Isle of Man focusing on India
Head of Special Projects
One of the Isle of Man Government’s Statements of Intent is to forge sustainable relationships with other countries and business partners. A three tier country strategy has been developed by the Department of Economic Development which seeks to target international business development resources to where they are likely to generate the greatest return.
India is one of the largest countries in the world in terms of population (1.3bn) and long term economic growth potential and has had close legal, economic, migration and sporting ties with all things British over many years.
It is only natural therefore that India should be expected to be potentially welcoming of the services from the Isle of Man.
And so it has been proven with the success of the Isle of Man’s early work to cultivate business here, quickly becoming the number one base for listing of Indian and other foreign parented companies on London’s AIM market.
Unfortunately in recent years this position has been tempered somewhat by the market crash and by the perceived abuse of double taxation arrangements by certain other finance centres.
A slowdown in the Indian economy to 5.5% growth in this the year before their next elections, is further unhelpful at a time when a resurgence of interest in foreign and investments was expected.
Indian derived foreign investments have recently had something of a roller coaster ride particularly as there is increasing currency volatility around the value of the Rupee. Theoretically a window of opportunity still exists and most economists and observers would see India as a good long term bet but it will be interesting to see if the 2014 government takes a more liberal or protectionist view. This may be assisted by the appointment of Raghuram Rajan as the new Governor of the Central Bank, widely hailed as a visionary economist
Despite some recent tightening up of outward capital flows by the Central Bank, both inward and outward business and investment opportunities remain and the numbers are impressive – inbound investment in 2010 was $39bn and outbound investment was $15bn* and while growth may be down from 8.5% then to 5.5% now, this is still a very respectable figure.
So where are the opportunities for synergies between the Isle of Man and India against this backdrop?
Early achievement with India came from relationships developed by Isle of Man lawyers with their Indian counterparts resulting in the AIM Market successes.
With the creation of the new Department of Economic Development in 2010 a country strategy approach for the Isle of Man was put in place which scored key markets and ranked them for prioritisation- with India confirmed as a market with established and long term potential.
A marketing strategy was subsequently put into place designed to:
a) raise the profile of the Isle of Man as a jurisdiction that can add real value to Indian companies seeking a base to import into the European Union;
b) add value and deliver expertise to Indian HNWIs (resident and non-resident) seeking Wealth Management services;
c) raise the profile of the Isle of Man as a jurisdiction that can add real value to Indian Professional Advisers seeking suitable asset holding structures for overseas assets (eg corporate jets) and future overseas investment/capital raising (eg IPOs and UK commercial property investment).
Importantly, our core propositions - which stem from the Isle of Man’s capacity for real FDI and trading base possibilities - are not all shared by competing island business/finance centres, giving the Isle of Man competitive advantage and potential opportunity in these areas.
For example, none of our peer offshore counterparts operate as a single indirect tax area with the UK and because of this customs import procedures and controls apply to goods traded between eg the Channel Islands and the EU.
And the Isle of Man has also become a home to a number of high profile Indian businessmen providing a welcoming environment for HNWIs and NRIs with an unrivalled quality of life and conducive working environment along with a personal tax cap (at £120,000 maximum payable pa).
The Isle of Man has also become a conduit for investment into India with a number of infrastructure funds designed to attract investment into much needed projects in the country and even technology transfer projects where the technology has been developed and patented in the Isle of Man and utilised by major Indian corporations – for example the Isle of Man’s Bladon Jet Turbine technology will be used by the hybrid supercar Jaguar (owned by TATA Group) and who will also utilise the same technology in micro power generators in remote areas of India.
Building on its marketing and events in India in 2012 the Department of Economic Development has initiated a full programme of activity in 2013 to include a series of India themed dinners in London and further visits to India planned for October and December, the latter to include a delegation of Isle of Man businesses and professionals and tying in with attendance at the Foundation for International Tax Conference in Mumbai.
These may be seen as small steps for a small Island in a huge continent and yet despite a lack of awareness among the general populous of India, the Isle of Man can already be seen to have made some positive impact and already enjoys the recognition and respect of many of its professionals.
The Isle of Man remains poised and ready to continue to find ways of supporting and optimising Indian based inward and outward investments and related projects – which are much needed if stability and growth are to be achieved. It is to be hoped that India’s incoming government in 2014 recognises and establishes improved conditions for this to happen and their new Central Bank Governor can influence this to the benefit of long term confidence in the market