ISLE

Ship Registry Information Technology Financial Services OF MAN Rapid service Secure growth World class

ISLE OF MAN Sunday, 25thSeptember 2011 Strength Through Diversity

ocated in the middle of the Irish Sea and with Celtic, Norse and erating greater national income than a decade ago, despite losing ground E-Gaming and all other ICT activities have big opportunities and Anglo-Saxon cultural influences, the Isle of Man is 32.5 miles as contributions to national GDP. The tourism industry that once had its special conditions in which to operate. A unique aspect of Island regu- long and 13.5 miles wide. As a British Crown Dependency, it is glory days now has a challenge on its hands in a sector full of competi- lations is that players’ funds are held in trust for them to ensure that in not part of the UK (nor the EU), but it is located in the British Isles tion, and to renovate ideas and infrastructure. Agriculture, on the other the event of an operator’s insolvency, those funds are ring-fenced from Land, has Queen Elizabeth II as its head of state and its own par- hand, seems to have found a way forward by using ‘Isle of Man’ to brand other debts and liabilities. “We have a very advanced infrastructure. liament called Tynwald, implementing its own legislation. Sterling is its products, adding value to the production. Our hosting and network technology is strong,” says Steve Burrows, the national currency and the Island produces its own bank notes. The Island sustains an expanding manufacturing sector producing secretary of the Manx ICT Association. “As a jurisdiction for holding The global financial crisis has served to constrain growth opportuni- goods ranging from aerospace components to foodstuffs, and includes information we are in a very unique position, not being part of the EU ties. Nevertheless, the Isle of Man is in its 27th consecutive year of such hi-tech activities as laser optics. The Isle of Man-based Bladon Jets, and nor the United States, sitting outside the two largely regulatory growth. A number that tells a lot about the capacity of its people (local a company that manufactures revolutionary micro gas turbines has regimes for data control that are very strict about the way data circulates and foreign) to create solutions and work hard. worked closely with Jaguar to develop the C-X75 concept car. and we are a regime that has no particular interest in that data.” The expansion was sustained by the government’s successful strategy The discovery of niche activities – including film production, ship- All sectors have experimented with an unusual public-private part- of diversifying the economy, investing on one side in the financial sec- ping and aircraft registration, and space and satellite licensing – has also nership that is appreciated by every single business person we spoke to tors and also supporting new initiatives in aircraft and shipping registers, increased the economy. The Isle of Man Ship Registry remains one of on the Island. Of course, an accessible government is easier to be create clean tech, e-Business, e-Gaming, high tech engineering and manufac- the most highly regarded in the world, being a Category One British Reg- for a small Island than a big country, but this rare framework cannot be turing, film, financial services, Isle of Man food products, ship manage- istry with international safety convention status for vessels of all sizes a product of size alone. There is also political will. “It´s a very stable ment and space. and classes. Meanwhile the Aircraft Register, launched in 2007, has sur- platform to work from,” explains Mike Hennessy, CEO of the Isle of The main areas to generate the Island’s future growth are expected to passed all expectations with more than 402 aircraft registered, making it Man Chamber of Commerce. “The government works very closely with be those that have done so in recent decades, namely financial and re- the eighth-busiest jet registry in the world. “The UK has got nine aircraft the private sector and with new business which want to come to the Is- lated professional services, which together generate about half the na- registries in the world,” says Brian Johnson, director of Civil Aviation. land. To make it fair it´s a well regulated arena and that provides a good tional income. For many people the success of a sector has a combination “The only difference between us and everybody else is that we provide platform for businesses that want to come to the Island”. of advantages. “We have proportional legislation which is tailored to a really good customer service. We would meet the clients’ expectations Away from the office, the Island offers a high quality of life and we captives,” explains Gaynor Brough, chair of the IOM Captive Associa- rather than being a bureaucratic government department. The quickest hear from the relocated population how happy they were to raise their tion. “We have the respectability in terms of the OECD ‘white list’ and we ever registered was six days and some of our ‘competitors’ websites families in the Island, but the challenge is to keep hold of single people! the IMF report, the infrastructure, the banks, the law firms, the biggest say the expectation is for six to eight weeks”. The ability to bring in labour from outside is a key factor. On the other four accountancy firms, strong and a highly skilled workforce, plus the The IOM has even been considered the fifth most likely country to hand, the Island’s economic moment is being reflected in the labour work permit is easy to navigate. Logistically it is very close to London go back to the moon. “We've about 14 companies here in the Isle of Man market, where unemployment at below two per cent has been the norm and the regulator here is very approachable”. Moreover, regulation is registered as space companies and doing a number of things. Satellite now for over a decade. “People tend to be very positive in their feedback key. “One of the benefits of the Isle of Man is been able to find the ap- filings, orbital filings, most of the largest satellite companies in the world and the fact that they want a work-life balance,” says Debbie Harris, Di- propriate degree of regulation for the sort of businesses we have on the have got offices here in the Isle of Man”, explains Adrian Moore, De- rector of Paragon recruitment consultants. “They can have a serious ca- island.”, assures David Vick, from the Insurance and Pensions Authority. velopment Manager, Industry and Space for the Department of Eco- reer and can still move that career forward but also enjoy what they like The Island’s traditional sectors of tourism and farming are still gen- nomic Development. to do outside of work as well.”

Chief Minister Tony Brown

Chief minister Tony Brown is the very embodiment of the Isle of Man government’s approachable, small-scale and business- friendly philosophy. As he faces retirement after 35 years in public service, he speaks to us about his hopes for the future

nswering the door in casual clothes and with A key aspect of that difference is the ‘Freedom to an affable smile to match, chief minister Flourish’ ethos which runs through all aspects of Island Tony Brown could not be further away from life. “We try to be as free as we can to encourage people the distant, formal worlds of Westminster or to be successful,” explains Brown. “We say, ‘If busi- ABrussels. He receives us in his simple and ness is successful, then the Isle of Man is successful.’ cosy house in Castletown, that was the Island’s ancient It focuses people’s minds on trying to develop the Is- capital, where he has lived all his life. land in a way that will help it achieve continued And if nothing else, any man who has risen to the growth.” very top while sporting a resplendent handlebar mous- Indeed, while much of the world is still languishing tache has to be admired. Fittingly, for a man who began in recession, the Isle of Man’s economy is currently en- as an electrician, Brown has a disarmingly ‘we can fix joying its 27th consecutive year of growth. However, it’ approach to politics. Looking back after 35 years in Brown points out that this is not something to be taken public service, he says that “most of what we’ve set out for granted. “In the 1980s we were struggling,” he re- to do in the last five years, we’ve achieved.” He goes calls. “Our GDP per person was about 50 per cent of the on, “We’ve sustained a good economy to help support UK’s and we couldn’t even fund the services that we had then, which were limited compared to today.” Get- ting out of this rut motivated the Manx Government at the time, argues Brown. “It was that kind of ambition to be successful that drove us along. There was no com- If business is placency there. It was having that kind of focus – as well as world events, of course – that helped us develop the successful, then the economy. As the world grew, we grew with it.” That hunger to succeed still clearly motivates Isle of Man is a Brown’s government. “At the moment we’re still suc- cessful and still have growth, because the Island’s econ- “ success” omy is small and nimble and the areas we’re involved with have continued to grow” he says. “E-gaming, air- craft industries and manufacturing are doing very well.” So what does Brown plan to do in his retirement? “I’m just going to sit here and watch telly,” he laughs, per- the Island, we’ve continued to help those most in need, haps only half-joking as he talks about pursuing his and we’ve invested in the Island’s infrastructure to at- hobbies and organising community events. And he is tract new business, to sustain jobs and quality of life.” similarly low key when asked how he would like to be So what are the factors that have helped maintain this remembered. “Just for being me, I think,” he shrugs. economic growth? “The Island succeeds because it goes “I’m very proud of how Castletown has changed in my for niche markets,” says Brown. “So we have a very di- time, which is something I’ve been involved in influ- verse economy, not just concentrating in one area. And encing.”, he says. we use our separate systems of government and legis- Whatever retirement holds, a move to the Algarve lation to help make it attractive.” He continues, “Impor- doesn’t seem to be on the cards – he clearly thinks he’s tantly, people who come here are drawn by the Island already found his place in the sun. “The Isle of Man is itself and also because they find working with govern- a great place to live, especially for families,” he says. ment very easy. We can make things happen reasonably “You work hard, but you can relax outside work. We’re Tony Brown Isle of Man Chief Minister quickly – I think it’s that smallness and closeness that very fortunate to live in such a beautiful place.” makes the Isle of Man different.”

