Offshore Banking Isle of Man, Payment Platform, UK Banks, Bank Licenses

54 banks are currently operating in Isle of Man and despite the decrease in this figure during last five years, the magnitude and scale of offshore banking Isle of Man transactions raised. Deposits accumulated in Isle of Man’s banks were around £30 billion. Major banks providing offshore banking services, such as Royal Bank of Scotland, Barclays bank and Merrill Lynch have established their branches on the island. Recently HSBC also moved to Isle of Man.

Many international banks have established their branches on Isle of Man providing global payment-processing services and Manx Telecom provides secure e-payment platform in world’s major currencies that allows conducting global transactions.

Isle of Man has mainly branches of big UK banks and some foreign banks. Banks on the island are engaged in providing offshore banking services to UK citizens and foreign residents. Financial services are quite diverse. Beyond deposits and trust management island banks also provide insurance, collective investment opportunities and investment management.

Like in many offshore banking jurisdictions like Cyprus on Isle of Man banks have different licenses. A financial institution can get full or restricted banking license. Licenses are granted and banking sector is regulated by Financial Supervision Commission based on principles set in Financial Supervision Act of 1988. To be eligible for full license a bank must have fully staffed local office on Isle of Man, while restricted license that allows conducting offshore banking operations from outside the island through a local banking institution.

According to the Banking Act of 1975 a bank that has no local premises or staff and is operated by local bank is referred as “managed bank” and since 1989 Treasury can exempt it from income tax for the specified period on all or part of the profits.

The exemption is granted if the following conditions are met:

- does not conduct any transactions with Isle of Man resident except banking institutions;

- has received the license under Banking Act of 1975;

- is ran by other licensed bank;

The Banking Act sets bank’s contractual obligation to keep client specific information secret and confidential. There are few cases, when this principle can be hindered. Financial Supervision Act of 1988 says that these cases include situation, when it is required to help criminal proceedings or enabling FSC to conduct its duties.

Banking sector of Isle of Man is subject to mandatory deposit insurance requirement. Deposits are ensured up to 75% on first £20,000 or equivalent in other currency.

Tags: Bank Account Isle of Man