This was posted as a comment on the bnloog this morning but asks too important a question for it nopt to be shared - so thank you Anrigaut whoever you might be:
IOM is proud to announce that it is now “in first place in respect of the largest number of non-UK incorporated AIM top 100 companies”, with a market share of 18.6%, ahead of (the well-known tax havens of) Bermuda and the BVI — in second and third place respectively.
This news is also reported here.
I know little about this subject other than that AIM-listed companies are (or so I understand) subject to less regulation than LSE-listed ones and that there are certain tax advantages (as well as more risk) for investors. But one could well wonder what these companies, with a “current market capital of £1.14bn”, actually DO on such a small island. The mind boggles
As to who they are — who can say? The official AIM website appears to have no search facility by geographic location. An independent site at http://www.aimlisting.co.uk does have such a facility, but a search for Isle of Man companies returns the helpful message “Sorry but no results were found” (same result for Bahamas, Jersey & Guernsey and just one company under BVI — but around 30 in East Anglia). Obviously providing information to this site is optional — but is anyone surprised that not one of the 50 IOM-incorporated AIM companies choses to do so?
The IOM Minister for the Department of Economic Development, John Shimmin MHK, is reported as saying: ‘This research shows the Isle of Man performing very well in the AIM market despite difficult market conditions and serves to illustrate that the island is the preferred gateway to London for international corporate capital raising requirements. This is another example of how the Isle of Man is a significant contributor to the City of London and why the Crown Dependencies are important to the UK economy as a whole.'
No doubt this will be on the agenda when the Lord Mayor of the City of London visits the island next week:
“The Isle of Man has been building relations with the Lord Mayor's Office in recent years, and one of Alderman Wootton's predecessors in the role, Alderman David Lewis, described the Island as a ‘core asset' for the City.”
If I might add an appropriate note - if ever there was evidence that the City runs its own government with its own foreign policy this sort of thing supports the thesis.
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The City of London aka the Square Mile is a rotten borough that should have been abolished years ago. In an ideal world it would be annexed by the adjacent London borough, the real elected Mayor of London would preside over the Lord Mayor’s Parade and the City of London police would be disbanded and made part of the Met.
Whatever is wrong with the Met at least the Met Commissioner is accountable to the elected Mayor. The City of London police aren’t accountable to the public at all as far as I can see.
http://www.guardian.co.uk/commentisfree/2011/oct/31/corporation-london-city-medieval
You make an interesting point Robert. As far as I can see the City of London police are overseen by the Corporation of London, notorious for the fact that it has an electorate of corporations whose votes are tied to the number of employees they have. That is the big financial institutions. The City of London police boast that they lead for the of UK on financial fraud.
I smell a big rat here. The big financial institutions with their participation in global fraud and the UK tax haven network oversee the very police force allegedly supposed to be investigating such issues. AND, no banker ever gets prosecuted, apart from the occasional 3 that get extradicted to the US (what happened to them?).
What a coincidence!
This looks like the latest in a series of typically ‘offshore’ activities being heavily promoted by the IOM government:
“A public-private partnership body supported by the Isle of Man Department of Economic Development, the Isle of Man Captive Association expects to attract significant interest from prospective captive owners and those wishing to re-domicile their existing captives.”
“Alan Crowe MLC, the Department of Economic Development’s Political Member for Financial Services, added, “I am confident that the Captive Live conference will provide great opportunities for the Isle of Man. It is the ideal environment to meet, learn and share ideas with leading players in the captive industry.”
http://www.isleofman(dot)com/News/business/article.aspx?article=42878
This whole island is ‘captive’ to the financial services industry, aided and abetted by the government, and all the signs are that its dependence on this sector is increasing rather than decreasing under Mr Bell’s direction. Other recent pushes have included so-called ‘high profile events’ in China and Korea aimed at attracting ‘UHNW’ individuals and companies and a publicity campaign to persuade more British expats and international companies to domicile their pensions on the island: http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/8859610/Trust-us-says-the-Isle-of-Man-were-the-pension-place.html
With all this and more, it’s hard to see how Mr Bell can really expect the island to be seen as anything other than the tax haven it surely is. If it looks like a duck, …
Mr Murphy, the item below
http://www.zerohedge.com/news/subordination-101-walkthru-sovereign-bond-markets-post-greek-default-world
is interesting.
NOTHING to do with the thread at all, but worth, well-worth, a read.
Sometimes you have to go back and re-read to nearly-understand it.
I think life is going to get really interesting !!
[…] Tax Research also notes, the three largest sources of overseas investment in London’s (stunningly lightly regulated, […]
They play “pass the parcel” with packages of highly leveraged debt. Be on the plane to Monaco or somewhere when the music stops.
Gosh – no they don’t. Most of the Crown Dependency-incorporated companies listed on AIM carry on their businesses – and pay tax – in countries other than the UK. It’s just that AIM investors like UK-style companies (which these territories offer), but actually using a UK company would lead to all sorts of unnecessary disadvantages (like UK taxes, even though they do not carry on business in the UK).
Have a look at how many Hong Kong Stock Exchange listings in the last 12 months were of companies incorporated in Hong Kong…
Ah, so you want the infrastructure of the UK but to not pay for it
I think that’s a definition of freerider isn’t it?
The companies do pay for it – the only infrastructure of the UK that they use is the London Stock Exchange, to whom they pay annual fees.
You might prefer it if everyone went to Hong Kong to list (your wish has been partially granted the past few years anyway). All that means is less tax money, and less money in the hands of the public sector
If they don’t pay I’d much rather they took their risk elsewhere – yes
But they do pay, and the pose no risk at all. If you look at the types of company that have used the Crown Dependencies to access the UK’s capital markets, they are doing everything from building windfarms to investing in agriculture to exploring for oil, gas and minerals. If you don’t invest in these companies, and you’re not a creditor, they pose no risk to you at all. These are not entities that can cause systemic issues, they are just normal corporates
That don’t pay tax
The LSE pays tax on the income it receives from them. The companies do not pay tax because there is no part of the UK’s tax code that requires them to
Then we need to change it
Right, so we are going to replace a system that currently delivers some tax (via the LSE) to HMRC with one that delivers no tax to HMRC (because companies won’t list on the LSE if that subjects them to UK tax).
Good plan. It will certainly be applauded in Frankfurt, Hong Kong, Singapore and Vancouver, whose stock exchanges will be delighted to welcome the UK’s cast-offs
I’m happy with that
The less dependence we have on financialisation in this country the better right now
Reported yesterday on the Cooperative Legal Services website:
“Companies not registered in Britain do not have to pay stamp duty when a London property is sold or the 40 per cent inheritance tax when an owner dies in the Isle of Man.
This costs the city of London hundreds of millions of pounds each year and is increasingly attracting foreign firms looking to benefit from the British market but unwilling to be subjected to tax.
In 2011, companies based in the Isle of Man purchased £82.3 million worth of London property – up from £49 million in 2009.”
http://www.co-operative.coop/legalservices/latest-news/Probate–Estate-Administration/isle-of-man-criticised-as-inheritance-tax-haven/?ArticleId=801272339
That statement isn’t correct, though, is it? The use of vehicles in the IOM and elsewhere is so that you can sell the COMPANY (which is not an asset whose transfer is currently subject to stamp duty in the UK).
Similarly I think if you are resident and domiciled in the UK and died you would pay IHT on the value of all the assets that you passed on for inheritance, including the shares in foreign companies. It would presumably work if you were not resident in the UK, however (not sure about how domicile fits in)