Interview with Emer Dowling - director at Abacus Trust Company Limited
By: Tessa Hawley
01 November 2011
Emer Dowling is a chartered secretary and director at Abacus with more than 20 years experience in the trust and corporate business.
Her broad experience ranges from the administration of trusts and special purpose companies for wealthy individuals, to employee share trusts and remuneration planning, yacht administration and Isle of Man partnerships.
How is the Island’s fiduciary service industry faring at the moment?
The fiduciary service industry felt the effects of the international banking crisis of 2008 and indeed the ongoing economic upheaval since then. The stalling worldwide economy and the ongoing tightening of UK and international tax law continue to present challenges for the Isle of Man.
However I believe we have managed to weather the storm well proving that the Isle of Man as an offshore centre is robust continuing to take its opportunities even in hard times. In times of uncertainty wealth protection in a sound jurisdiction like the Isle of Man is a positive.
For someone not familiar with the fiduciary services offered by Abacus – can you explain what you do and what services you provide?
Abacus has been operating for over 30 years and we have built expertise in a wide range of international fiduciary and administration services.
Very few of our clients’ requirements are the same and we tailor solutions to suit each client’s need. Those needs do however generally fall under the following headings:
Trusts and companies: Individuals and businesses across the globe require the formation of companies or trusts to ensure tax efficiency, hold personal or business assets, protect wealth, raise finance or restructure businesses.
The Isle of Man with its favourable tax regime and mature company and trust law is the ideal place to locate such vehicles and we have a long track record in the formation and ongoing administration of them.
Trust and corporate solutions:
This is more than just formation and administration. In-house we provide accounting support for all our structures. We also have a team of dedicated tax professionals who assist with the implementation of structures and the ongoing tax compliance matters and regularly monitor and review structures to ensure that they continue to retain tax efficiencies in view of changes in tax law and practice.
Because we have the expertise in what is a very complex and niche area of tax law it’s an offering that we provide to other fiduciary businesses on the Island that perhaps don’t have the in-house resource.
Yachts and aircraft:
We also have a dedicated yachts and aircraft team who are able to provide ownership structures, registration and related administration services to both yachts and aircraft.
What makes the Isle of Man a good place for Abacus to conduct business?
The Isle of Man has firmly established itself as one of the world’s premier offshore financial centres. It is seen as a stable yet progressive jurisdiction which is reflected in the presence of many of the world’s major international financial institutions.
A credit rating of AAA has been awarded by agencies Standard and Poor’s and Moody’s which is the highest level of long-term credit risk rating. This is particularly important in the present volatile economic climate.
Potential for new markets is now more diverse than ever before. For example we have a flourishing space industry, ever-expanding yacht and aircraft registers and genuine consideration is being given to the idea that manufacturing businesses in China could set up operations in the Isle of Man as trade hubs for importation into Europe
One important advantage of the Isle of Man is the high level of co-operation between the finance sector and government.
The Department of Economic Development has recently announced the set up of a new hybrid body entitled The Isle of Man Finance Partnership to lead the development of the financial services sector on the Island. Working closely together the Chamber of Commerce and government will ensure the sector can more effectively use the combined talents and resources of both industry and the civil service.
Although English law does not extend to the Isle of Man we have a strong legal system which is based on the principles of English common law. Isle of Man law has been developed to meet the Island’s special circumstances with regards to taxation, company and trust law and financial supervision. A stable legal system is particularly important in light of recent upheavals in the Middle East and emerging markets.
What challenges has the fiduciary service come up against in the last three years?
Undoubtedly the biggest challenge is the continuing pressure from the EU on the Island’s zero-10 corporate tax system.
As government deficits in the developed world continue to increase the natural reaction is to look outward and offshore finance centres are an obvious target.
Positive steps were taken in this year’s Isle of Man Budget when the then Treasury Minister Anne Craine announced the repeal of Attribution Regime for Individuals (ARI) to take effect from April 2012.
This is designed to deter local shareholders from avoiding Manx personal tax by rolling up income in companies subject to the zero per cent tax rate. It is hoped the removal of ARI should end EU concerns over the Island’s zero-10 corporate tax system but let’s wait and see.
However we are not the only target and there is ongoing mention of Ireland increasing its corporate tax rate to bring them in line with the rest of Europe.
The Isle of Man is a highly regulated jurisdiction which I see as a positive but care needs to be taken to ensure we strike the right balance in relation to the cost of regulation. This is particularly so at present as we continue to face competition from new jurisdictions for example the Far East.
Zero-10: What are your thoughts?
I think we sit tight for the time being in the hope that Europe has bigger issues to resolve.
It is worth noting that the group set up by the European Union to monitor compliance with the Code of Conduct agreed in 2003 that zero-10 systems were not harmful.
With the removal of ARI as referred to above it is the view of Isle of Man Government that our business taxation system does not have features which can be considered to be harmful and this view has been communicated to the Code Group.
My own view is that across Europe tax should be down to choice of jurisdiction but with ongoing economic support from the bigger nations like Germany and France will the EU continue to apply pressure to bring corporate tax rates up?
It will be interesting to see if the UK applies pressure also. Going forward government will have an important role to play in this area.
Could you detail the achievements/business of note in this area for Abacus in the last three years?
Abacus continues to service a very strong core client base which is vital to the success of our business. We are also very excited about the current levels of new business opportunities presenting themselves across our funds and fiduciary businesses.
As part of our ongoing growth strategy we have recently announced two key tax appointments. Tax planning is a key driver in our industry and with continuous changes to legislation and compliance the requirement to develop and provide suitable tax planning structures is paramount.
Andrew Cardwell has been appointed director of tax and will lead Abacus in the development and promotion of Abacus’ existing tax services whilst exploring new opportunities. Andrew has a wealth of experience and expertise in the field of tax which we are confident will prove to be a valuable asset to Abacus in achieving its strategic objectives.
Alistair Stewart has been appointed director and will head a new UK operation, Abacus Fiduciary Services Limited, where it is intended he will maintain and build on Abacus’ existing relationships whilst developing new ones with a view to maximising business potential in the ever competitive industry.
To meet the needs of some of our existing client base and as part of our corporate growth strategy we have this year established a corporate arm in Malta. The new company, Abacus Corporate Services Limited, will offer a range of corporate services, including company formation and management and yacht/aircraft ownership structures.
The latest operation complements the fund administration services we currently offer in Malta through our sister company, Abacus Fund Administration Limited. We hope that business will also be gained by the Isle of Man from Malta as both locations complement each other with their abilities and service offerings.
What does the future for the fiduciary service look like in the Isle of Man?
We will continue to face challenges but overall we have a good story to tell and I am optimistic about the future for the Isle of Man.
Our proximity to London, still the economic hub for international business, is advantageous. The key for offshore jurisdictions is diversification and a desire to source new opportunities.
We have a strong professional base with a highly skilled young workforce, a progressive government and a well regulated jurisdiction which is important.
I feel more work could be done to raise the profile of the Isle of Man and hopefully this will be on the agenda for newly formed hybrid The Isle of Man Finance Partnership.
For more information on Abacus click here.
Abacus Trust Company Limited and Abacus Financial Services Limited are licensed by the Financial Supervision Commission of the Isle of Man. Abacus Fund Administration Limited is recognised by the MFSA to provide fund administration services.