Mediaboss Marketing

Sean O'Hare reports on the latest offshore finance news from the Crown (Other OTC: CWLDF.PK - news) Dependency

Top Manx ways for expats to save

Expat savers depositing in the Isle of Man (Other OTC: MAGOF.PK - news) are increasingly reassessing their options as low interest rates have many to move away from easy-access, no-notice accounts and towards longer, fixed-term banking in search of better returns.

Mark Waterhouse, president of the Isle of Man Bankers Association , also reports that there is also a move towards structured deposit accounts that require a three- to five-year investment with returns linked to the performance of a range of indexes, including the FTSE. They are seen as an alternative to the standard savings product, offering flexibility, high returns and the potential to outperform inflation while still providing capital protection.

The benefits of depositing offshore, on the Isle of Man, include interest on savings and investment accounts paid gross, without deduction at source.

Currently there are currently four “no-notice accounts” on the Isle of Man that offer interest rates of two per cent and above. The AIB International Savings Instant Saver account pays 2.5 per cent AER (SNP: ^AERY - news) on a yearly basis, with a minimum deposit requirement of £5,000.

Nationwide International ’s Bonus Access Account pays 2.4 per cent AER on a yearly basis, with a minimum deposit requirement of £25,000.

Lloyds TSB (LSE: LLOY.L - news) International ’s International Bonus Saver offers 2.01 per cent monthly AER on a £100,000 minimum deposit, while Britannia International ’s Access Plus offers 2 per cent yearly AER on £50,000 minimum deposit.

The best Isle of Man notice accounts, ranging from 95 days to 180 days include: Nationwide International’s Bonus 95-day Account, that offers 2.58 per cent monthly AER on a minimum £25,000 deposit; Nationwide International’s Bonus+1 Account, that offers 2.48 per cent AER monthly return on £25,000 minimum deposit with a 95-day notice period on withdrawals; and Alliance and Leicester International ’s Select Notice 180 Iss 1, that offers 2.25 per cent monthly interest on a £5,000 minimum deposit.

The best Isle of Man fixed rate products on offer start with Lloyds TSB International’s Fixed Term Deposit, paying 4.50 per cent on a five year bond and £10,000 minimum deposit.

Alliance and Leicester International’s Fixed Rate Bond Issue 12, pays 4 per cent and requires a £5,000 minimum deposit that matures on February 28 2017.

The top place for alternative growth

The Isle of Man is the number one location among non-UK AIM top 100 companies, hosting more than any other jurisdiction. It has retained its market share over the past two years, leading overall with 50 companies listed.

The businesses registered in the Crown Dependency had placements on AIM with a total market capital of £1.14 billion, according to research commissioned by the Isle of Man government and conducted by Hemscott .

Bermuda and the British Virgin Islands took second and third place respectively.

Commerical flexibility, its close links to the City of London (LSE: CIN.L - news) , cheap cost base, familiar corporate structures and a fiscal regime that includes a zero rate of corporation tax are considered to be the key factors that explain the Isle of Man’s domination of London’s Alternative Investment Market.

With more than 500 international companies now listed on AIM, it is widely regarded as the world’s number one market for growth.

Indian companies have been a key beneficiary of the island’s AIM infrastructure, with a total of £1.6 billion raised for them since 2006.

John Shimmin, minister for the department of economic developmen is pleased with the figures. He said: “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.

“These findings are a great vote of confidence for the Isle of Man and represent an excellent return on the good work that the private sector and Government have invested into promoting our attractive proposition.”

Praise for help in creating UK jobs

In his first visit to the Isle of Man, the Lord Mayor of London, David Wootton, praised the island’s role in supporting the creation of jobs and growth in the British economy.

Alderman David Wootton explained how the Isle of Man, thanks to its popularity as an international finance centre and jurisdiction for expat depositors, played a pivotal role in providing liquidity to the wider British economy.

“That liquidity will make a major contribution in supporting business in the UK and abroad, and creating jobs and growth,” said the Lord Mayor when he delivered the Chief Minister’s international lecture at the Sefton Hotel in Douglas (Xetra: 609900 - news) .

Alderman Wootton told guests from the business community that the Isle of Man exemplified just how diverse and dynamic small economies could be, and what’s more, a diversity founded on the success of the financial and professional services sectors.

He said the Isle of Man and the City of London had a “longstanding and much-valued partnership that shared the same values and the same commitment to the very highest standards of corporate governance”, while reminding the audience of the fact that the UK and the Isle of Man were only two of eight on the OECD White List.

His views echoed those of Conservative MP Mark Field who last year felt the need to defend international finance centres against what he called “a one-sided debate that demonstrates a fundamental lack of understanding of the tax haven’s role in the global financial market”.

In defence of the regimes of the crown dependencies as a whole, the Westminster MP said: “Together the crown dependencies make a significant contribution to the liquidity of the UK market.

“These funds are largely accounted for by the 'up streaming’ to the UK head office of deposits collected by UK banks including Lloyds Banking Group and Royal Bank of Scotland (LSE: RBS.L - news) , as well as Barclays (LSE: BARC.L - news) , HSBC (LSE: HSBA.L - news) , Santander (Madrid: SAN.MC - news) and a number of building societies.”

The Lord Mayor believed the partnership between the Isle of Man and the City would be crucial in helping to create wealth and economic well-being.

For the UK and the City he shared Chief Minister Allan Bell’s vision for the Isle of Man of maintaining a prosperous and caring society based on fairness, opportunity for all, social cohesion and quality of life.

He summarised: “We are both small in size but punch well above our weight in the global economy. We can be justly be proud of the standards and governance we demand.

“And we are also well placed and well able to meet the challenges of the future and play our part in creating jobs and growth.”

This piece was originally published in the Telegraph Weekly World Edition.

Link:
Isle of Man: offshore saving news roundup