Common misunderstandings / misconceptions about doing business in different jurisdictions.
Peregrine provide international structuring solutions, primarily from the Isle of Man but also other highly regulated offshore jurisdictions. There has and continues to be a misunderstanding around offshore jurisdictions due to some negative portrayals in the main stream media. Places like the Isle of Man offer clients a stable jurisdiction with a well-established system of law and will often act as a gateway for international investment, which brings value to multiple jurisdictions.
Five advantages of doing business in the Isle of Man
- The Island boasts a highly skilled professional workforce with experience in international affairs and a pro-active helpful regulator;
- The Island has a pragmatic, flexible legal and taxation system;
- The Island is a politically stable jurisdiction, with the oldest continuous parliamentary body in the world;
- Located in the middle of the Irish Sea, the Island is English speaking, has a central time zone and has easy transport links to the UK and beyond;
- Although the Isle of Man is not part of the United Kingdom, it is treated as part of the UK and European Union (EU) for Customs, Excise and Value added Tax (VAT) purposes.
1/ Has the regulatory environment in your jurisdiction, as it relates to tax or audit services, created any misunderstandings for international clients? How have you resolved this?
As a corporate and trust service provider the regulatory, compliance and tax environment evolves on an almost daily basis. This has been the case for 30 years, but specifically over the past five or so years with the introduction of FATCA, CRS, substance requirements, tax updates and enhanced compliance. Clients may often see this as a burden and unnecessary cost, the reality is the work carried out by ourselves to understand the rationale, ensure the appropriate advice is obtained in areas of regulation, law, substance and compliance ensures the structuring remains compliant and robust. This all adds value to the clients at the outset and on an ongoing basis. Especially as it is often the environment where we deal with entrepreneurs and business executives, by ensuring these details are in order it allows the client to focus on the strategic of growth of the business and opportunities that require their attention.
Scope of Work
2/ Does the nature, scope and pricing of accountancy work ever create misconceptions when working on a cross-border transaction such as a merger or acquisition? Any examples?
Sometimes this is the case. The Isle of Man is a premier offshore service provider, all the benefits of utilising a jurisdiction will in cases carry a fee premium when compared to other offshore centres. The Isle of Man is on the OECD compliant list with a small number of other jurisdictions for tax transparency. Therefore we do face challenges on pricing so the key is to explain the reasoning for fee pricing, the added value of utilising a jurisdiction such as the Isle of Man and managing the relationship accordingly.
This is also reflected in the scope of the work. Often when we provide directorship services to Isle of Man based companies we will be considering risk, substance requirements and general management and control of the entity. The scope of this can vary depending on the activity and risk of the business, it’s therefore imperative to manage the clients expectations on the scope of work as some of these matters aren’t front and centre in the clients mind and could therefore be a surprise.
3/ Has the interpretation of professional terminology and language ever caused communication problems on a transaction you have been involved with? How have you subsequently handled this?
The majority of transactions, whether that’s engaging with clients at the outset, to purchasing assets around the globe, terminology and language are always a consideration. As service providers part of our role in this is reaffirming clients and advisors understanding of situations and solutions and reading and listening keenly to clients language back to ensure all parties are on the same page. This can be challenging in new situations, perhaps where you don’t know the client or advisor so well, or where transactions are urgent and we are trying to get the message across that the various regulations and laws that we sit under need navigating correctly. The best way to handle this is to build that client relationship as quickly as possible.
Peregrine Corporate Services Limited is licensed by the Isle of Man Financial Services Authority.