Lyle Wraxall, CEO of Digital Isle of Man, explains what the Isle of Man has done to support its tech startups and ensure they go on to succeed
What has the Isle of Man been doing to bolster its tech startup ecosystem?
Do you associate the Isle of Man with tech? You should.
When looking to set up a small business, knowing that you’re getting as much support as possible is vital; after all, you’re investing your time, effort and money. As a result, where you set-up your business can be just as important as the business idea itself, and the Isle of Man provides the perfect platform financially, logistically and in terms of regulation. Through a mixture of government funding and support schemes and access to a secure infrastructure sufficient to house international companies and a government that is keen to cause as few barriers and blockers as possible, the island has been — and will continue to be — a digital hub.
As the sector has grown worldwide, tech-based companies on the Isle of Man have followed suit with the sector now accounting for 30% of the island’s economy. It’s a particularly diverse area, spanning e-gaming, eSports, Fintech, blockchain, technology, payments, media and film. Tech Startups have consistently been able to navigate ‘teething problems’ and continue to scale-up, grow and thrive, largely thanks to Government support. We have recently launched a brand new Blockchain Office and Sandbox, established to guide blockchain businesses through current (and future) regulatory landscapes, with expert-led assistance and support. We want to help ease regulatory ‘red-tape’, allowing for dialogue between regulators and businesses to ensure start-ups are ‘future-proofed’ and can flourish. We’ve already accepted 20+ business through the office across a variety of sectors, all with the purpose of enriching our technology ecosystem. We are regularly travelling and learning from global jurisdictions, understanding what works well and what doesn’t, all to reduce business ricks. Thanks to our agile government, we can ‘cherry-pick’ the best in class operations.
How does the government fund and support UK tech startups?
In addition, the Isle of Man has a favourable tax regime, including no corporation tax, no capital gains tax, and an upper personal tax rate of just 20%, (regardless of earnings) which helps make money go further — particularly poignant as owners tend to give their small business every chance of succeeding, (often through their own income).
Like all start-ups, tech companies often struggle with cash inflow. However, the Isle of Man has a selection of grants that are easily accessible to a variety of business needs and the owners are free to apply for the most appropriate. Examples include;
• Enterprise Development Scheme: Suitable for a range of organisations including new start-up businesses, businesses locating to the Isle of Man and Isle of Man businesses looking to expand. A range of investment options including loans, equity or a mixture including convertible instruments are available and investment ranges from £100,000 up to £1 million.
• Financial Assistance Scheme: Suitable for a range of organisations including new start-up businesses, businesses locating to the Isle of Man and Isle of Man businesses looking to expand. This discretionary scheme offers a generous package of support and offers up to 40% funding towards capital and operating items.
• Employee Relocation Incentive: The Employee Relocation Incentive (ERI) provides a 20% grant of up to £10,000 towards the cost (to a business) of relocating an employee to the Isle of Man.
• National Insurance Holiday: The scheme will be open to anyone who has not been a tax resident here for the immediate last five tax years, and who takes up both residence and full time, permanent employment with a gross salary of £21,000 or more, on or after 6th April 2019. Eligible residents will apply for a refund on the National Insurance contributions for their first year of living or returning to the Isle of Man, with refunds capped at £4,000.
Fostering tech startups: a must for forward-looking governments
The Isle of Man is making concerted efforts to support the development of skills and knowledge of emerging technologies within the community. We recently co-hosted a “Be the Blockchain” training experience with PwC and the Isle of Man Chamber of Commerce. The event was one of the largest gatherings of this blockchain experience to date across Europe, and was aimed at providing senior leaders from the Isle of Man business community with a better understanding of blockchain technology and how it can change business.
Finally, young people are also well versed in technology with the on-island university specialising in tech, they even have a course on cyber security. We further supplement this with the Isle of Man Code Club, which targets young people (5-16) teaching them how to code and working on 3D printing too. For tech start-ups specifically, the International Centre of Technology is a hub that works alongside UCM (University College Isle of Man) providing training courses in IT.