Isle of Man makes a bid for ebusiness

The Isle of Man has launched a campaign to convince UK companies to base their ebusiness operations on the island.

At first, the home of the TT bike races may not be an obvious place for hi-tech organisations to be located. But the Crown Dependency is full of surprises.

Did you know that every pair of Marks & Spencer slippers in the world is made on the Isle of Man? Or that by 2006, the island plans to offer businesses a zero rate of corporate tax? Or, more relevantly to the UK's IT directors, that it has one of the world's most advanced telecommunications infrastructures and offers 40 per cent grants for hardware, software and maintenance contracts?

The island has 100 per cent broadband coverage, and its resident telco, Manx Telecom, established the second 3G mobile phone service in the world. Some £50m has been invested in communications, and the same amount is likely to be spent over the next five years, according to Tim Craine, director of ebusiness at The Treasury in the Isle of Man government.

'Continuing investment in IT is important for our business community,' he says.

'For example, we want to make the Isle of Man a centre for downloading and processing satellite data. We are in active negotiation with a number of satellite companies.'

Several companies have already set up operations on the island, including internet payment providers and online gambling sites.

The growth of the tax haven for web betting saw it become a target for organised criminals, blackmailing companies with the threat of unleashing denial of service attacks. But Craine says the government was keen to send a message that it is a safe haven too.

'Data that we captured and forensics we provided to the UK's National Hi-Tech Crime Unit were instrumental in catching the Russian gang behind the attacks,' he says.

Another area of potential growth is disaster recovery, and the Manx government passed legislation in 2002 to enable businesses to operate temporarily from the island in the event of a problem at their home location.

But not everything is necessarily that easy for interested companies. The Isle of Man has less than one per cent unemployment - great for residents, but not ideal for recruiting local, skilled IT professionals. So if businesses want to set up a base, they will most likely need to convince existing staff to move. The benefit is that the island has one of the highest standards of living in the British Isles, and low personal tax rates.

Craine says that a couple of household names are already considering opportunities on the island.

'We don't need a lot of business, we only need a few to make this a success. In three years, I'd be happy to have achieved 10 to 15 relocations.' he says.

'A business will be more profitable on the Isle of Man. If it doesn't make financial sense, then quality of life and the technology infrastructure is irrelevant.'

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