The Isle of Man is cashing in on the growth of electronic commerce with a series of moves designed to encourage financial services to base their Internet services in the tax haven.
In a bid to become an early pioneer, the Manx government has already granted a global Internet banking licence to the Bank of Ireland to locate what is described as the world’s first global Internet bank – F-Sharp – on the island. Five more licences are to follow later in the year.
These will be followed by a raft of legislation intended to remove the legal restraints and uncertainties which characterise e-commerce in most countries.
Manx financial authorities say they can provide certainty and tax advantages to Internet service providers at a time when other jurisdictions have yet to decide how they will tax and regulate the growing sector.
A newly-published leaflet from the Manx government makes much of the point that in most countries attitudes to taxes on e-commerce and regulatory issues are still evolving, and the resulting uncertainty represents a risk to anyone investing in Internet services.
Michael Gates, head of the Manx government’s international services division, said: ‘The island’s favourable regulatory and tax arrangements, its IT infrastructure and legislative framework, all of which are designed to facilitate legitimate business, make it a natural choice to lead the way in the international marketplace.’
Banking, insurance, stockbroking and investment were named as the sort of sectors that the crown dependency would like to attract.
The new legislation, contained in the Electronic Transactions Bill, will put e-commerce and paper-based commerce on the same legal footing.
It will also remove any distinctions between different types of technology and pave the way for the use of electronic signatures.
Richard Baron, deputy head of the Institute of Director’s policy unit which has been looking at e-commerce issues, said: ‘You don’t just want your own country’s law sorted out, you want contracts made to stand up in other countries as well.’
But he added that those jurisdictions which did get their regimes sorted out were likely to prove more attractive.
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