compliant" in respect of its ability to provide the appropriate authorities access to the beneficial ownership information of companies, where a proper request for information has been made. A proper request for information has to be made, being one made via the appropriate channels and not simply a fishing trip made in an attempt to satisfy someone's idle curiosity.

The IMF did however suggest that the Isle of Man take steps to address the deficiency in relation to the information relating to the beneficial ownership and control information held on certain companies incorporated under the CA 1931. The Isle of Man did so through the introduction of the Companies (Beneficial Ownership) Act 2012 (CBOA 2012) which came into force on 1 September 2013.

Under this legislation, a company incorporated under the CA 1931 must appoint a nominated officer who is either an individual resident on the Isle of Man or a CSP (Nominated Officer). Each member of a company incorporated under the CA 1931 who is not the beneficial owner of that member's interest must notify the Nominated Officer of certain required details. In respect of a beneficial owner who is an individual, the required details include: their name, residential address, nationality and date of birth. Where a beneficial owner has legal personality, the required details include: its name, legal form, jurisdiction of incorporation/formation, governing law, registered office and any registration details.

There are prescribed situations where the Nominated Officer must disclose the required details to relevant enforcement authorities but, essentially, although there is a record of the beneficial ownership of the company, the required details remain private and are held by the company, and the company alone.


1. Maintain Status Quo

As an international business centre, the Isle of Man prides itself on being an open, transparent and well regulated jurisdiction which is responsive to the evolving standards of the international community. Where necessary, it has promptly introduced domestic legislation to ensure its continued compliance. It is arguable that the introduction of the CBOA 2012 in conjunction with the existing requirements of companies incorporated under the CA 2006, satisfies the requirements of FATF Recommendation 24. A new initiative, no matter what the source, should not be a reason to abandon previous established arrangements which achieve the same goals. That the present United Kingdom Government, mere months shy of a general election, has decided to go further and plans to proceed with establishing a publicly accessible register of beneficial ownership of companies does not mean that the Isle of Man has to follow suit. It is also worthy of note that the impetus for the register in the United Kingdom may not be wholly to promote full disclosure of beneficial interests.

Additionally, the Isle of Man is no stranger to anti-money laundering and countering the financing of terrorism legislation especially for any industry which falls under the requirements of Schedule 4 of the Proceeds of Crime Act 2008 (business in the regulated sector), which includes CSP's. Such businesses are already required to identify and verify applicants for business and their beneficial owners through satisfactory evidence of, amongst other things, name, date of birth, address, and nationality, are required to make sure such information remains up-to-date and to report suspicious transactions accordingly where considered appropriate.

2. A Private Register

One option would be to follow the United Kingdom Government's plans and introduce a register of beneficial ownership but keep its contents private. Presumably, the Nominated Officer or CSP would be required to provide the information they hold on the beneficial ownership of the company to whichever government department is tasked with compiling and maintaining the register. At face value this may be a worthwhile compromise – such beneficial ownership information is provided to a government department and therefore "can be obtained or accessed in a timely fashion by competent authorities".

One benefit of an independently held private register would be for authorities to access the information without contacting the Nominated Officer or CSP and thus reducing the risk of alerting the company or beneficial owner that they were under investigation (and thereby giving them an opportunity to take steps to evade justice). However, this potential advantage assumes the information held at the private registry would be up-to-date so it is questionable if a private register would really give authorities any tangible advantage over the current situation where the authorities contact, through the form of a notice setting out the information they seek, the Nominated Officer and/or CSP (as applicable). Additionally, the quality of the information held on the register would only be as good as the reporting accuracy of the filing party.

3. A Public Register

The third option would be for the beneficial ownership obtained by the Nominated Officer and/or CSP to be made publicly available, perhaps in much the same way as shareholders are currently listed on annual returns filed with the Isle of Man Companies Registry. This obviously raises privacy issues and there are many perfectly legitimate reasons why shares in companies are held by way of split legal/beneficial ownership. Even if a company had no dishonest reason for hiding its beneficial ownership, with growing data protection, privacy and identity theft concerns, would owners feel comfortable permitting such information to be public, especially if they could re-domicile their company to a comparable offshore jurisdiction and keep their beneficial interests private? Our reservations regarding a private register also apply.

Consideration should also be given to how companies who hide their true beneficial ownership for fraudulent reasons would react. A public register may well encourage such companies to re-domicile to less well regulated jurisdictions. This would not solve the transparency problem - only move it to a jurisdiction where enforcement agencies may find their job more difficult. Further, a public register may only encourage greater use of more complex structures including legal arrangements, whose beneficial ownership is not yet required to be identified. Both of these factors would surely defeat the object of the G8 proposals?

However if the international expected standard does evolve to a register of beneficial ownership, the Isle of Man might use the opportunity to showcase itself as a leading a jurisdiction which will do all it can to maintain its clean, transparent and well-regulated image and one which will take all necessary steps to tackle the threat of illicit finance, tax evasion and corruption. However, such zealotry will potentially damage the future of offshore finance in the Isle of Man if competing jurisdictions adopt a more pragmatic approach.


There is a fine line between balancing the need to play a part in what must be a global effort to increase transparency so to reduce crime, corruption and to increase trust in doing business with offshore companies and the need to continue to be a clean jurisdiction which is both attractive to businesses and competitive. So far, only the United Kingdom and France have announced an intention to establish a public register of beneficial ownership. The danger of introducing a register at a time where none of our competitor jurisdictions have done so or stated their intentions to do so, would put the Isle of Man at a competitive disadvantage and the risks involved should not be underestimated.

The purported increased transparency of beneficial ownership which may be achieved by the introduction of a register (public or private) will not, alone, neutralise the financial, economic and social impact of cross border tax evasion, tax avoidance, money-laundering, corruption and other crimes. However, the Isle of Man promptly reacted to implement the suggestion made by the IMF in relation to the beneficial ownership of companies incorporated under the CA 1931 and no doubt will continue to do all it can to maintain its compliance with international standards. Regardless of how beneficial ownership information is maintained, the information is only as reliable as the reporting competence of the person providing it. There are no guaranteed, fool proof steps which can be undertaken to banish the improper use of companies and other legal arrangements.




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