Distributed with The Sunday Telegraph. Produced by Global Review who take full responsibility for and are solely liable for the content. 25th, September 2011 isle of man 2

Minister for Economic Development Allan Bell Treasury Minister Anne Craine

As head of a new super-ministry for economic development, Anne Craine speaks of changes underway in the Island’s Allan Bell is ideally placed to assess the Isle of Man’s future growth self-governance, economic promotion, and its ties to the UK

n 2010 the Manx government economic expansion, we’ve been nne Craine, Treasury revenue will mean the Island’s exit created a new super-ministry, able to maintain steady growth,” Minister for the Isle of from the Customs and Excise the Department of Eco no mic Bell argues. “Some of that growth Man, says that changes Agreement, which would create Development, bringing all of has been quite spectacular – it’s are afoot in the British barriers to EU markets for Manx Iits business-facing and re - been 14 or 15 per cent net some ACrown Dependency – companies, nor a charge to the Is- venue-earning arms under one years. Over the last 12 years, we’ve changes brought on by changing land’s Zero-Ten corporate tax roof. As the man appointed to lead averaged over seven per cent net times. The international financial structure. It does, however, reflect the new department, former treas- growth year on year.” This has had crisis and its impact on the UK’s a change in the relationship be- ury minister Allan Bell is respon- a positive effect on the Island as a coffers, which have had an influ- tween the Isle of Man and the UK. sible for the promotion of the whole. “It has generated jobs, our ence in reducing the shared VAT “We have a good working rela- Island. It’s a task that is central to population has grown and it’s cre- revenues for the Island, as well as tionship with the UK government. the government’s economic strat- ated government revenues.” its growing ability to stand on its They represent us on different lev- egy, so it comes as no surprise to Financial services has been at own two feet, are changing the re- els, but as we are becoming more learn that Bell is now one of the the heart of this expansion, ex- lationship between the two coun- accomplished and able to represent front runners in the race to succeed plains Bell. “The sector started tries. This, along with increasing ourselves, they are quite happy to chief minister Tony Brown. growing towards the end of the calls for a more transparent global allow us to do that,” she says. With “Clearly, life in the next few 80s,” he says. “The industry is still financial regime, heralds interest- regards to the current customs years is going to be a lot more chal- growing and we’re identifying new ing times for the Island. agreement, “We are at a position lenging for small jurisdictions such areas of activity even within finan- Minister Allan Bell In the short term, however, the now where we both feel that we Minister Anne Craine as the Isle of Man,” he says. “Pre- cial services; pension provision, Island´s population is gearing up have a solid base to work from, and viously we had all our drivers for for example.” for belt tightening. Island residents though it may have reduced our in- economic growth spread across Bell identifies two other key have enjoyed strong public serv- come by a considerable amount, three departments, so the intention sectors within the Manx economy. ices until now, and while Mrs it’s still worth us being in there.” was to bring them all under one “E-gaming is a very big part of the Craine hopes that frontline services The bottom line, she says, is the roof and focus the activities of the Island’s economy now,” he says. such as the Island’s excellent edu- need to create further economic new department and then develop “It has grown very fast and it’s still cational system will not be af- growth, an area in which the Isle of existing business further and diver- growing. That helps e-business to The Island’s fected, she says that Islanders must Man has excelled over the past We have a sify the economy.” develop because it brings down the economy is be prepared to think along new decade. Though financial services good working This is all a far cry from the cost of doing business on the Is- “ lines in terms of how services are continues to represent the bulk of “ early 1980s, when the Island suf- land.” Bell also singles out the paid for. GDP, its contribution has shrunk fered very high unemployment, net space industry, which “has also still growing “We have already set in motion from 45 per cent to 38 per cent over relationship emigration and crumbling infra- been growing surprisingly well. a five-year programme to be able to the last few years as diversification structure and public services. “In We now have four of the world’s strongly” cope with the £100 million that was policies bore fruit in new industries with the UK” the mid-80s we pulled together a largest satellite companies, so this the first reduction in VAT revenue, such as aerospace. long-term strategy designed specif- sector is very much part of our and now we have got a further £75 In the financial sector, changes ically to stimulate and diversify business”. Indeed, as Bell very million over a three-year period. I are also afoot. The Island is target- economic development,” Bell ex- proudly points out, the Island is still think there is a lot of govern- ing new markets in Asia, while plains. “We have moved forward, currently the fifth most likely nomic crisis, Bell admits that “the ment expenditure we can reduce,” strengthening its transparency reg- but that’s down to us to do a better identified new areas of activity and country to make the next trip to the next few years will be challenging she says. ulations. “People have to accept job in terms of promotion” focused a lot of resources on re- moon. It would certainly be a tan- for the Island”. He adds the UK “We do a lot of things on a small that these are changing times and “We are not insular, we believe building infrastructure, which has talising moment in the history of government’s changing of the island that you wouldn’t necessarily we have to abide by more stringent we have to go out and look for helped the economy itself to space travel as the watching world sharing agreement on the Island’s get elsewhere. We run buses, we regulations if we are going to be in- business.”, she explains. “But we grow.” holds its breath, an astronaut sets VAT structures as being a prob- run leisure centres and so on. We ternational players,” says Mrs need to be quite focused about the Today, the Isle of Man is expe- foot on the moon and utters the lem. “Nevertheless, the economy is need to look at those things, make Craine. “We are not a haven in any markets we are going to go after, riencing its 27th consecutive year line, “That’s one small step for the still growing strongly, we have them more commercial and take a sort of shady sense; we are a well- and those are things that the De- of growth. “Because we’ve started Isle of Man…” nearly £1.5 billion in reserves, no more business-like appro a ch.” regulated low-tax area. Maybe partment of Economic Develop- from such a low point, and grown With the prospect of elections external debt and a triple-A credit Still, Mrs Craine does not be- people are not as aware of the Is- ment are coming through with at mostly through a period of global on the horizon and the world eco- rating, unlike the US.” lieve that the reduction in VAT land as we would like them to be the moment.”

Callin & Wild Jeremy Callin and Lesley Webb

This Manx firm deals with both international legal issues and local concerns in the Island’s highly-regulated jurisdiction

ong-established Manx le gal when it comes to attracting interna- firm Callin Wild may be tional business, explaining that it is small but it punches well a “well-developed jurisdiction, above its weight, dealing as with a stable political and eco- Lit does with all aspects of nomic base and a good legal sys- legal work for an impressive range tem based on common law.” He of local and international clients. also argues that its location works As advocate Jeremy Callin ex- in its favour, as it´s well connected plains, it has been a legal practice to the UK and Europe. on the Island for 120 years and its Callin goes on to explain that work ranges from the daily con- the Island’s status outside of the cerns of local residents to the bigger UK is another key part of its ap- imperatives of its international cor- peal. “People see it as a separate ju- porate clients, mainly based in the risdiction – we’re not part of the UK and Ireland. UK’s tax, national insurance or Callin Wild is firmly rooted legal system. If you’ve got a high- here, and both Jeremy Callin and net-worth individual in Europe fellow advocate Lesley Webb bang who wants to set up a trust or a cor- the drum for the Manx economy porate structure, he wants to come with infectious enthusiasm. Callin somewhere that has a close con- argues that the Island has distinct Lesley Webb and Jeremy Callin nection with the UK but that isn’t advantages over its competitors actually part of the UK politically or legally.” Talking of sales pitches, what are the growing sectors in the Manx economy that investors should be looking at? Lesley Webb has no doubt that e-gaming is the current hot favourite. “There has been an explosion in the gaming industry on the Island over the last few years,” she says. “And although their business isn’t necessarily conducted on the Island, these firms have brought growth and jobs.” The e-gaming boom has also impacted on how Callin Wild operates, explains Webb: “The practice has had to ex- pand its knowledge base in order to help these firms set up.” “I think the image of a well- regulated jurisdiction is very im- portant,” Callin argues. “Unfortunately, people still view the Island as being, in that nasty phrase from the 1970s, a tax haven. Certainly the Island is a low-tax jurisdiction, and a large proportion of what we do is finan- cial business based on that fact. That’s the message that it would be nice to get out to the world – that we’re a well-regulated, low- tax jurisdiction, but we have tried very successfully to clean up the type of business that comes into the Isle of Man.” the advocate concludes. 25th, September 2011 isle of man 3 Conister Bank Douglas Grant

