Isle of Man and e-Gaming: Supporting e-Gaming companies to relocate
2nd May 2018
The Isle of Man has been attracting e-Gaming companies to set up their business on island for almost 20 years. This initiative was based on the need to develop and diversify the island’s economy and to build on the very successful finance sector. The Isle of Man Government and the private sector have spent time and energy to create a ‘fit for purpose’ regulatory framework for e-Gaming companies to establish and thrive within the island’s economy. MSI's member firm Dixcart Management (IOM) Limited provides further information.
Almost 20 years later this initiative has proved a great success with many e-Gaming and technology companies, both big and small, setting up on island. In fact, the e-Gaming and Technology sectors now account for over 20% of the island’s National Income (source – Isle of Man National Income Report 2015/16).
General Benefits of Establishing your e-Gaming business on the Isle of Man
- Low betting duty of between 1.5% and 0.1%, on gross profit
- World-class infrastructure, bandwidth and power resilience coupled with excellent data hosting facilities
- An extensive clustering of service providers/advisers and peripheral activities such as marketing, software and IT providers with experience in e-Gaming business
- Supportive legislation, making the Isle of Man an ideal location for disaster recovery
- Consumer focused regulation and player protection
- A simple application process, typically 10 -12 weeks
- A qualified and knowledgeable workforce
- Political stability, OECD White Listed and member of the World Trade Organisation
- No need for a Fiscal Representative in the UK
- Double Duty Relief for eligible EU member states
- Financial assistance for start-ups and relocations
- Professional advisers with the experience to support this sector
Regulatory Aspects – The Isle of Man Gambling Supervision Commission (GSC)
The Isle of Man Gambling Supervision Commission is an independent statutory board established in 1962.
In addition to the licensing and regulation of land-based gambling operations (casino, betting offices, lotteries etc.), the Commission also regulates all online gambling activities controlled by Isle of Man companies, which have grown significantly in recent years.
Protecting the Island’s Reputation
The Isle of Man places protection of the island’s reputation as a top priority. This is demonstrated by the three core principles that the GSC upholds, which are:
- To keep the gambling industry crime free
- To protect the young and those at risk
- To ensure that the services offered by licence holders are fair and that players receive their true winnings
The Isle of Man Government has created a wide-ranging support package to attract and retain businesses of many types, including e-Gaming. A brief outline of five of these initiatives is detailed below.
- Financial Assistance Scheme – A wide ranging scheme offering financial assistance/grants of up to 40% of the first-year costs of the business. This assistance, is given on a case by case basis and paid retrospectively. It may include building refurbishment, office equipment, marketing activity, set-up costs, legal and professional fees, rent and training.
- Key Employee Concession – Introduced in April 2003 to attract new businesses and employees to the island, this concession applies to key employees within a business who will be taxed on their Isle of Man employment income, benefit in kind and rent only. All other sources of income, either Manx based or from outside the island, will not be chargeable to income tax. This concession is available for the first 3 years of employment only and must be agreed in advance with the Assessor of Income Tax.
- Employer’s Recruitment Scheme – Designed to support new Isle of Man and existing businesses which are creating job growth from off the island in key areas. The scheme offers the employer a grant of 20% of each new employee’s salary capped at £10,000 per employee. There is no limit to the number of employees covered by the application and the grant is paid to the employer.
- Relocation Expenses – Introduced from 6 April 2016, ‘reasonable relocation expenses’ (e.g. removal costs, legal costs of selling and then buying in the Isle of Man) paid by the employer to the employee of up to £20,000 will be exempt from any charge to income tax. In addition, travel expenses and temporary accommodation may also be exempt from income tax for an initial period.
- Tax Cap – A statutory income tax cap was introduced in 2006 as a Government initiative to attract wealthy entrepreneurs to live on the island. For the current tax year (2018/2019), the ‘Tax Cap’ is £125,000 for an individual (and £250,000 for jointly assessed couples). To elect for the tax cap an individual would apply to be taxed as such and, once approved, commit to paying the tax cap for a period of 5 consecutive tax years.
A prospective new e-Gaming business to the island would engage with Dixcart to assist with relocation as follows;
- XYZ Gaming Ltd, an already successful e-Gaming business is considering opening a new office in the Isle of Man, having heard of the island’s proven track record in supporting this type of organisation.
- XYZ approaches the Dixcart office enquiring how to start the process and requesting information on forming a new company, engaging with other local service professionals, the Regulator and Government.
- XYZ is sent some general information on company formation, the Gambling Supervision Commission etc. from the Dixcart manager who acts as their key point of contact.
- Dixcart arranges a hosted visit for members of the senior team to visit the island and meet with the Isle of Man’s Gambling Supervision Commission management, local Data Centres, Government assistance teams etc. to ensure that all the general information necessary to move forward is obtained. Dixcart can coordinate all the professional services that are required.
- XYZ decides to apply for an Isle of Man gaming licence and open an office in Douglas, initially employing 6 people but with plans to expand further over the next 3–5 years.
- Dixcart works with XYZ to go through the GSC licence application process, structuring the various grant applications, finding suitable premises and even providing introductions to local recruitment companies, who can assist with staff headhunting.
- Dixcart can assist with the appointment of an island based ‘Designated Official’ (DO) and provide additional support, including the provision of a managed office facility if required.
- The Isle of Man Government’s Income Tax Division and Department for Enterprise issue their financial assistance support letters detailing the maximum number of grants available, providing comfort to XYZ that up to 40% of its first-year costs will be repaid and that its key employees will enjoy attractive remuneration packages.
- 12 weeks later the licence is granted and XYZ can begin trading. Dixcart continues to work with the company to expand its workforce on island.
Dixcart’s Isle of Man office has been supporting businesses to establish real substance on the island for over 20 years and are therefore the perfect partners to help guide a business through this process. With a very experienced team in place and having provided serviced office facilities on the Isle of Man for over 10 years, Dixcart is well placed to help an e-Gaming business succeed.
About Dixcart Management (IOM) Ltd - Douglas
With over 25 years’ experience, Dixcart Management (IOM) Limited specialises in the establishment, management and administration of offshore structures for international commercial and private clients.
View firm profile