Economy of the Isle of Man

The Isle of Man, one of the Crown dependencies, is a low-tax economy and offshore financial centre. Located in the Irish Sea, it is within the British Isles but does not form part of the United Kingdom or the European Communities.

Insurance, online gambling operators and developers, ICT, and Offshore banking form key sectors of the island's economy.

As of 2016, the World Bank assessed the island's Gross National Income (GNI) per capita at US$89,970.[1] The Isle of Man Government's own National Income Report shows the largest sectors of the economy are insurance and eGaming with 17% of GNI each, followed by ICT and banking with 9% each, with tourist accommodation in the lowest sector at 0.3%.[2]

BritishIslesMan
Location of the Isle of Man within the British Isles

Economic performance

After 32 years of continued Gross Domestic Product (GDP) growth, the financial year 2015/16 showed the first drop in GDP, of 0.9%, triggered by decline in eGaming revenues.[3]

The unemployment rate remains low at around 1%.[4]

Property prices are flat or declining, but recent figures also show an increase in resident income tax payers.[5]

The government's policy of offering incentives to high-technology companies and financial institutions to locate on the island has expanded employment opportunities in high-income industries. Agriculture, fishing, and the hospitality industry, once the mainstays of the economy, now make declining contributions to the island's GNP. The hospitality sector contributed just of 0.3% of GNP in 2015/16,[2] and 629 jobs in 2016.[4] eGaming and ICT contribute the great bulk of GNP.[2] The stability of the island's government and its openness for business make the Isle of Man an attractive alternative jurisdiction (DAW Index ranked 3).

Economic Strategy

In the Vision2020[6] the Isle of Man government lays out the national strategy of economic growth, seeking an increase of the economically active population an promoting the Island as an 'Enterprise Island, ''Tech Isle', 'Manufacturing centre of excellence', 'Offshore energy hub', 'Destination Island' and for 'Distinctive local food and drink'.

The government has published its national economic strategies for several emerging sectors: aerospace[7], biomed[8], digital media[9], ICT[10].

Taxation and trade

Tax rates

The Isle of Man is a low-tax economy with no capital gains tax, wealth tax, stamp duty, or inheritance tax; and a top rate of income tax of 20%.[11] A tax cap is in force: the maximum amount of tax payable by an individual is £125,000; or £250,000 for couples if they choose to have their incomes jointly assessed. Personal income is assessed and taxed on a total worldwide income basis rather than on a remittance basis. This means that all income earned throughout the world is assessable for Manx tax, rather than only income earned in or brought into the Island.

The standard rate of corporation tax for residents and non-residents is 0%; retail business profits above £500,000 and banking business income are taxed at 10%, and rental (or other) income from land and buildings situated on the Isle of Man is taxed at 20%.[12]

Trade

Trade is mostly with the United Kingdom. The Isle of Man has free access to European Union markets for goods, but only has restricted access for services, people, or financial products.

Tax transparency and the offshore banking debate

The Isle of Man as an offshore financial centre has been repeatedly featured in the press as a tax haven, most recently in the wake of the Paradise Papers.

The Organisation for Economic Co-operation and Development's (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes has rated the Isle of Man as 'top compliant' for a second time: a status which only three jurisdictions in the world have achieved so far.[13] The island has become the second nation after Austria to ratify a multilateral convention[14] with the OECD to implement measures to prevent Base Erosion and Profit Shifting (BEPS).

In a report[15] the European Council lists the Isle of Man together with the other two Crown Dependencies (Guernsey and Jersey) as well as Bermuda, the Cayman Islands and Vanuatu, as committed to addressing the Council's concerns of "Existence of tax regimes that facilitate offshore structures which attract profits without real economic activity" by 2018.

Sectors

The Isle of Man's Department for Enterprise manages the diversified economy in twelve key sectors.[16] The largest individual sectors by GNI are insurance and eGaming with 17% of GNI each, followed by ICT and banking with 9% each. The 2016 census lists 41,636 total employed.[17] The largest sectors by employment are "medical and health", "financial and business services", construction, retail and public administration. Manufacturing, focused on aerospace and the food and drink industry, employs almost 2000 workers and contributes about 5% of Gross Domestic Product(GDP).[18] The sector provides laser optics, industrial diamonds, electronics, plastics and aerospace precision engineering.

