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Why HNW business migrants are increasingly drawn to the Isle of Man as an alternative to the UK

by Guy Wiltcher

The UK has always been a popular destination for high-net-worth individuals (HNWIs) from around the world due to its attractive cultural, educational, and legal environment, coupled with its ease and security in investing.

Options for prospective migrants have become more limited since the UK closed its Tier 1 Investor Visa programme on 17 February 2022, and now the Business Migrant Visa route is one of the few available remaining choices.

The Business Migrant Visa option is intended for migrants with business experience who seek to establish an innovative, viable, and scalable business in the UK. If certain criteria are met, this visa can lead to indefinite leave to remain (ILR) in the UK being granted after 3 years, and full citizenship after a further 12 months.

However, the types of businesses eligible for approval under this visa are somewhat restricted. Combined with the requirement for approval from an external endorsing body, these restrictions mean this visa is problematic even for well-funded and robust business proposals.

UK visa restrictions and obstacles have led to an upsurge in the number of HNWI business migrants applying to the Isle of Man. The Isle of Man is a self-governing British crown dependency and is part of a common travel area with the United Kingdom. Its easier visa requirements, favourable lifestyle, and attractive taxation benefits make the Isle of Man an appealing entry point for a visa that can also lead to a full British passport.

The Isle of Man’s Business Migrant visa route is similar to that of the UK, but with some important differentiators.

Reasons why the Isle of Man is a sought-after place to live and do business

  • The Isle of Man is blessed with an extremely high-quality natural environment, and was designated as a UNESCO Biosphere in 2016 in recognition of this along with its unique culture, heritage and economy, and the commitment of its residents to cherish and nurture these qualities. The island is the only entire-nation biosphere in the world and all of its land and territorial sea are included.
  • It has a very low crime rate and is ranked the safest place to live in the British Isles. This is a particular factor in attracting HNWIs from parts of the world where they currently feel vulnerable from a security point of view.
  • The Isle of Man has an open housing market with excellent healthcare facilities. Additionally, there are superb educational options available, including 32 primary and 5 secondary schools, and University Collage Isle of Man which provides courses to a degree level. King William's College and the Buchan School, a leading public school entity, offers both boarding and day provisions.
  • The personal tax regime is very competitive when compared to the UK, with no capital, inheritance, or wealth taxes, and a top income tax rate of 20%. There is also a tax cap regime, and additional concessional treatment available in the early years for those coming to make sizable business investments on the Isle of Man.
  • All of these factors contributed to the island being voted as “the best place to live in the British Isles for expats” (HSBC expat survey 2019).

A great location to do business

The Isle of Man’s mature and globally-connected financial sector ensures a comprehensive range of services on offer for those considering relocating their existing business or establishing a new operation on the island.

As a “first mover” in a number of areas of business and with a history of entrepreneurism, the island has a natural taste for innovation and collaboration. The Isle of Man’s Department for Enterprise offers a wealth of support via business grants and assistance.

Business transactions with the UK are seamless, and there is a full double tax treaty in place and together the UK and the Isle of Man are part of a common customs and VAT area. Compatible common law legal systems offer excellent security and protection for investments.

Another significant benefit is that corporate profits are subject to an income tax rate of 0% and there is no withholding tax on dividends or interest payments.

A comparison of the UK and Isle of Man Business Migrant Innovator routes

Both jurisdictions require an innovative, viable, and scalable business idea to qualify for visa consideration. However, there are differences in the application process, scope of eligibility, and the targets that businesses must achieve.

Applicants must submit an application including a business plan for both jurisdictions. The UK requires this application to be endorsed by an external endorsing body, while in the Isle of Man, the Department for Enterprise acts as the endorsing body. The latter is arguably a more transparent process, and allows for a greater degree of communication and feedback.

The Isle of Man route, in contrast to the UK, allows the investment in – or takeover of – an existing business to qualify for the visa, as long as the migrant resides on the Isle of Man and plays an active role in the business.

Experience has shown that the high threshold for “innovation” in the UK has limited the number of successful visa applications. In contrast, the Isle of Man’s view on whether a new business is innovative is that it is a business new to the Isle of Man, or, if not a new business, that the business be involved in, for example, accessing new markets or utilising a unique business model.

This means that the Isle of Man route enables the establishment of a branch, subsidiary, service centre, or holding company for an overseas enterprise. For HNWIs this is particularly useful, allowing them scope to set up associated operations of their existing businesses.

The Isle of Man route is also open to an investment in a franchised business, if not already represented.

The UK stipulates no minimum investment amount, although there is a requirement for any proposal to be adequately funded. The Isle of Man visa route requires a minimum investment of GBP 50,000 and evidence that the business has the resources available to ensure its viability, which makes this a relatively cost effective route compared to some other citizenship by investment programmes.

To be granted leave to remain in the UK after three years, a business migrant must meet two out of a range of seven performance measures, of which the creation of five jobs is one. By contrast, the Isle of Man’s main requirement is the creation of at least three jobs by the end of the third year.

 Sole representative of an Overseas Business route

Another possibility for a business migrant is the Sole Representative of an Overseas Business route, a category which enables a person to migrate for work at a specific business, and can also lead to permanent residence.

In the UK, this route is currently only open to representatives of newspapers, news agencies, or broadcasting organisations. However, in the Isle of Man, providing that the business and the representative can satisfy a range of specified conditions, this route is open to any overseas business wishing to establish a branch on the Isle of Man.

A highly attractive proposition

For entrepreneurial HNWIs looking to settle and invest in the British Isles, and gain British citizenship, the Isle of Man’s unique lifestyle offering, welcoming community, easy connectivity to the UK and beyond, and its extremely favourable business environment make it an increasingly attractive and achievable proposition.

08 April 2024

Guy Wiltcher

Greystone LLC, Chartered Accountants, Consultant

Greystone LLC, Chartered Accountants