Douglas Grant believes local banks should be seen as part of the solution, not the problem, in today’s global economic turmoil

shareholders, depositors and ister has an important role to play ormed 76 years ago, Manx everyone else. Your social re- throughout these difficult times Financial Group PLC (for- When you’re sponsibility and your corporate and is well positioned to continue merly Conister Financial responsibility are not mutually to provide asset-backed lending to Group PLC) was one of the ingrained in the exclusive, the two can live to- individuals and companies and of- Ffirst companies listed on gether quite happily.” fering fixed-rate deposit rates over AIM and is best known locally as Island, you’ve got Last year Manx Financial Group terms that suit the client’s needs. the parent company of Conister acquired ECF Asset Finance “Conister Bank Limited has a Bank Limited. Firmly entrenched in to treat that with PLC which gave them greater ac- solid base with plenty of liquidity the Island’s community, its reputa- “ cess to the UK SME market, a and access to a ready source of tion and local trust became two of respect” market starved of credit by larger funding,” says Grant. its key assets during the current eco- banks that have retrenched dur- Based on Manx Financial nomic woes. Douglas Grant, Group ing the global crisis. Group’s recently released interim Finance Director of Manx Financial But the core business for statements, net loans and advances Group and an Executive Director of ping companies busy and generates Manx Financial Group is still taking to customers increased 53 per cent; Conister Bank, believes that despite indirect taxation. We have to make deposits on the Isle of Man and their deposit base grew from £45 the sector being tainted by recent sure we keep unemployment levels lending money to Manx residents million to £57 million compared economic events, his bank has a low and indeed foster and stimulate and companies, which Grant sees as with the first half of 2010. Another positive role to play in helping the controlled population growth, and I an opportunity to work with the gov- division, Conister Card Services local economy. think a taxation imbalance with the ernment in overcoming the current Li mited, which offers prepaid card “The government does not have Douglas Grant Group Finance Director UK may actually be one of our hurdles. ser vices for the Group, has also a monopoly on creating the solu- biggest assets.” “We’ve not stopped lending on seen impressive growth in prof- tions to this economic environment Another key asset in today’s eco- the Island, indeed we’ve got an ap- itability over the past year, improv- and as an established company ing, all keeping employment levels nomic world is trust and reputation. petite to lend more. By lending to in- ing by 54 per cent over the first half within the Island’s business commu- high. Banks with a strong corporate so- dividuals and small businesses we of 2010 figures. nity we can contribute positively to “Taking the gaming industry as cial responsibility, who are seen as can help them through these difficult “This is a testing economic envi- both the debate and the implementa- an example, it’s a worldwide, tran- part of the local community, are periods, especially if they can invest ronment but it brings opportunities tion of the solution,” says Grant. sient industry that could be based finding they have a distinct advan- in core assets that develop their busi- to us as we seek to find sustainable “The Isle of Man has a strong anywhere, but it’s based here for tage over more global institutions. nesses, create employment and ben- solutions to our customers prob- regulatory culture which has fos- sound reasons. The Isle of Man has “You can’t compromise on your efit the economy. At the same time, lems,” continues Grant. “Last year tered growth whether it’s through no unique natural resource so we reputation,” says Grant, “We know we see ourselves as part of the solu- we entered the block discounting the Financial Supervision Commis- need to create an environment everybody on the Isle of Man. tion to the problem.” market and to date we have grown sion, the Insurance and Pensions which fosters small growing indus- When you’re that ingrained in the And Grant is optimistic about the a robust book with little to no ar- Authority for pensions or the Gam- tries, and in doing that we create a 2010 Island Excellence Awards Manx population, you’ve got to Island´s economy as it registers on- rears. Presently we are considering bling Supervision Commission for clustering effect. All the service in- treat that with a lot of respect. going growth. other new products which will com- the gaming companies. I think dustries that spin off those primary “I can walk my dogs down on While it’s true the recent down- plement our existing portfolio of there’s enough evidence in the past industries – banking, building, hos- the beach and someone will say, grade of the US’s long-term sover- lending.” to show that the regulators and re- pitality, shipping, airlines – feed off ‘what deposit rate have you got for eign debt to AA+ has exacerbated As for the future, Grant clearly sponsible companies can generate small clusters. So while you might one-year money’. The normal con- the gloomy economic outlook in the sees good things based on the mu- markets.” think one or two companies in a versation is about the weather, but UK, the Isle of Man economy has tually beneficial policies and prac- Grant also believes that the low new industry doesn’t have that not if you work for Conister,” he continued to grow. A recent budget tises of the Isle of Man government level of corporation tax also pro- much impact, you get this huge rip- laughs. report highlighted a better than ex- and private enterprise. vides part of the solution in the Isle ple effect and it doesn’t take many “We are in the psyche of the Isle pected financial position with infla- “I’m an optimist by nature,” says of Man, stimulating activity and di- small companies to come in before of Man culture so we’ve got to play tion remaining stable, and a level of Grant. “If we continue to be ahead versifying the economy. This is vis- we all benefit.” a part in that. If we get any requests unemployment well below that of of the game, we’ll end up with a ible on the Isle of Man through “An increase in population is for sponsorship we’ll always look the UK. solid, balanced, diversified econ- growth sectors such as shipping, great for the Isle of Man. It makes Conister backs local iniciatives favourably on them. But at the same As the Isle of Man’s only inde- omy in five years time.” aviation, gaming and manufactur- the restaurants, airlines and ship- time we have a responsibility to our pendent bank, Grant believes Con-

Fairbairn Private Bank Greg Horton

The Island remains robust in the wake of the credit crisis but adapting to constantly changing market conditions is still essential

he United States is crack- hence the Isle of Man achieved its ling with distaste at find- current AAA status. An award-winning approach to wealth management ing the Isle of Man has a “One of the benefits of the Isle of stronger credit rating than Man is that it has avoided the greed string of industry accolades charts the route Fairbairn Private Bank has taken in its progress to itself. Since the credit cri- culture permeating some of the becoming a fully-fledged international wealth manager. The most recent title of Best International T Wealth Provider in the Professional Adviser International Fund and Product Awards 2011 sis of 2008, the world has changed, global banking sector. These opera- A of that there’s no doubt. Govern- tions are very much more customer- acknowledges the bank’s comprehensive range of wealth management services. ments, banks and financial institu- focused and remain unscathed by Fairbairn Private Bank’s discretionary investment management service is designed as a solution for tions that weathered the initial any of the sub-prime events. This is clients who wish to delegate the day-to-day management of their financial assets to an experienced storm are now being battered in a why, as a leading International Fi- investment team. With an established track record of managing investments, much of the bank’s new hail of blame. nance Centre, the Isle of Man is in a business comes through existing client referrals - a strong endorsement of its investment expertise and However, the Isle of Man stands much better position than many of personal service. out as an example of what good its fellow competitors.” The bank’s relationship managers develop a role of trusted adviser to their clients making them ideally government can be all about ac- “I think that’s a very strong placed to understand and respond to their changing needs. The application of the bank’s established cording to Greg Horton, Executive message which has gone out to the investment philosophy allows the construction of wealth management services which are flexible and Head of Nedbank Wealth Interna- rest of the world,” he says. “The competitively positioned. tional and Managing Director of absence of toxic debt here on the The global, multi-asset class investment service is built around a number of fundamental investment Fairbairn Private Bank. Island is one of its strengths. It´s a principles: “The Manx Government has a very robust and solid jurisdiction.” policy that they cannot budget for a But despite the Island being a •Asset allocation is an important driver of returns •Investment is for the long term deficit, which has proven to be a leading International Finance Cen- •Diversification can reduce risk •Value investing and minimising cost very wise strategy in the light of Greg Horton tre, the global crisis isn’t resolved •Risks need to be properly understood global events,” says Horton. They’re Managing Director yet. Resting on your laurels is a constantly looking to at least break dangerous stance, even for such a By minimising fees and closely controlling a portfolio’s volatility, the aim is to optimise the performance even but strive to maintain a surplus. solid, safe and secure environment of the discretionary investment management service and add real value when measured against each It’s a very solid and secure, safe vised them to issue debt and bor- as the Isle of Man. client’s specific risk tolerance. This has culminated in the bank’s discretionary investment management place and that statement is loudly row the money through the mar- “If you look at Darwin’s theory service being shortlisted for the 2011 Private Asset Managers ‘PAM’ Awards. endorsed by the AAA rating. I think kets by raising a bond issue. The of evolution, you’ll see that it’s The table below helps to demonstrate the successful performance of the discretionary investment it’s a statement that a number of £75m bond needed to be rated via not necessarily the strongest or management services from inception up to the end of August 2011: other countries would be only too the credit rating agencies, and most intelligent that survive, but happy to make and I think it shows those that can adapt to Portfolio Return since inception* (annualised) Inception date great foresight by the government change,” warns Horton. Low-medium risk 3.8% 30/09/2005 here.” “The three key words that Medium-high risk 5.3% 30/09/2005 Horton was instrumental in businesses or govern - High risk 7.2% 31/07/2006 structuring the first euro-sterling The Manx ments need to look at are Global bond strateg 10.0% 30/11/2008 bond issue back in 2000 which ul- diversification, innova- timately led to the Island obtaining Government tion and efficiency. Tho - * All returns quoted are net of fees its AAA credit rating. se three areas are going to Following the global equity sell off this summer, market volatility has persisted with increasing fears of a The Island wanted to invest cannot budget be increasingly important slow down in the rate of global economic growth. Navigating these uncertain times will necessitate significant amounts of money to “ for those that survive and ongoing economic analysis, careful investment selection, active asset allocation and professional risk improve their water system in- for a deficit” prosper in this changing management. Fairbairn Private Bank is well equipped to take on the current investment landscape. frastructure. Horton’s firm ad- world”.