Finance Sector

Insurance, banking (includes retail banking, offshore banking and other banking services), other finance and business services, and corporate service providers together contribute the most to the GNI[2] and most of the jobs, with 10,057 people employed in 2016.[4]

eGaming & ICT

Among the largest employers of the Island's private sector are eGaming (online gambling) companies like The Stars Group, Microgaming, Newfield, and Playtech. The Manx eGaming Association MEGA is representing the sector. Licenses are issued by the Gambling Supervision Commission.

In 2005 PokerStars, one of the world's largest online poker sites, relocated its headquarters to the Isle of Man from Costa Rica. In 2006, RNG Gaming a large gaming software developer of P2P tournaments and Get21, a multiplayer online blackjack site, based their corporate offices on the island.

The Isle of Man Government Lottery operated from 1986 to 1997. Since 2 December 1999 the island has participated in the United Kingdom National Lottery.[19][20] The island is the only jurisdiction outside the United Kingdom where it is possible to play the UK National Lottery.[21] Since 2010 it has also been possible for projects in the Isle of Man to receive national lottery Good Causes Funding.[22][23] The good causes funding is distributed by the Manx Lottery Trust.[24] Tynwald receives the 12p lottery duty for tickets sold in the Island.

The shortage of workers with ICT skills is tackled by several initiatives, like an IT and education campus[25], a new cyber security degree at the University College of Man[26], a Code Club[27], and a work permit waiver for skilled immigrants.[28]

Filmmaking and Digital Media

Since 1995 Isle of Man Film has co-financed and co-produced over 100 feature film and television dramas which have all filmed on the Island.[29]

Among the most successful productions funded in part by Isle of Man Film agency were Waking Ned, where the Manx countryside stood in for rural Ireland, and films like Stormbreaker, Shergar, Tom Brown's Schooldays, I Capture the Castle, The Libertine, Island at War (TV series), Five Children and It, Colour Me Kubrick, Sparkle, and others. Other films that have been filmed on the Isle of Man include Thomas and the Magic Railroad, Harry Potter and the Chamber of Secrets, Keeping Mum and Mindhorn.[30]

2011 Isle of Man Film Oxford Economics was commissioned by Isle of Man Film Ltd to conduct a study into the economic impact of the film industry on the Isle of. Man.[31] The recommendation of this report for Isle of Man Film was to partner with a more established film institution in the UK to source more Isle of Man film production opportunities. This led to the investment of the Isle of Man Government to take shares in Pinewood Shepperton Plc[32] which were sold later with profit.[33]

Once one of the busiest areas of film production in the British Isles, the Isle of Man hopes to use its strong foundation in film to grow its television and new digital media industry.[29][34] In a recent Isle of Man Department of Economic Development strategic review[35], the Island's over 2,000 jobs counting digital sector features 'digital media' and the creative industries, and embraces partnerships with the industry and its individual sector bodies like the Isle of Media, a new media cluster.

Motorsports

Hosting of motorsports events, like the Isle of Man Car Rally and the more-prominent TT motorcycle races, contributes to the tourism economy.

Tourism

Tourism in the Isle of Man developed from advances in transport to the island. In 1819 the first steamship Robert Bruce came to the island, only seven years after the first steam vessel in the UK. In the 1820s, tourism was growing due to improved transport.[36] The island government's own report for the financial years 2014/15-2015/16 shows tourist accommodation to be in the lowest sector at 0.3%, ranking slightly above 'mining and quarrying' (0.1%).[2]

Infrastructure

Electricity

Since 1999, the Isle of Man has received electricity through the world's longest submarine AC cable, the 90 kV Isle of Man to England Interconnector, as well as from a natural gas power station in Douglas, an oil power station in Peel and a small hydro-electric power station in Sulby Glen.

Broadband

The Island is connected with five submarine cables to the UK and Ireland.

