Start-up Hubs and Substance

There has been a global move towards companies needing to demonstrate ‘economic substance’ and this has led to the growth of ‘Start-up hubs’ to provide companies with a soft landing when they establish themselves overseas.  

Economic substance requirements are being applied in an increasingly number of jurisdictions, around the world, and are particularly relevant in low tax jurisdictions.

The definition of "economic substance" is relatively straightforward: 'companies tax resident in a particular jurisdiction need to demonstrate genuine local substance in that jurisdiction'.

Companies undertaking the following relevant activities are subject to economic substance requirements:

  • Banking
  • Distribution and service centres
  • Finance and leasing
  • Fund management
  • Headquarters
  • Holding Companies
  • Insurance
  • Intellectual property holding
  • Shipping

Each of the Dixcart offices are familiar with the economic substance requirements in their particular jurisdiction and often act as a Start-up hub for companies wishing to establish a real presence in that location. Dixcart Business Centres offer high quality serviced offices and a range of professional services to assist clients to establish a business as speedily and  efficiently as possible:

2018 guidelines extended the scope of the EU’s ‘Code of Conduct Group (Business Taxation)’, with respect to companies located in low tax jurisdictions within the EU. Guernsey, Jersey and the Isle of Man are three such jurisdictions and voluntarily agreed to comply with the code.

Our Guernsey and Isle of Man offices are fully conversant with the legislation and the implications within the respective jurisdiction.

Further information can be found in the following Articles:

IN561 Key Aspects - Economic Substance Requirements For Guernsey

Full Fiduciary Licence granted by the Guernsey Financial Services Commission

Guernsey Registered Company: 6512


IN562 New Substance Requirements For Isle Of Man Companies - Effective 1 January 2019 

Dixcart Management (IOM) Limited is licensed by the Isle of Man Financial Services Authority