Well-regulated financial sector provides a secure environment for banks and depositors alike As crisis shakes the world economy, the Isle of Man’s banks address new challenges

ith the world economic Association (IOMBA). “It’s a secure, “The IOMBA are fully supportive of ensure that if there are changes to be belts are tightened and there is more system in crisis, the Island’s well-regulated environment and is a low- the Zero-Ten tax regime and have no made, they will not be detrimental to the competition. Waterhouse says the key Wstatus as a highly-regarded tax jurisdiction. But I think what’s best real issues with the 10 per cent competiveness of the sector.” to meeting these challenges is being International Financial Centre about the island is the cooperation one burden falling on the banks,” Water - The IOMBA’s main goals are to boost able to show more initiative in the ensures that banks operating here gets from the government and also from house explains. the number of banking licenses on the products Isle of Man banks can offer. and their depositors are guaranteed the tax department.” “We are aware there is some Island, increase staffing numbers and “We also have the expertise here, a safe environment with state-of- In fact, one of the key attractions external pressure for change and we carefully guide the development of the our Island economy is widely diversified the art financial services on offer. here for businesses is the so-called are equally aware that some in the industry, which Waterhouse argues is and all these things set us apart from “The Isle of Man is definitely a “Zero-Ten” tax arrangement under Island’s financial sector are very keen vital in the current economic situation. other International Financial Centres good place to do business,” says which there are two corporate tax rates to maintain the zero tax rate as it There are always challenges in the making us unique among our Mark Waterhouse Mark Waterhouse, president of the with businesses paying no tax, while applies to them,” he adds. offshore market, he says, but they competitors,” Mark says. President IOMBA 32-member Isle of Man Bankers banks pay a rate of 10 per cent. “We will work with the government to become tougher with a recession as 25th, September 2011 isle of man 4 Fedelta Michael Shimmin

he financial sector has about that any more. If there is been at the heart of the tax-saving then that’s a bonus, Isle of Man’s steady but nowadays it is about wealth expansion over the last protection, about making sure T40 years, accounting that the money you’ve earned for almost half of the Island’s over your lifetime is passed on gross domestic product. And to your children and grandchil- for much of that time, wealth dren in the best way that it can management company Fedelta be.” Rags to riches has been building an impres- However, the crisis has af- sive record with its long-estab- fected the nature of Fedelta’s In Yorkshire they have a saying, “from clogs to clogs in three generations”. That is, if the first generation makes lished roster of clients. work in some important ways. money, their children are taught to be financially astute, but the third generation will often lose it. Responsibility with Fedelta was launched in Clients’ appetite for risk has money sadly tends not to be an hereditary skill. Thankfully there are a number of trust and company-based solutions 1992, although, as group chair- certainly been affected by the designed to help avoid this unfortunate circumstance. While these have traditionally been popular for their tax man Michael Shimmin points fragile economic situation. “A efficiencies, there are a number of other reasons to use them. out, all of the directors and lot of people have been dramat- After all, it isn’t just about the money. Anyone who is looking at protecting wealth over generations is doing it with managers of the company have ically shaken,” admits Shim- the welfare of their descendants in mind, and unrestrained wealth can cause significant distress. An heir who worked together for between 25 min. “I don’t think anyone experiences a gold-digging marriage, unscrupulous investment manager or sly business partner suffers more than just and 30 years. “That’s part of foresaw the situation where financially. Young people with large cash sums can easily get drawn into destructive behaviours that hurt more than what our ethos is about,” Shim- Michael Shimmin Group Chairman people would be saying, ‘I just bank balances. min explains. “We enter into don’t know which bank to put So using a trust company, foundation or family office with professional oversight can avoid these potentially very long-term relationships with my money in because I’m fright- unpleasant outcomes, by managing wealth succession. Many families are becoming familiar with the concept of having clients.” A focus on quality of serv- the Island’s economy that make it ened of the major banks going a private trust corporation or family office arrangement whereby a company like Fedelta provides all of the necessary ice is fundamental to these relation- an attractive location for interna- broke.”’ He goes on, “We ended up skills and structures to fulfil all of their requirements. This may include yacht registration and management, aircraft ships, he argues. “And since the tional investors. “We have a very having to start spreading the risk by registration and management, investment holding companies, property holding companies, bespoke pension schemes company is owned by the people diverse economy now, in terms of structures having several accounts (QROPS), and companies to hold the family trading businesses. The introduction of the Isle for Man foundation provides that work in it, we’re very moti- placing your shipping or aircraft with different banks. We never had an alternative to the trust for those who are not familiar with, or comfortable with, the concept of a trust. These families vated to ensure that our standards of through here, manufacturing and the need to do that before.” are often from civil law jurisdictions and the Foundation allows the family to retain a higher degree of involvement and service are as high as possible.” property investment,” he argues. When it comes to the Island’s control than is possible with a trust. Since a foundation is a separate legal entity like a company, whereas a trust is Shimmin’s emphasis on quality “And it’s also a good place from image, Shimmin is cautiously opti- merely a private arrangement, they are more suitable for dealing with investments that are higher risk by nature and of service also extends to the Manx which to run international business mistic. In the past, he admits, people may prove unacceptable to trustees of a traditional trust. Foundations may have beneficiaries in the same way as a economy as a whole. He argues that into Europe because here you can didn’t even know where the Island trust does but they can also be set up for charitable purposes and I forecast that we will see these increasingly being the Island has established itself in have a VAT-registered company was – but now the profile of the Is- used for philanthropic purposes. Persons wanting a charitable foundation will be well advised to look at creating this in the forefront of well-regulated juris- that actually pays corporate tax at land has unquestionably been a jurisdiction that is in the top tier of International Financial Centres and the Isle of Man is therefore particularly suitable dictions. “We have very high stan- the rate of zero per cent – this is the raised. Nevertheless, in the after- for this reason. Trusts and foundations can even be used to provide incentives for heirs by placing conditions upon dards of regulation and probity, we only place where you can do that.” math of the financial crisis, Shim- distributions, for example by matching payments to what they earn for themselves. A professional trustee or director offer a very diverse range of serv- Moreover, the Island’s ability to min says, many economies found will oversee these structures to ensure they remain in the best interests of the family. The key element to this is ices compared with our interna- attract international business is in- the International Finance Centres an expertise; a good fiduciary services provider can bring expert knowledge to the family’s assets in a wide range of areas. tional competitors.” extricably linked to its reputation easy target. If you are in the market for such professional trustees or foundation council members, Comparing the Island to its near- for financial probity. “Our regula- “When you have statements there are a number of things to look out for. Try to bear in mind that this will probably est rivals, The Channel Islands, tion is certainly better than that in from the previous UK Chancellor be the longest relationship your family ever enters into - we are now in the third Shimmin argues that the Isle of Man the UK at the moment, and it has to like, ‘The Island is a tax haven sit- generation of many of our family clients. Remember that both individuals and offers a number of key advantages. stay that way,” he says. “We could ting in the Irish Sea,’ it shows that companies can move, change or disappear, so look for signs of longevity. “The Channel Islands’ legal system not afford the reputational risk of he really doesn’t understand what I would also suggest finding a company that is locally owned and of a is based on statute law rather than high-quality jurisdictions saying the Island is doing at all,” Shimmin size where you will get to know the directors. Such a company won’t common law,” he explains. “And that we were not up to the highest says. “But there is no doubt that the simply close or sell their local branch on the demand of a corporate common law is something that is standards.” Island is a major boost to the City of headquarters, and the decision makers you rely on will change far understood by solicitors throughout While other economies continue London. It is much better that all less often. When talking to prospective companies to manage your the English-influenced world.” And to suffer as a result of the recession, that business is passed through a family assets, I would also be wary of anyone that doesn’t offer you he identifies another benefit the Is- the Island has actually benefited well-regulated jurisdiction. A legit- a ‘removal mechanism’ up front. Ask about what recourse the land has over its competitor juris- from the crisis in many ways, ac- imate business will be attracted by family will have in the event that they want to end the fiduciary dictions. “Because we have few cording to Shimmin. “People are the quality of our image – that’s relationship. constraints on recruitment, we’re saving more and they’re more con- why it is important to retain it.” So in summary, remember that preserving wealth is about able to bring in the expertise that we cerned about protecting their assets wellbeing, not just the money; find a company that appreciates that need,” he says. “We can therefore – and a lot of what we do is about too and that shows signs of real longevity; be sure to know the senior compete very successfully on wealth protection. People think that management; and never trust a would-be trustee who doesn’t give you price.” offshore centres are all about tax- a clear exit strategy. That should keep the folks out of clogs! He defines other key aspects of saving – but they’re actually not www.fedelta.com