While the Isle of Man Communications Commission refers to Akamai’s recent State of the Internet Report for Q1 2017, with "the Island ranked 8th in the world for percentage of broadband connections with >4 Mb/s connectivity, with 96% of users connecting at speeds greater than 4Mb/s"[37], an "international league table of broadband speeds puts the Isle of Man at 50th in the world"[38]. Manx Telecom recently announced to roll out Fibre-to-the-Home (FTTH) superfast broadband with download speeds of up to 1Gigabit per second.[39]

Travel links

Ronaldsway Airport links the Isle of Man with six airlines to eleven UK and Irish scheduled flight destinations.[40]

The Steam Packet Company provides ferry services to Liverpool, Heysham, Belfast and Dublin.[41]

Statistics

Labour force—by occupation: agriculture, forestry and fishing 3%, manufacturing 11%, construction 10%, transport and communication 8%, wholesale and retail distribution 11%, professional and scientific services 18%, public administration 6%, banking and finance 18%, tourism 2%, entertainment and catering 3%, miscellaneous services 10%

Unemployment rate: nominally 2.0% (January 2016)[42]

Industries: financial services, light manufacturing, tourism

Agriculture—products: cereals, vegetables, cattle, sheep, pigs, poultry

Exports: $NA

Exports—commodities: tweeds, herring, processed shellfish, beef, lamb

Exports—partners: UK

Imports: $NA

Imports—commodities: timber, fertilizers, fish

Imports—partners: UK

Debt—external: $NA

Economic aid—recipient: $NA

Currency: 1 Isle of Man pound = 100 pence

Exchange rates: the Manx pound is at par with the British pound

Fiscal year: 1 April – 31 March

See also

Notes

  1. ^ "World Bank 2016: Gross national income by capita" (PDF). Retrieved 3 December 2017.
  2. ^ a b c d e "Isle of Man: National Income Report" (PDF). Retrieved 3 December 2017.
  3. ^ "BBC: Isle of Man GDP". Retrieved 5 December 2017.
  4. ^ a b c "Isle of Man in numbers 2017" (PDF).
  5. ^ "Three.fm: taxpayer numbers up".
  6. ^ "Isle of Man Government: Vision2020". Retrieved 3 December 2017.
  7. ^ "Isle of Man aerospace cluster: 3 year strategy" (PDF). Retrieved 3 December 2017.
  8. ^ "Manx biomed strategy" (PDF). Retrieved 3 December 2017.
  9. ^ "Isle of Man Digital Media Cluster: Strategic Directions" (PDF). Retrieved 3 December 2017.
  10. ^ "MICTA Positioning Paper Isle of Man Government Digital Strategy" (PDF). Retrieved 3 December 2017.
  11. ^ "Isle of Man government: Rates and allowances". Retrieved 3 December 2017.
  12. ^ "Isle of Man Government: Corporate Tax Rates". Retrieved 3 December 2017.
  13. ^ "Isle of Man Newspapers: OECD ranking". Retrieved 9 December 2017.
  14. ^ "Isle of Man ratifies multilateral treaty aimed at tax avoidance". Retrieved 9 December 2017.
  15. ^ "EU Council publishes list of non-cooperative jurisdictions". Retrieved 9 December 2017.
  16. ^ "Department for Enterprise: Key sectors". Retrieved 3 December 2017.
  17. ^ "Isle of Man Census 2016" (PDF). Retrieved 5 December 2017.
  18. ^ "Department for Enterprise: Manufacturing". Retrieved 3 December 2017.
  19. ^ Can I Play The National Lottery On The Isle of Man?
  20. ^ UK National Lottery Diary
  21. ^ National Lottery FAQ:Can I play while overseas?
  22. ^ Manx charities to benefit from lottery
  23. ^ APPENDIX 4: CORRESPONDENCE ON THE NATIONAL LOTTERY BILL Paliment.uk
  24. ^ Manx lottery Trust
  25. ^ "Isle of Man launches IT campus". Retrieved 6 December 2017.
  26. ^ "UCM: Launch of Cyber Security Degree". Retrieved 6 December 2017.
  27. ^ "Code Club Isle of Man". Retrieved 6 December 2017.
  28. ^ "Isle of Man government: Work permit waiver". Retrieved 6 December 2017.
  29. ^ a b "Isle of Man Film". Retrieved 3 December 2017.
  30. ^ "Isle of Man Film Productions". Retrieved 3 December 2017.
  31. ^ "Oxford Economics: The economic impact of the film industry on the Isle of Man" (PDF). Retrieved 3 December 2017.
  32. ^ "Isle of Man acquire Pinewood Studios". Retrieved 3 December 2017.
  33. ^ "Profit made on sale of Pinewood shares". Retrieved 3 December 2017.
  34. ^ "Isle of Media". Retrieved 3 December 2017.
  35. ^ "Department for Economic Development: Strategic Review" (PDF).
  36. ^ Birch 1964: 32
  37. ^ "Communications Commission: Telecoms". Retrieved 5 December 2017.
  38. ^ "Survey places the Isle of Man at 50th in the world in broadband speed". Retrieved 5 December 2017.
  39. ^ "Manx Telecom rolls out FTTH". Retrieved 18 December 2018.
  40. ^ "Isle of Man Government: Flight destinations and timetables". Retrieved 5 December 2017.
  41. ^ "Steam Packet: POrts". Retrieved 5 December 2017.
  42. ^ Isle of Man Labour Market, January 2016 Retrieved 3 March 2016

