FAQs - TCSPs
A TCSP is a business that forms and manages companies and trusts for its clients.
For companies it depends on the type of company, and where it will be incorporated.
Some local companies trading on the Isle of Man do not need to be set up by TCSP, but others are obliged to have a TCSP as a ‘registered agent’ Often clients from outside the Island use the services of a TCSP to set up a company.
There is no absolute legal requirement to use a TCSP in respect of the creation of a trust.
The Financial Services Authority's ("the Authority") website lists all Trust and Corporate Service Providers and other entities which it regulates. On the home page in the top right hand corner you will find a search facility or click here to go direct to the relevant page. This will include details of the licenceholder’s licence and also any conditions which we have imposed on the licenceholder.
Some provide Corporate Services only (Class 4) and some Trustee Services only (Class 5). The majority provide both.
The Authority does not regulate the amount of charges. However, we require the licenceholder to provide terms of business or a client agreement with a detailed fee schedule. It is advisable to check if an annual fee is fixed or if there are extra time charges for additional work.
We recommended that you take independent legal advice and tax advice relevant to your own circumstances.
It is common for potential customers of TCSPs to approach the TCSP because they have received advice that a company or trust would be suitable for their circumstances.
A potential client should explain what they are trying to achieve and why.
The TCSP should provide full details of the services offered and on what terms.
Partly due to requirements placed upon TCSPs to know their client to prevent money laundering, but also so that the TCSP fully understands your needs and requirements including those of the other parties to the arrangement and is then in a position to offer you the most appropriate service.
It is important that you fully understand any proposed structure. For example the transfer of trust property to the trustees has the nature of a gift, and the property moves out of the control of the person who provides it. The trust cannot come into existence until the trust property has been passed on and control given up. The property transferred to a company becomes the assets of the company and is managed and controlled by the directors.
If in any doubt independent tax/legal advice should be sought.
If you proceed with the arrangement, agreement should be reached with the TCSP on what information you will receive and when.
There are a number of licensed TCSP’s on the Island, consideration should be given to meeting more than one.
In the case of trusts, consideration could be given to the appointment of a “protector” who could have powers to supervise and guide trustees and sometimes to appoint and remove trustees.
All licenceholders are required to have a complaints process.
The Authority has issued a guidance note on this subject which can be found in the ‘Consumers’ part of this website. The Authority does not, however, have any arbitration powers in relation to customer complaints against licenceholders.
The Authority licenses CSPs to provide corporate services and, as part of its consideration of the CSP, it considers whether its key staff are “fit and proper”. However, the CSP providing client director services is ultimately responsible for ensuring that the staff fulfilling director roles are fit and proper for those roles.
Companies are run by their directors who are required to act in the best interests of the company. To assist those fulfilling this role, the Authority has issued a guidance note on directors’ duties under Isle of Man law which can be found on this website.
The Authority does not have powers to instruct directors supplied by a CSP, or to intervene in the affairs of a client company – only the courts can arbitrate on directors’ decisions. If you are dissatisfied with a decision made by a director of a client company you should, in the first instance, write to the CSP providing the services, expressing your dissatisfaction. However, if the matter is not resolved to your satisfaction, you should seek your own legal advice and be prepared to take the matter to the Isle of Man Courts for judgement.
The Authority licenses TSPs to provide trust services and, as part of its consideration of the TSP, it considers whether its key staff are “fit and proper”. However, the TSP providing trust services is ultimately responsible for ensuring that the staff fulfilling trustee roles are fit and proper for those roles.
Under trust law, trustees are responsible for making decisions related to the assets of trusts and who benefits from trusts, in accordance with the instrument which governs the trust.
The Authority does not have powers to instruct trustees supplied by a TSP, or to intervene in the affairs of a client trust – only the courts can arbitrate on trustees’ decisions. If you are dissatisfied with a decision made by a trustee you should, in the first instance, write to the TSP providing the services, expressing your dissatisfaction. However, if the matter is not resolved to your satisfaction, you should seek your own legal advice and be prepared to take the matter to the Isle of Man Courts for judgement.