Royal London 360º David Kneeshaw

When it comes to a safe place for your money, Royal London 360º brings a robust institution and a robust environment together

n these turbulent and uncertain RL360º staff are financial times, finding a safe “dedicated team and responsible place for your We work in a way that members who eat, money is imperative. Locating drink and sleep Ithat secure jurisdiction may lead allows our clients to our business”. you to an offshore International Fi- As a location, nancial Centre where your hard- sleep easy at night, the Isle of Man earned wealth deserves more than forms part and just a brass plate on a door and because in today’s parcel of the lower tax rates. “ RL360º philoso- As Chief Executive of Royal environment, you need phy. Kneeshaw London 360º, David Kneeshaw is explains that there acutely aware of the desire among to know your money’s are plenty of other investors to safeguard their money. offshore jurisdic- Whether it’s a nest-egg for the fu- in a safe place” tions where a ture or a grandchild’s inheritance, company can Kneeshaw believes the utmost pri- “create a brass- ority for all his clients is security. plate enterprise”, “We work in a way that allows our but he firmly be- clients to sleep easy at night,” he Royal London 360º products lieves this is certainly not enough says when outlining the company’s come with a difference and stand for discerning clients who are look- ethos, “because in today’s environ- apart from their competitors for sev- ing for a safe and secure, long-term ment, you need to know your eral reasons. First and foremost, haven for their money. “Clients money’s in a safe place”. Kneeshaw says that the company’s want a robust institution in a robust Royal London 360º has a short RL360º vision gives it an all-round environment, not just an Island with but intense history. Formed in Jan- view, posing the fundamental ques- tax advantages and a beach,” he uary 2009 from the merger of Scot- tion of “Are we making money for says. tish Life International and Scottish David Kneeshaw Chief Executive our clients?”. By extension, RL360º The Isle of Man is certainly ro- Provident International, RL360º is rejects selling volume. “Everything bust – triple A ratings from Stan- the international division of the we do has to make money in its own dard & Poor’s and Moody’s, Royal London Group, the UK’s right,” he says. inclusion on the OECD’s ‘white largest life mutual. Drawing on RL 360º is also different in its list’ and stringent rules make it “a more than 30 years experience in the high-profile parentage. For Knee- real Island with real regulations,” in financial service industry, RL360º shaw, belonging to the UK’s largest Kneeshaw’s words. He stresses that currently manages £2 billion in life mutual adds “credibility, hon- “these things really, really matter” funds and has seen 40 per cent our and morality”. As a mutual, and believes that few rival offshore growth in the first six month of 2011 London Group’s policy holders are jurisdictions have this set of quali- compared to the same period 2010. also its owners and Kneeshaw be- ties. Moving elsewhere offshore is “The merger allowed us to ac- lieves this leads to more cautious not an option for RL360º because, cess broader distribution and in- and longer-term strategies. “All ac- the chief executive says, “we have crease our economy of scale,” tions are about customer experience to deliver more than a brass plate explains the chief executive. The and customer ownership,” he says, and lower tax”. client base is international with the emphasising the fact that ownership While maximising the Island’s core in the Far East and Middle East by Royal London Group means 360º reputation as a centre for financial plus around 25 per cent from the behaves in the same way. “We tend excellence, RL360º puts back into UK. Products encompass offshore to take our time and go step by the Manx community. A big local savings and investment options, step,” the Chief Executive adds. charity supporter, the company covering a range of sectors and lo- A further differential comes in backs several causes such as cations but sharing the common de- the company’s location, the Isle of Alzheimers Research Trust and nominator of “generating value”. Man. RL360º’s head office is on the takes part in community action to The company provides a wide Island with all 200 employees under improve the Island´s quality of life. range of options for its clients in- the same roof, a holistic approach to RL360º is also an official partner of cluding investment opportunities, business which Kneeshaw firmly the Isle of Man TT races, one of the retirement plans, savings plans and Keith Amor, Merita Taylor, Ian Hutchinson and Cameron Donald launching the Superstock TT race believes is part of its success. He world’s most spectacular motorbike investment management. also underlines the fact that all racing events. 25th, September 2011 isle of man 5