References

  • Birch, Jack William (1964). Isle of Man. Publications of the University of Bristol. Cambridge University Press.
CREST (securities depository)

CREST is a UK-based central securities depository that holds UK equities and UK gilts, as well as Irish equities and other international securities.

It was named after its securities settlement system, CREST, and has been owned and operated by Euroclear since 2002. The name CREST is an acronym. It stands for "Certificateless Registry for Electronic Share Transfer".

CREST allows shareholders and bondholders to hold assets in a dematerialised, i.e. electronic form, rather than holding physical share certificates. CREST also serves a number of other important functions, such as assisting in the payments of dividends to shareholders.

It is also an "electronic trade confirmation system" ("ETC") (using Trax). When parties to a transaction make a deal, they both electronically confirm their sides of the transaction via electronic transfer. Both parties are required to submit confirmation details to Crest. In the event that transaction details do not match, CREST will highlight the issues and ensure that the problems are resolved as soon as is practicable.

Stamp duty in the United Kingdom is only payable on physical share certificates therefore no stamp duty is payable on shares settled via CREST, however to compensate for this the UK government added a Stamp Duty Reserve Tax which is collected by CREST on behalf of Her Majesty's Revenue and Customs.

Coins of the Manx pound

The official coinage of the Isle of Man are denominated in Manx pounds. From 1971 to 2016, coins of the Isle of Man were minted by Pobjoy Mint Limited.Since 2017, coins of the Isle of Man are minted by the Tower Mint.

Due to matching appearance and value of pound sterling coins, these coins often appear in circulation within the United Kingdom. However, they are not legal tender there. Conversely, the Isle of Man does recognise pound sterling coins.

As well as producing non-circulating commemorative designs, the Isle of Man regularly changes the designs on the circulating coins. One reason for this is to increase sales to collectors, which can be an important source of income in small countries.

The Manx pound matches the pound sterling and went decimal in 1971, with the UK, however since this date the Isle of Man has been at the forefront of coin innovation: The £1 coin was introduced on the Isle of Man in 1978, 5 years before the United Kingdom's equivalent, and there is currently a circulating £5 coin.Below are descriptions of some of the different designs in circulation from the Isle of Man. This page does not cover non-circulating commemorative designs, such as the traditional Christmas 50 pence coins each year and the various crowns.

Common Purse Agreement

The Common Purse Agreement entitles the Isle of Man to a share in the United Kingdom's Customs and Excise revenues in return for being in customs union with the UK and not charging any import duties on goods from the UK, or that have been imported through the UK. As the UK is a member of the European Union, the Isle of Man is effectively in customs union with the entire EU.

The agreement is so called because it effectively sets up a 'common purse' for the receipt of excise duties and revenue, which is then split between both treasuries according to agreed formulas.

Department of Agriculture, Fisheries and Forestry (Isle of Man)

The Department of Agriculture, Fisheries and Forestry (Manx: Rheynn Eirinys, Eeastaght as Keylljyn) or DAFF is a former department of the Isle of Man Government.

In April 2010, the Department was broken up and most functions absorbed by Department of Environment, Food and Agriculture

Department of Trade and Industry (Isle of Man)

The Department of Trade and Industry (Manx: Rheynn Dellal as Jeadys) was a department of the Isle of Man Government from 1996 to 2010.

Fair Tax Town

The Fair Tax Town (FTT) movement (also called the Powys tax rebellion ) is a movement established by several shop owners in Crickhowell, Powys, Wales.

Financial Supervision Commission

The Financial Supervision Commission (FSC) (Manx: Barrantee Oaseirys Argidoil) was the financial regulator of the Isle of Man.

The commission was established in 1983. The Chairman was previously a Member of Tynwald until 2004 when legislation forbid this.

