At a certain stage in a company’s development, listing on a stock exchange can become an attractive strategic option. Across the world, stock exchanges facilitate the trading of a wide range of financial instruments including equities, commodities, and bonds. For growing businesses, a public listing can open the door to improved access to capital, increased visibility, and enhanced liquidity.
However, listing a business is not a decision to be taken lightly. It represents a significant milestone and the beginning of a new chapter for any company.
Why Consider a Listing?
One of the key motivations for listing is access to investors’ capital. A public listing allows businesses to raise funds to support growth, expansion, or innovation. It can also provide founders and early investors with an opportunity to realise value by selling part of their shareholding to new investors.
Many companies choose to remain private until they reach a certain level of maturity, either to strengthen their operations or to prepare for an eventual exit strategy. While the benefits can be substantial, listing also comes with increased responsibilities, regulatory obligations, and costs. Understanding your objectives and planning early is essential. Any issuer considering a listing should undertake extensive research before embarking on this journey.
Choosing the Right Stock Exchange
Selecting the appropriate stock exchange is a critical decision. The choice will depend on a company’s size, growth plans, and long-term objectives. Other important considerations include the type of exchange, listing and compliance costs, accounting standards, and shareholder requirements.
Some commonly used exchanges include:
The International Stock Exchange (TISE)
TISE is a diverse and responsive exchange offering competitive pricing. It is often used as a stepping stone for businesses that may wish to list on other markets in the future. Headquartered in Guernsey, with operations across the Isle of Man, Jersey, Dublin, and London, TISE is uniquely positioned within the European time zone but outside the UK and EU. It is particularly popular for Qualified Investor Bonds and UK REITs.
AIM – The Alternative Investment Market
AIM is a sub-market of the London Stock Exchange and was launched in 1995. It is designed for small to medium-sized growth companies and offers a more flexible regulatory environment than many main markets, making it an attractive option for earlier-stage businesses.
The London Stock Exchange
As a global platform for growth, the London Stock Exchange enables companies to raise capital and attract investors from around the world across a wide range of sectors.
There are, of course, many other exchanges that may be suitable depending on the nature of your business.
The Importance of Preparation
Successful listings are built on careful planning. Before proceeding, businesses should assess whether a listing is the right step, clearly define their objectives, and appoint the right advisers. Each exchange has specific entry requirements and ongoing obligations, and certain advisers must always be in place.
Beyond advisers, the company’s board must be capable of meeting the standards expected of a public company. Stock exchange rules are designed to protect investors and ensure timely, transparent disclosure of information. Many private company boards may not initially meet these expectations, so advance preparation is vital to avoid delays or complications during the listing process.
Corporate Governance: A Cornerstone of Success
Corporate governance lies at the heart of any successful listed business. It encompasses the processes, practices, and policies that guide decision-making and management. Strong governance promotes accountability, transparency, fairness, and responsibility.
Implementing robust corporate governance helps protect shareholders, directors, management, suppliers, and customers alike. It also enhances investor confidence and supports long-term sustainability in the public markets.
Why Use the Isle of Man?
The Isle of Man is a highly regarded jurisdiction for forming companies and conducting international business. With a strong and vibrant economy, a stable legal infrastructure, and the world’s longest-serving continuous parliament, the Island offers a robust foundation for listed entities.
Key benefits of using the Isle of Man include:
- A well-regulated environment with company law that is long established and broadly aligned with English company law
- OECD-compliant jurisdiction
- A stable and attractive tax regime, including no capital gains tax, no inheritance tax, no stamp duty on share transfers, and a zero-rate of corporation tax where applicable
- Ability to settle shares through CREST
- Protection of pre-emption rights
- A strong corporate governance framework
- Inclusion within the UK VAT and customs territory
- A large and experienced network of professional advisers
- High service levels and responsive support
These factors make the Isle of Man a popular choice for businesses seeking an efficient and credible structure from which to list.
How can we help?
Listing your business can be a powerful catalyst for growth, providing access to capital, increased profile, and enhanced credibility. With the right planning, advisers, and governance framework, and by choosing the right jurisdiction and exchange, a listing can position your business for long-term success in the public markets.
Boston offers a variety of services to international and Isle of Man companies considering a listing. We can form Isle of Man Companies (as well as those in other jurisdictions) and provide management, administration, accounting and statutory services to those companies. A range of services can be provided to support the corporate secretariat and can be tailored to suit client’s needs.
We have significant corporate experience having worked on a number of AIM Admissions and a Main Market admission and ongoing services. Boston Sponsor Services Limited was the first Isle of Man TISE Listing Member and can act as Listing Agent for Qualified Investor Bonds and as Sponsor for Equities. Please contact us for more information enquiries@bostonmfo.com