The Isle of Man has launched a new private equity proposition for fund formations, which allows private equity funds to be set up as "specialist" funds and offers zero corporate tax for the fund and for Isle of Man-domiciled managers and administrators.

Furthermore, services to a specialist fund provided by Isle of Man-domiciled managers and administrators will be exempt from VAT and there are no regulatory pre-approval requirements or restrictions on asset class or trading.

“The past few years have seen many changes to the financial services sector. Now, these upheavals are proving the catalyst in creating opportunities for those innovative enough to reconsider their business models and think ‘out of the box’. The Isle of Man offers an excellent environment for new fund formations and for niche investment managers through using the ‘specialist fund’ - this proposition allows asset managers to take advantage of a lower cost base in a tax-friendly environment,” said Allan Bell, the island’s minister for economic development.