In 2015, the FSC merged with the Insurance and Pensions Authority (IPA) to form the Financial Services Authority (IOMFSA).

Isle of Man International Business School

The Isle of Man International Business School (Manx: Scoill Dellal Eddyrashoonagh Vannin) is an institution of higher education on the Isle of Man.

The Business School is located in the Nunnery mansion estate, close to the island's capital Douglas.

It provides various academic degrees and professional qualifications in many different areas of business and finance, to students from all around the world.

The building changed its use in 2012. From a standalone institution, it has become a campus of the Isle of Man College dedicated to higher education. In 2016, the college changed its name to University College Isle of Man (UCM).

Isle of Man Office of Fair Trading

The Isle of Man Office of Fair Trading (Manx: Oik Dellal Cair Ellan Vannin) is an independent Statutory Board of the Isle of Man Government. The purpose of the office is to enforce criminal consumer protection legislation and advice on civil consumer legislation however the office cannot enforce civil legislation. Such legislation provides consumers with certain rights when purchasing goods and services and these rights can ultimately only be enforced by the consumer through the Courts. Unsatisfactory goods and services, breaches of contracts for goods and services are examples of matters covered by civil legislation.

Isle of Man Treasury

The Treasury (Manx: Yn Tashtey) of the Isle of Man is the finance department of the Isle of Man Government. It prepares the annual budget for the Government, and also handles taxation, customs and excise, economic affairs, information systems, internal audit, currency and the census in the Isle of Man.

The Minister for the Treasury is Alfred Cannan MHK.

List of banks in the Isle of Man

List of banks registered on the Isle of Man, based on list of licensed banking institutions from the Isle of Man Financial Services Authority:

Abbey National Treasury Services PLC (trading as Santander International)

Barclays Bank PLC

Cayman National Bank (Isle of Man) Limited (trading as Cayman National Bank; Cayman National Wealth; Cayman National; CN Aviation; CN Sea)

Conister Bank Limited (trading as Conister Bank Agri-Finance; Conister Bank Isle of Man)

HSBC Bank Plc

Investec Bank (Channel Islands) Limited

Lloyds Bank International Limited (trading as Bank of Scotland International; Lloyds Bank Commercial; Lloyds Bank Islands Commercial; Lloyds Bank Premier Banking; Lloyds Bank Private Banking)

Nedbank Private Wealth Limited

Standard Bank Isle of Man Limited (trading as Standard Bank; Standard Bank Offshore)

The Royal Bank of Scotland International Limited (trading as Isle of Man Bank; Coutts Crown Dependencies; NatWest International; NatWest; RBS International)

The Standard Bank of South Africa Limited

Manx pound

The Manx pound (Manx: Punt Manninagh) is the currency of the Isle of Man, in parity with the pound sterling. The Manx pound is divided into 100 pence. Notes and coins, denominated in pounds and pence, are issued by the Isle of Man Government.

Outline of the Isle of Man

The following outline is provided as an overview of and topical guide to the Isle of Man:

The Isle of Man is a self-governing British Crown dependency located in the Irish Sea near the geographic centre of the British Isles. The head of state is Queen Elizabeth II, who holds the title of Lord of Mann. The Crown is represented by a lieutenant governor. The island is not part of the United Kingdom, but external relations, defence, and ultimate good governance of the Isle of Man are the responsibility of the government of the United Kingdom.

Revenue stamps of the Isle of Man

Revenue stamps of the Isle of Man refer to the adhesive revenue or fiscal stamps which were issued by the British Crown dependency of the Isle of Man between 1889 and 1976. British key type revenue stamps with an appropriate inscription were issued on the island until 1966, when revenue stamps showing various scenes and symbols of the island began to be issued. The last set of stamps was issued in 1976. From around 1920 to the 1970s, hundreds of contribution stamps were issued for National Insurance and related schemes.

The International Stock Exchange

The International Stock Exchange (TISE) is a stock exchange headquartered in St. Peter Port, Guernsey.

The TISE provides a responsive and innovative listing facility for international companies to raise capital from investors based around the globe. It offers a regulated marketplace, with globally recognisable clients and a growing product range, from a location within the European time zone but outside the EU.

Traders' currency tokens of the Isle of Man

The traders' currency tokens of the Isle of Man were issued in 1668 and between 1811 and 1831 by various issuers.

Languages

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