Cains Advocates Andrew Corlett The Private Jet Company Tony Corlett

“We are not a tax haven, we never have been,” says the Island’s premier corporate law firm, pointing to the diversified economy The Island’s Private Jet Company helps buyers choose the right aircraft for them, while offering Island’s some benefits s the Isle of Man’s pre- eminent provider of corporate legal serv- n August of this year, the Isle ices, Cains Advocates of Man registered its 400th air- Ahas been instrumental craft since its Registry was es- in the Island’s transformation into tablished in May 2007. The an International Financial Centre Ionly dedicated corporate air- by attracting business from craft register in Europe, the Isle of emerging economies. Man offers many benefits, includ- Indeed, two years ago Cains ing zero taxes for aviation transac- was awarded the Queen’s Award tions, a prompt VAT and for Enterprise in International im portation process and a highly Trade, the only offshore firm ever credible registration, which have to win the honour. Its strategy is attracted growing business from to advise companies and invest- around the globe. ment funds from BRIC economies With in-depth knowledge of in- and other emerging markets seek- ternational registering and de-reg- ing capital and listings in the istering, The Private Jet Company, world’s major financial markets, the only company on the Island to plus associated merger and acqui- Richard Vanderplank Director and Andrew Corlett Managing Director operate corporate and private jets, Tony Corlett Managing Director sition and corporate related work. was heavily involved in the cre- Cains’ expertise covers trans- ation of the Registry. The first two port, listings, e-business, insur- We see our role as jets to boast an ‘M’ registration The global crisis over the past few trend in purchases and prices are ance, mutual funds and financial number belonged to the company. years created a huge oversupply in now firming. With people recog- services, pensions and employee adding value to the “The Private Jet Company was the market. This reduced prices by nising that the market has bot- benefits, and space and satellite. for med when the Registry began. roughly 40 per cent and there are tomed, we are picking them up for The firm also provides bespoke fi- global offering of We brought in the first two aircraft, now excellent bargains to be had. clients now. We’ve been telling duciary and corporate services which were registered as aircraft The company is still very selective them for the last two years to wait through Cains Fiduciaries, and major financial num bers one and two,” says Man- with certain aircraft models and and not to purchase. And now we was the first Island firm to open an “ aging Director Tony Corlett. “The types, however the bargains are out are saying, it’s time to buy,” the office in London. In 2008, it centers” Registry has been a great success there. “There is now a healthy managing director explaines. opened an office in Singapore. story for the Isle of Man. It’s a very Managing Director Andrew high-level, highly-respected air- Corlett says that today half the craft re gistry.” firm’s work is legal, with the rest needs of our international clients,” us. But we’re still agricultural. Since then, The Private Jet of services. “Essentially we oper- he says. There’s light industry. Because Company has experienced ate on the hub and spoke basis, Though the Island´s image is we are a real economy, and are not ‘tremendous growth,’ says Corlett. where the hub is commercial law sometimes negatively construed just a sandbar somewhere, we’re Offering a complete range of tai- and the spokes are the other areas in the UK, Corlett points out that not a tax haven. We never have lored services, including aircraft of law such as litigation and prop- the decision was taken a decade been.” purchase and sales, de-registration erty,” he comments. ago to comply with OECD regu- Cains has contributed to the de- and registration, operational man- Corlett, who is a member of the lations, and that the relationship velopment of new Island indus- agement, crewing, technical docu- Isle of Man Treasury’s Finance with key regulatory bodies, in- tries by building niche practices in mentation and hangerage, the Steering Group, says that there is cluding money laundering watch- areas such as aerospace and satel- client has one point of contact for a great deal of public-private in- dogs in Washington, is strong. lite and is involved in other high- all their operational requirements. teraction between the Manx gov- Director Richard Vanderplank tech projects, like the high-speed The company has grown over 100 ernment and local businesses. adds, “It’s important to differenti- amphibious craft Aquada. per cent in the past two years. It is “Most things that go through our ate between the Isle of Man and Cains, which was named ‘Off- currently investing in a £3-million parliament here are subject to a other offshore jurisdictions as we shore Law Firm of the Year’ at pound Jet Centre on the Island that good commercial evaluation be- have a genuinely diverse econ- Legal Week’s 2007 British Legal will include secure corporate jet fore they hit the statute books, and omy. Financial services is an im- Awards and The Lawyer Awards hangerage and a Private VIP termi- the aim on the Island is to be reg- portant part of what we do here, 2008, is the Island’s exclusive nal with offices and meeting ulatory compliant with all interna- but not the only part. We have a member of Lex Mundi, the lead- rooms. tional standards but to be strong maritime tradition, so ship- ing global association of interna- For those looking to purchase, commercially sensitive to the ping has been very important to tional law firms. Corlett says that now is the time. 25th, September 2011 isle of man 6

Isle Of Man Creamery Findlay Macleod

The Isle of Man Creamery searches out new opportunities abroad for its top-quality range of traditional, as well as innovative, cheeses

small company with big we’ve been working for about a ideas perfectly describes year with the country’s biggest dis- Isle of Man Creamery, a tributor of European cheeses.” We have to cooperative of local, fam- Isle of Man Creamery’s cheeses, Aily-owned dairies whose which include a range of prime make sure cheese products are well established Cheddars and the traditional Manx in the UK and Ireland, and is now cheese known as Druidale, will we’re the aggressively moving into new mar- soon be on the shelves of Sam’s kets both near and far. Club stores across the United States “ best at what “Over the last three years we’ve and at Publix, one of the biggest su- been exporting to Spain where sales permarket chains in the south east- we do” have been growing significantly,” ern US. says managing director Fin - “There is the potential in the US dlay Mcleod. “And for annual sales of between 300 and we’ve got our first 400 tonnes of our cheese,” Findlay company also produces flavoured orders from the explains, arguing that exporting is a cheeses. The crumbly texture of the US where logical choice for a company seek- Island’s own Druidale makes it per- ing to boost its revenues and deals fect for blending with fruit. with other challenges. The remaining 1,000 tonnes of “The Isle of Man won’t ever be cheese are sold as “commodity a cheap place for manufacturing trade”, – supermarket own brands at because there’s an expensive Tesco, Asda and other chains where stretch of water between us they compete successfully with ri- and our markets and sup- vals from the UK, Ireland, Australia pliers, so we have to make and New Zealand. sure we’re the best at Besides moving into new mar- what we do,” says the kets, the creamery is dealing with managing director. the significant changes the Island’s The Creamery small dairy industry is undergoing. markets its Findlay Macleod Managing Director Farmers are retiring at a faster cheeses as a niche rate than new farmers can replace product, cele- them and the result is a decline in brated for their the milk produced on the Island, or the outdoor grazing fodder for the pared with some of the big UK pro- milk intake. The company’s goal is flavours and tex- around 25 million litres a year. From dairies’ cows, ensure high quality. ducers like Dairy Crest whose out- to convince younger farmers to pro- tures, but not so exclu- this, the company packages seven And each dairy in the coopera- put is something like 60,000 tonnes duce milk and urge existing farmers sive and expensive that million litres for local consumption tive undergoes strict inspection by a year,” he notes. to boost their output. people buy them only for spe- as its short shelf life prevents ex- independent accreditors of its milk- Around 300 tonnes of cheese are “That’s why we’re constantly cial occasions. “We see our ports. ing and collection process, as well sold on the Island, while another 700 looking at new markets for our cheeses as a quality purchase and as The Island’s pristine environ- as the cows’ welfare, diets, enclo- tonnes are exported under the Isle of high-value cheeses so we can divert a regular treat,” Findlay explains. ment, unsullied by heavy manufac- sures and veterinary care. Man Creamery label to other mar- what we’re now selling as commod- The Isle of Man Creamery is an turing or urban pollution, along “But our main volume of milk kets, chiefly the UK and Ireland. ity trade to our own label for those inherent part of the local economy with the rich grasses carpeting the goes into producing 2,000 tonnes of Along with the classic vintage, increased sales,” he says. and the community, processing all Island and which provides most of cheese a year and that is small com- mature and mild Cheddars, the 25th, September 2011 isle of man 7 Celton Manx Bill Mummery

The e-gaming sector has proved to be a big winner for the Island’s economy. No wonder Celton Manx’s Bill Mummery is so happy

