DOUGLAS, Isle of Man (HedgeWorld.com)–Even though Isle of Man officials are expecting a loss of banking deposits as a result the European Union Savings Directive, assets under administration in the jurisdiction continue to grow.
The EU directive became effective July 1 and requires additional tax reporting and in some cases increased withholding for offshore hedge funds and their service providers.
Statistics released last week by the Isle of Man government show that the rise in bank deposits during the last year should act as a cushion to absorb any of the outflows of fund assets that may result from the new regulation.
“The figures from the annual report show that the Isle of Man is a jurisdiction of growth and change,” said John Aspden, chief executive of the country’s Financial Supervision Commission, in a statement. “The recent changes in regulation, particularly in the funds sector, show that we are responding positively to the globalization of business and business needs.”
Mr. Aspden was referring to a funds initiative that was introduced in the Isle of Man’s 2003 budget. The Treasury Minister dropped the tax rate for all third-party fund administrators and hedge fund mangers to zero, and removed the regulatory overlay that required local administration of all overseas incorporated funds.