This publication recently questioned the Isle of Man's financial services sector about its strategy amid tests such as those of Brexit and competition from other IFCs.

Finance Isle of Man, an organisation that speaks for the international financial centre, looks at one of the Isle of Man’s largest economic sectors, financial and professional services.

This article is written by Michael Crowe, chief executive of that organisation. This publication has questioned Crowe about strategy.

How well does the island claim it is positioned to handle different Brexit scenarios (no deal, the May "Brexit in name only" deal, some other outcome)?
The island’s position, currently, is that it sits outside of the European Union (EU), and is not included within the UK’s membership of the EU. 

The Isle of Man is, however, by virtue of Protocol 3 to the UK’s Treaty of Accession, effectively part of the EU’s customs union, and goods in trade can flow freely between the Island and the UK and EU. 

However, the Isle of Man is not covered by EU provisions as they relate to services, and since the majority of the Isle of Man’s economy is based on services, this position is likely to be largely unaffected by the UK’s withdrawal from the EU, no matter what shape that eventually takes. 

Therefore, the biggest impact on the island will be by virtue of its close economic ties to the UK, and preparations are being made to ensure that the Isle of Man’s legislative and regulatory frameworks continue to function, that it can continue to trade freely with the UK, and that various potential ‘Day 1’ issues are addressed. As a result of our economic ties, much of our legislation is affected by Brexit and we have passed our own European Union & Trade Bill to ensure that we can still have robust regulation after 29 March. This is mainly in relation to our customs, and agriculture and fisheries legislation. 
 
The Isle of Man Government has stressed that it would ideally wish to retain the ability to continue to trade freely in goods with the EU, without being subject to tariffs or other barriers to trade. However, its ability to do so will ultimately be informed by the deal the UK succeeds in negotiating for itself. 

What sectors does the IoM think are most likely to thrive there in the next few years and why?
The Isle of Man has a stable and diverse economy spanning finance, eGaming, eBusiness, media, aerospace, manufacturing, food and drink production and tourism. It has an advanced infrastructure, a financially rewarding business environment and an excellent quality of life. These factors make the island well placed to continue nurturing traditional sectors as well as emerging industries.

A large global campaign, starting towards the end of 2018 and running through the first quarter of 2019, promoting the life insurance and wealth management sector should see continued activity in this sector. The Isle of Man is a leading international centre for life insurance and wealth management, endorsed by world-class businesses that choose the Isle of Man as their base, offering an efficient, experienced and well-governed environment for businesses and their customers. The Island’s 40-year-old life insurance sector continues to thrive, providing economic growth and career opportunities for the island’s residents. 

A lot of jurisdictions are keen on blockchain and other distributed ledger technology, not just for managing crypto-currencies. Can you talk a bit about the state of play in the IoM, its approach to the regulation of this space, potential for change, etc. For example, can such a jurisdiction thrive if there aren't major banks willing to transact in cryptos (which seems to be the case in Jersey, for example?)

Blockchain represents an opportunity for the Isle of Man - a jurisdiction already seen as the home for technological innovation.  

Interest in blockchain has spread from financial services to many other industries including eGaming, eBusiness and pharmaceuticals. The technology also has applications in areas such as “Know Your Customer”, cross-border payments, patient health records, land registry data and tracking the provenance of goods. Numerous applications have already been built to revolutionise processes in these sectors, many companies having raised the funds for the applications through “Initial Coin Offerings”. The technology has the potential to increase efficiency, reduce capital consumption, enhance revenue and reduce losses. We have considered our position in this fast-changing industry and will be moving forward with a roadmap for the future later this year.

The EU has reportedly criticised the "abusive" VAT regime of the island. Can you discuss this?
The Isle of Man government follows the same policies, laws and rules as the UK in respect of registering aircraft leasing and chartering businesses for VAT; however, due to the nature of these allegations we asked HMT to assess the treatment of VAT on aircrafts. HMT have undertaken a thorough review and we are expecting their findings shortly.

What is being done in the IoM to recruit and bring in more financial sector talent? 
As part of the Isle of Man Department for Enterprise, Locate Isle of Man has the key role of highlighting the benefits of living and working in the Isle of Man to people in the UK and further afield.  It is working to attract a variety of workers to the island, from graduates to skilled workers. Finance Isle of Man will continue to work with Locate Isle of Man to promote the island’s positives for those wishing to prosper within financial services while showcasing the island as a great place to live and work. Entrepreneurs and well-known global brands alike will find the Isle of Man to be a rewarding and beautiful place to call home. 

As of January 2018, the Isle of Man Government simplified the work permit process making it even easier with a new online portal and a register of exempt persons. These changes allow employers, self-employed workers, spouses, civil partners, and cohabiting partners to apply online for a work permit at any time. 

The Department also offers an Employee Relocation Incentive that has so far been hugely effective, helping local businesses apply for assistance resulting in over 200 employee relocations to the Isle of Man, which will contribute to the Island’s economy. This Incentive provides employers funding of up to 20 per cent towards an employee’s first year net salary, capped at £10,000 ($12,956) per position. We will also be working to progress financial services’ qualifications and highlight the career opportunities afforded to school leavers and post-graduates.

Are there new or rising sectors that could make a home in the island?
The Isle of Man has a diversified economy that encompasses traditional sectors and emerging industries. It has a strong track record of resourcefulness, resilience and teamwork for successfully adjusting to a changing world.

Training and mentor schemes, grant, loan and equity investment and world-class connectivity with an excellent telecoms and power infrastructure provide a number of opportunities for creating and developing a business in the Isle of Man.

An example of the Isle of Man’s innovative approach is the introduction of the Alternative Banking Regime framework, which provides two additional types of banking licences. The ABR has been designed to attract banking operations to the Island, in particular private banks, foreign bank branches and representative offices. In July 2018, Investec Bank (Channel Islands) was granted the first ABR licence. 

There is also an opportunity for technology based or other financial services businesses, to explore a natural progression into the provision of banking services in an environment that is both supportive and financially attractive. 

There have been initiatives to encourage funds, venture capital and other investment areas in the island over recent years - can we talk about those a bit?
The Isle of Man Department for Enterprise will continue to support on-island businesses entering their next growth phase through the Enterprise Development Scheme (EDS) to aid their expansion. The scheme provides grant, loan and equity investment to new start-ups, existing expanding businesses and businesses wishing to relocate to the Island.

Finance Isle of Man will continue to engage with the island’s wealth and funds services and continue to support the Isle of Man Wealth and Funds Services Association’s promotional activity which will result in an increase in activity and focus around events both on and off the Island in 2019 and beyond, resulting in increased visibility globally for the sector.