The Isle of Man is a British Crown Dependency – it operates as its own country, makes its own laws and did not get a vote in the EU referendum. The island boasts a population of about 83,737 people. To put that in perspective, the population of London alone is in excess of 8 million.
It is a beautiful place, as I was able to see for myself at the recent IslExpo, held at Villa Marina in the island’s capital, Douglas.
The expo is held every year, and 2018’s theme was “locate” – a bid to encourage people to move to the island. The unemployment rate is around 1%. While it looks great as a statistic on paper, it offers up challenges for those looking to recruit.
To get a feel for what it would be like to launch a business on the island, we caught up with Adrian Moore, head of business at the Isle of Man government, and Brian Donegan, head of e-business operations for the Isle of Man government.
The business landscape
The biggest industries by national income are insurance (17%), banking (9%), ICT (9%) and egaming (17%), according to the Isle of Man National Income 2015/16 report.
“Gaming is now 20% of our economy,” explained Donegan. “From the early 2000s, the Isle of Man got involved. I don’t know if you gamble online or not, but back then it was very much the wild west in terms of regulation. The Isle of Man saw an opportunity to put in place the best of breed regulatory infrastructure it could.”
Being early adopters in this space, the island attracted the likes of Poker Stars, Microgaming and Playtech. Crytocurrencies are also seeing a boom on the island. According to Donegan, the island became involved because digital currency exchanges couldn’t find anywhere that welcomed them.
“They were considered a pariah. We didn’t invite them, they showed up, simply because the Isle of Man was a jurisdiction that welcomed egaming 10 or 15 years before” – Brian Donegan
However, don’t be mistaken in thinking the Isle of Man is a cryptocurrency free-for-all. Due to concerns over scamming in the Initial Coin Offering (ICO) space, Donegan estimates the island authorises one or two of every ten applications.
“We focus on the quality of the white paper and the tech, and if it doesn’t really hit all of the values then we don’t proceed with it,” he said.
It’s not all digital-based on the Isle of Man. Moore explained: “Our construction industry is huge in terms of employment. The engineering, manufacturing and retail sectors are big here as well. On the whole, over 40% of all private sector jobs fall under the business agency.”
The vast majority of businesses on the island are SMEs. In fact, some of the largest have only around 250-300 employees.
Advantages for Manx businesses
Doing business on the island would certainly be a far cry from launching a new company in London – or anywhere in the UK for that matter. One thing that is strikingly different is the level of access to government.
“There is less bureaucracy,” explained Moore. “We are our own country, we have our own parliament, we set our own laws, we have all the departments you would find in the UK – just probably smaller.”
“I think there’s a culture here which is quite down to earth. This is a place where your dreams can come true. If you’ve got good ideas there’s always somebody in the government who’s interested in listening and talking to you about it.”
The Isle of Man also has a reputation for being a low tax jurisdiction and entrepreneurs with far-reaching enough goals can play this to their advantage.
“We have what’s called a neutral tax regime, so that’s in the public domain I think everybody’s familiar with that. That’s attractive for anybody that’s far-seeing enough even if they’re in the startup phase,” explained Donegan.
The island has no capital gains tax, so in the event of an entrepreneur selling their business after a few years, they could stand to get a big pay day.
The island skills gap
Alongside the more obvious disadvantages to operating from an island such as logistics issues, recruitment can be a bugbear. The skills gap is especially prevalent in the Isle of Man. With a staggeringly low unemployment rate, it can be difficult to find the right talent.
“It’s a nice problem to have. Right now, we need more people with the right skills, so that’s going to be a big focus going forwards. We’re trying to make it easy for people to come here” – Adrian Moore
The Isle of Man government engages with job fairs to recruit from the UK and Ireland, and is exploring initiatives to recruit from some European countries.
Going it alone – Brexit and beyond
The Isle of Man is a bigger player in the global arena than you might think. It’s aerospace business cluster is a great example of that. As Moore said: “We’re on every major civil and military aerospace programme in the world. That is the nature of the island, we’re far more diverse and far more important to the UK supply chain than people imagine.”
Moore explained that the UK is probably the island’s biggest export partner, followed by Europe, the US and China. However, as a crown dependency, citizens of the Isle of Man did not get a vote in the EU referendum. Currently, the island is in the customs union and pays VAT. It is intrinsically linked to the UK, so to a certain extent it is in the same boat as the UK after Brexit.
“We have access to the EU for financial goods and agricultural goods, but that’s on the back of the UK’s accession to the EU, that’s all going to change post Brexit,” explained Donegan.
Where do I sign up?
Moore and Donegan offered up some top tips for those thinking of making the move to the island.
While Donegan believes the island stacks up well against competitor jurisdictions, it doesn’t hurt to do your homework. For Moore, it’s all about making the most of the island’s hands-on government: “Come and talk to me or one of my colleagues in the agency. We’ll work on your business idea to find a way, find a model that works on the Isle of Man.”
It’s certainly a different pace of life, but the island would suit some entrepreneurs down to the ground. If you are interested in starting a business on the Isle of Man, you can find out more here.
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