The Isle of Man, a self-governing jurisdiction in the middle of the Irish Sea, is on a mission to be crowned one of the world’s leading tech hubs.
The island - measuring 30 miles long by 15 miles wide and home to a population of 85,000 people - is a crown dependency that is not part of the UK but owes allegiance to the British Crown. As a result, it is able to set its own laws and taxes through its democratically-elected government, known as Tynwald.
Much of the legislation that has passed through Tynwald in recent years has focused on attracting and supporting technology companies, particularly those operating in the eGaming sector.
"In 2001, the Isle of Man Government was one of the first jurisdictions in the world to introduce legislation specifically designed to benefit gambling and eGaming firms and fully protect customers," the government writes on its website.
"Following further recent changes, the licensing and regulatory controls are now more responsive to the needs of the gambling and eGaming industries."
Today there are over 150 ICT/e-business companies established on the island, including big name online gambling firms, such as PokerStars (acquired by Canada’s Amaya Gaming Group for $4.9 billion in June) and Microgaming, which provides software to leading online gambling companies such as 32Red and Carmen Media Group.
Peter Greenhill, CEO of eGaming Development at the Isle of Man Government’s Department of Economic Development, said eGaming currently accounts for over 10 percent of the Manx economy, adding that it’s the fastest growing sector and set to overtake finance as the island’s leading economy by 2020.
“There’s a low tax environment and that’s massive for people,” he told Techworld at his Douglas office, pointing to the zero corporation tax, zero inheritance tax, zero stamp duty and zero corporate gains tax.
“Tech entrepreneurs, millionaires and billionaires come to an agreement with the government that allows them to pay a maximum of £125,000 [in annual tax],” he said proudly.
But not everyone is happy with this arrangement. Former British chancellor Alastair Darling described the Isle of Man as a “tax haven sitting in the Irish Sea” and several other MPs have also criticised the island’s tax regime, which has attracted a number of super-rich individuals as well as large corporates. Fortunately for the Isle of Man, David Cameron's Conservative majority government is more accepting of offshore holdings than the previous Labour government.
Defending the island’s tax regime, Greenhill said: “That’s the way this small rock works. We get people to spend their money here. That’s the way we do it.
“You can’t hide your money on the Isle of Man,” he added. “We were the first overseas entity to sign up to UK FACTA (Foreign Account Tax Compliance Act). We will make information available.”
In addition to a lucrative tax system, the island offers a start-up support scheme that is designed to help companies “get off the ground”, and a start-up grant, which allows businesses to claim back up to 40 percent of their first year expenditures, providing they create a certain number of new jobs.
Microgaming marketing director Janine Woodford told Techworld that access to the Manx government is one of the key reasons that firms like Microgaming and PokerStars are located on the Isle of Man.
She added that infrastructure and "livability" also make it a good place to be headquartered. Tax is an added benefit but not the sole reason why Micrograming is on the island, she said.
Government support and low taxes are all well and good but their comes a time in many companies' lifecycles when they need to raise funding. Sadly, the big venture capital firms like of Index Ventures and Sequoia Capital haven't yet penetrated the shores of the Isle of Man.
As a result, Manx tech companies often turn to one of the many high net worth (HNW) individuals that are located on the Isle of Man, including Canonical founder, Mark Shuttleworth, who has a home on the island.
Greenhill, who is tasked with introducing Manx tech start-ups to HNWs and vice-versa, said the government breaks down the island’s investors into three groups: £50,000 - £250,000 investors; £250,000 - £2 million investors; and £2 million+ investors. He added that some individuals back companies with well beyond £2 million.
One of the main issues facing Manx tech companies is a shills shortage, which forces many of them to import talent from overseas or outsource large chunks of work to other companies.
Kurt Roosen, CEO of the Manx ICT Association, is aiming to change this through the introduction of a new ICT-focused university, which could open as early as 2016 if it is given the approval of the Manx government.
“The university’s aim is to put people into work or to encourage them to be entrepreneurs,” Roosen told Techworld while giving a tour of the estate that the campus would be built on.
“It will be very niche and be focused on usable skills, offering real technical certifications in Cisco, Microsoft, HP,” he added.
The university, which could eventually accommodate 650 students, is understood to have received backing from technology giants HP and Huawei, who are looking to create the types of students that could enter their workforce when they graduate, according to Roosen.
Former Isle of Man Minister for Economic Development John Shimmin said the university could bring significant economic benefits to the island.
"This has the potential to be a very exciting and important development for the Isle of Man,” he said. "[The] Government’s Vision 2020 initiative, which is the most significant project for many years to look at the future of the Island’s economy, has identified huge growth potential in the e-Business sector and ICT more widely.”
But is this small island punching above its weight? Tynwald, the oldest parliament in the world, is optimistic that its digital push will lead to the Isle of Man being dubbed "Tech Isle" or "Silicon Rock". Some would argue the odds aren't stacked that heavily against them.