-gaming is one of the pany were to be looking ultimately tween 200 and 300 transactions a fastest-growing industries to a listing on the London Stock second,’ he says. “It’s enormous – in the Isle of Man, with a Exchange, then frankly being on we are a very high volume busi- significant number of in- the Isle of Man is as good as being ness. Football accounts for 80 per Eternational firms locating in the City of London. It’s well cent of the firm’s profits.” to the jurisdiction over the last few known, well respected and well un- Despite the preponderance of the years. Indeed the ICT sector – of derstood.” word ‘global’ in much of his con- which e-gaming is a major compo- Just across the Irish Sea, Man- versation, Mummery is keen to nent – is now the third largest on chester United’s fans are still ab- stress that Celton Manx is, as its the Island, representing some 10 sorbing the news that the club’s name suggests, a company firmly per cent of national income. Not American owners are contemplat- rooted in the Isle of Man. Indeed it bad for an industry just over a ing floating on the Singapore stock has recently put its roots down even decade old. exchange, and this brings us to an- further with the completion of a In a market crowded with spec- other aspect of Celton Manx’s suc- brand new global corporate HQ on tacular successes, Isle of Man- cess. Mummery explains, “As part the outskirts of Douglas, which has based company Celton Manx, of building the brand outside of been designed to accommodate a which owns the global sport book Asia and also penetrating back into staff of 70. Mummery also stresses brand SBOBET, has had a rise our core markets of Asia, we iden- the company’s strong commitment more meteoric than most – becom- tified that English football is the to supporting the Manx community, ing a major global player in a mat- core product for what we do. Glob- with much of its profits being ter of three years. No wonder Kevin Nolan, captain of the ally it’s the largest followed sport ploughed back into social projects executive director Bill Mummery sponsored team and within that, English football, in and sports initiatives on the island. brims with such enthusiasm when particular the Premier League, is So what does the future hold for talking about the industry. Mum- the world standard.” And as Mum- the e-gaming sector as a whole? mery was ‘in at the ground floor’ ters, not just from a corporate per- mery points out, a club like Man- Europe and Asia will continue to of the e-gaming boom, having spective, but also in terms of the chester United has 300 million provide opportunities, argues helped float one of the ‘first-to- massive technical infrastructure in- supporters worldwide, of which Mum mery, in addition to new mar- market’ entrants on London’s AIM vested in the Island.” 190 million of those are in Asia. kets opening up in South America. market in 1998. Then in 2004 he be- So what is the key to the Isle of A firm understanding of these The US, he opines, is one potential came the Isle of Man government’s Man’s success in attracting e-gam- demographics encouraged Celton market where no one knows what e-gaming ambassador, a role that ing businesses to its shores? Mum- Manx to embark on of one its early is going to happen, but he believes saw him help develop the Island as mery argues, “Firstly, the legal major marketing moves – its spon- that it will eventually have to reg- one of the premier jurisdictions for system that’s in place, and from sorship of Premier League club ulate and tax e-gaming transac- the industry. Mummery returned to that the regulatory and legislative West Ham United. “That doesn’t tions, a process likely to start at the private sector in 2008, joining framework that has been estab- just raise awareness of our brand in state level and then grow to encom- Celton Manx and playing a crucial Willian D. Mummery Executive Director lished to manage and control what the UK and Europe,” says Mum- pass the whole country. role in expanding SBOBET world- is and needs to be a highly-regu- mery. “English football is broad- Predictions, however, are some- wide. lated sector.” He goes on to iden- cast globally to about 200 countries times hard to judge in an industry As Mummery points out, “The tify another key factor in the every weekend, with a strong foot- that moves at such lightning speed. origins of the company were origi- Being on the Isle of growth of e-gaming. “A world- print in Asia. So once that agree- As Mummery says, “The rate of nally in Asia, but as the business class telecommunications infra- ment was in place, our brand change in e-gaming is staggering. grew it became apparent that one Man is as good as structure is the lifeblood of a SBOBET was being transmitted We operate, in effect, in dog years needed to have a location that was business like mine,” he says. “It’s back to our core markets in Asia. – so a 12-month rate of change in a recognised across the industry at a being in the City of quite interesting that a small Island That’s been a very successful way conventional sector, we would global level. The shareholders then in the middle of the Irish Sea of lifting the brand in new territo- achieve seven years of change in had a ‘beauty parade’ of various ju- London. Its well know, should be one of the highest-qual- ries and strengthening it in its core that same period. The dynamics are risdictions to find out the best place “ ity telecoms centres in the world. territories.” enormous.” And as Bill Mummery to be based, licensed and regu- well respected and The providers of the data centres Mummery goes on to illustrate visibly savours the sheer, unbridled lated.” The Isle of Man “ticked all on the Island are truly world class.” just how central – and lucrative – momentum of this burgeoning in- the right boxes”, says Mummery. well understood” One more factor also plays its football is to the company. ‘Before dustry, it’s clear that ‘e-gaming “Now the jurisdiction is becoming part, argues Mummery. “It’s well the major football games start at a ambassador’ isn’t a job title he is the company’s global headquar- known that if a Manx-based com- weekend we are at a peak of be- quite ready to relinquish.

Microgaming Roger Raatgever Domicilium Andy Swearman and Phil Adcock

World’s largest e-gaming software firm enjoys a unique position Datacentre’s key businesses grow as more clients outsource

n 2001, the Isle of Man was one authorities apply a workable, prag- agnificent country- of the first jurisdictions in the matic approach that takes into con- side, remarkable world to introduce legislation sideration existing technological beaches and a re- specifically designed to benefit advances and lessons already learnt laxed lifestyle are Ie-gaming firms and protect by industry leaders. Mnot usually the players. Since then a network of e- “In the short term, it will proba- hallmarks of an environment gaming businesses and software de- bly manifest itself in a decrease in hosting high-tech enterprises, but velopment companies have profitability as the costs of regula- the datacentre and computer serv- emerged on the Island, tripling in tion are absorbed by software ices management company size since 2006 and due to double providers and operators. However, Domicilium (IOM) Ltd. has found that growth again this year. over time the business opportunity the Isle of Man the perfect place Currently boasting 24 licensed this represents will be huge as to do business for other reasons. companies and a further 22 in vari- more and more players go online to “The Island’s strongest point ous stages of set up, the sector now seek entertainment in secure and from a business point of view is plays a very important part in the Is- Roger Raatgever Chief Executive well-regulated markets,” he com- the outstanding public-private land´s economy. Last year, it regis- ments. partnership which means the gov- tered growth of 24 per cent, brought “In many respects, the recently ernment can make things happen more than £150 million into the local dards organization that provides an regulated markets are in part dupli- very quickly,” says Domicilium economy and employed 700 people international framework for best cating what the industry has done managing director Andy Swear- on the Island. operational practice requirements, with regard to ensuring a safe and man. It is no coincidence that 2001 was with particular emphasis on fair and responsible playing environment, in The company provides state- Andy Swearman Manager Director, Phil Adcock Technical Director also the year that Microgaming, the responsible gambling. part voluntarily, for over ten years. of-the-art IT ser vices including world’s largest online gaming soft- Raatgever says that the key ad- However, the biggest challenge is hosting facilities in jurisdictions ware provider, established its global vantages that the Isle of Man offers, an overzealous and misguided ap- around the world, next generation One of the company’s most company has enjoyed 46 per cent head office there. Headed by Roger apart from the obvious tax benefits, proach to responsible gaming that networks, domain name registra- popular services is cloud hosting growth for its platform over the Raatgever, the industry’s longest include the widespread availability could be adopted to the detriment of tion, cloud hosting and systems that provides computation, soft- past 12 months. serving CEO, Microgaming cur- of professional services, the acces- the industry while achieving very management for international ware, data access and storage to One of Domicilium’s advan- rently provides award-winning sibility of government, the neces- little with regard to responsible clients. It also has an office in the clients not wishing to operate their tages in cloud computing is that gaming solutions to over 160 lead- sary technical infrastructure and a gaming.” United States. own datacentres, usually because the company designed its own ing sites worl dwide; offering more high quality of life for staff. Microgaming is expecting mo- “It requires a very substantial of cost. system and it is located in the Isle than 500 game titles and 1,000 game “For any online business, the bile platforms, technology in which investment to set up a data pro- “Big retailers need to buy a lot of Man datacentre and is managed variants in 24 languages, across on- challenges to developing an IT clus- the company has been investing for cessing centre like ours and the of computers to handle, for exam- by its own engineers. line, land-based and mobile plat- ter are the need for a strong some years, to soon become a pow- payback is not immediate. We ple, the Christmas rush, but it gets “Clients of many other cloud forms. The company, whose telecommunications infrastructure, erful new driver of growth. Mi- travel around the world to look at very expensive as those comput- platforms never know where their growth rates have consistently out- server hosting, digital media service crogaming’s mobile software has locations where we could site this ers sit idle for the rest of the year,” data is actually located, but with performed the industry, signed 35 providers and professional services. won numerous industry awards, in- facility and our conclusion was Swearman says. us, customers know their data is new operators just last year. The Isle of Man meets all of these cluding Mobile Supplier of the Year that the best was the Isle of Man,” “However with our cloud plat- being held in a reliable environ- Microgaming’s history virtually needs admirably and, in addition, at the 2010 eGaming Review B2B recalls technical director Phil Ad- form, there is no massive capital ment,” the technical director ex- mirrors the birth and growth of the there is open and constructive dia- Awards. cock. outlay as you pay just for the com- plains. “Any problem is fully e-gaming industry. It has pioneered logue between the private sector “For a long time now, mobile has A wise decision as Domicil- puting power you need at a partic- traceable as there’s only one point a number of industry firsts, includ- and the government on matters per- been touted as the ‘one to watch’, ium’s customers have also dis- ular time.” Other clients use their of contact.” ing the largest online jackpot win in taining to online gaming. This but we genuinely believe we are covered that the Island has own computers for day-to-day The executives see a bright fu- history at €6.37m and the introduc- makes for a very attractive environ- now approaching a tipping point advantages such as lower energy trading but turn to Domicilium for ture in datacentre services as com- tion of third-party brands into the ment,” he comments. that will see this exciting new plat- costs which in other places can be peak times. panies continue to turn to online gaming sphere, such as Microgaming has long been a form begin to deliver on some of much higher for power-hungry Since launching two years ago, outsourcing for their computer Tomb Raider™ and The Lord of proponent for a well-regulated, li- these promises,” Raatgever con- datacentres. Domicilium’s cloud platform has needs. “Right now we see huge The Rings™. The company is also censed and appropriately taxed in- cludes. “Our belief and investment “And, we directly bill our had 20,000 users, from small start- opportunities to further develop a founding member of various in- dustry. Raatgever says the current in this area has given Microgaming clients so we´re very transparent ups to large enterprises, and while the business and build a strong dustry trade bodies such as wave of new regulation now taking a unique market position and a mas- and there are no hidden charges or cloud computing worldwide is brand that is recognised around eCOGRA, an independent London- place in Europe will benefit the in- sive head start.” mark-ups,” he says. growing 26 per cent a year, the the world,” Swearman says. based player protection and stan- dustry in the long term as long as 25th, September 2011 isle of man 8

Inside views of the luxurious penthouse, located at Douglas Marina

Dandara Seamus Nugent

“The Island’s housing market has never had negative equity and there is a strong rental market”, says Managing Director Nugent

ounded in 1988 by Irish en- go into recession and still has trepreneur Dan Tynan with healthy growth of 2.5 per cent. We a modest project of seven certainly haven’t dropped our prices new starter homes, Dan- at all since the crisis began. By com- Fdara has grown to become parison with our colleagues in the one of the Isle of Man’s biggest UK and Ireland, we’re in a good builders of residential and commer- place.” cial properties. As managing direc- Nugent is keen to stress, how- tor Seamus Nugent proudly points ever, that although house prices out, the company has now built over have remained high, Manx resi- 4,000 properties on the Island, hous- dents have plenty of benefits that ing somewhere between 12 and 15 make up for this higher cost – with per cent of the population. more disposable income and lower Over the last 23 years Dandara taxation and travel costs. “The Isle has also expanded its base well be- yond the Manx shore, with a host of building projects in the Channel Is- lands and across much of the UK We’ve always put the mainland. As Nugent explains, the company is involved in “a full range customers first. That’s of property, from nursing homes to offices and housing, both in urban how the company was and rural areas, and in terms of price, everything from £150,000 “ so sucessful at the starter homes up to £5m bespoke properties.” start. We gave people He points to the fact that Dan- dara “creates unique residences in extremely high quality prime locations throughout the Is- land”. One such location only a properties at value for short distance from Douglas is Bal- lanard Woods, an exclusive devel- money” opment of superior executive homes. “Increasing numbers of high net worth individuals are coming to the of Man is an incredible place to live, Island and we are mindful of the a great place to bring up a family,” need to be able to offer properties he enthuses. “Costs are less here for with the exclusivity they desire and all sorts of things. Things like car homes that complement their and household insurance are a frac- lifestyle. The government uses the tion of the cost in the UK. And if it slogan ‘Freedom to Flourish’ in ef- only takes you 15 minutes to get to forts to attract these wealthy entre- work, you’ve got more time to preneurs along with new business spend with your family. This means and investment.” people are involved in a lot more “It’s worth remembering that the things outside of their jobs here, es- top rate of personal tax is 20p in the pecially sport. And in economic £ and no individual can pay more terms, we’ve got a reserve fund – than £115,000 a year in income tax how many countries have that? We and there are no capital taxes on the don’t have a deficit. Money has island and more companies here are been spent on very worthwhile exempt from corporation tax.” things. The infrastructure on the Is- Seamus Nugent Managing Director Seamus Nugent is clear about the land is second to none.” philosophy that underpins Dan- Many in the construction sector dara’s success. “We’ve always put have complained that the Island’s erty in the Isle of Man has done ex- the customers first,” he says. planning regulations are too tough, tremely well.” “That’s how the company was so making it harder to meet the hous- Nevertheless, the Island shares successful at the start. We gave peo- ing needs of a growing population. with the UK many of the problems ‘The Ascot’ from Dandara’s luxury Ballanard Woods development ple extremely high quality proper- Nugent agrees that “every year that have affected the housing mar- ties that represented excellent value there is more legislation, more bu- ket since the recession. “It’s harder for money. And even today in the reaucracy. It doesn’t get simpler – it for first-time buyers to get funding, timber-frame properties, a sustain- those people and give them a long- that go well, are retained within the Isle of Man our properties com- just gets tougher.” However, he compared to a few years ago” ex- able approach to forestry is also a term prospect in the company.” company.” mand a premium because they’re points out that that the regulatory plains Nugent. “The maximum key component in the company’s Dandara’s structure is the key to Nugent is also keen that the new very well constructed. The core system in the Island is very similar mortgages here are 90 per cent and green agenda. “We plant thousands this attitude, as Nugent explains. Manx government builds on the Is- thing is that the customer gets a re- to the UK – with just one notable people have to have a pretty clean of trees every year – far more than “We’re different from most prop- land’s wider success by focusing on ally good deal.” difference. “We have third party credit history. It’s obviously we use” he says. erty companies because we do all the wider international market. According to Nugent, the com- right of appeal, and that obviously tougher for young people because Despite progressive working our own design work, we have all “The big challenge for the new gov- pany’s reputation on the Island is causes more delays,” he explains. the lifestyle is credit cards, car loans practices like these, however, Nu- our own architects, engineers and ernment is to promote the Island “second to none” and its emphasis Another factor that has slowed and so on. That is causing a little bit gent admits that the Isle of Man suf- cost-surveyors. We own all our own better, to continue to look hard at on customer satisfaction has meant development, Nugent argues, is that of a slowdown in the market be- fers from something of an image plant, equipment and trucks, our how it can generate new business. that many Manx residents have had the whole Island is regarded as a cause you don’t have the same num- problem. “There is a lot of igno- own drivers, excavators, every- Other jurisdictions are not doing so a relationship with the firm stretch- conservation zone. “One of the ber of people coming in at the rance about the Island and I think thing. Very few firms operate like well, we're doing better than most – ing across its 23-year history. things that hasn't happened here, is bottom.” the Isle of Man has a job to do to that any more – they sub-contract but we need to hang on to our posi- He adds, “At the end of the day that there should have been more If this all sounds too painfully fa- market itself a lot more positively,” everything out. Unlike them, we’re tion and move forward from there.” our success can be measured in how zoning of land for housing – it has miliar, there are definitely some as- he argues. “People hear things about not just property developers – we’re He continues, “Because the Isle- popular we are and the number of been very slow,” he says. “There is pects to the Island’s housing market the TT races or Manx cats, and builders and designers, and we have and has done very well for the last people prepared to make that kind not a lot of land available, In fact, that are a world away from the UK’s that’s all they really know about the our own legal department. It’s all in- 30 years, people are inclined to get of step, because buying a house is a there hasn't been any new land fixation with transport. “Half an Island, and yet it’s a significant house.” a bit complacent. But we can’t af- huge purchase. Given that a signif- zoned since 1980.” hour is the absolute maximum for business centre right on their Nugent is confident that this ford to be complacent. That’s why I icant percentage of the population Despite these factors, Nugent ar- anyone’s commute to work,” Nu- doorstep. We need to get the mes- structure has been a key factor in think diversification is so important. of the Island have made that com- gues that the Island offers excellent gent says. sage out there that the Isle of Man is Dandara’s success over the last Our natural resources are our people mitment with us, I think that is a big opportunities for investors looking Echoing the Manx government’s a very efficient, highly regulated quarter-century. “You have ab- and our ways of doing business. We seal of approval.” to invest in property. “The housing emphasis on conservation, Nugent place to do business.” solute control that way,” he ex- need to be seen to be an absolutely Nugent is cautiously optimistic market on the Island has never ex- is proud to champion Dandara’s So what does the future hold for plains. “You can guarantee the legitimate place to do business but about the impact of the recession on perienced negative equity and there commitment to environmental is- Dandara? “What we want to do is to quality, the time and the cost – at the same time an extremely com- the property sector, arguing that the is a strong rental demand,” he says. sues. “We offer people options like maintain the business,” Nugent you’re not in the hands of third par- petitive one. The quality of the serv- Island hasn’t been hit as hard as “Since the property market took off solar panels, insulation standards says. “It’s not just a question of ties. And the other thing is that you ice we give has to be the best. And elsewhere. “Prices are still ex- again in the late 90s, growth here are extremely high and we have our growth. We have a lot of young retain all the intelligence and expe- that’s what Dandara always strives tremely strong,” he says. “It has to has been stronger than in the UK. own recycling compound on the Is- people who we’re bringing through rience. Everything that you learn, to be – the best.” be remembered the Island did not Anyone who has invested in prop- land.” Given that Dandara builds the firm. We want to hang on to all both the challenges and the things