In rather an unusual development, the Isle of Man is making a bid to become a hub for alternative finance.
The Isle of Man is implementing a suitable regulatory environment for both equity crowdfunding and peer-to-peer lending platforms. The Isle of Man Department of Economic Development has worked closely with the Financial Services Authority (FSA) and industry on the island to develop the new framework. The legislation will allow exchange-based platforms (debt and investment based “crowdfunders”, in the regulatory sense) to base themselves on the island. Existing platforms will be required to apply through the Isle of Man Financial Services Authority for a new “Class 6 Crowdfunding License”.
Basing a crowdfunding business in the Isle of Man offers potential advantages from a tax perspective. But there may be a level tension here, given the opacity that generally surrounds such efficiencies, and the contrasting transparency of process within alternative finance.
Laurence Skelly MHK, Minister for the Isle of Man Department of Economic Development, commented:
‘The new Crowdfunding Regime is a truly international initiative that is set to give a home to crowdfunding platforms looking to expand into a global marketplace. The new legislation has been designed to bring more business to the Isle of Man and further establish us as a home for innovation and entrepreneurialism.”
John Garland, Head of Corporate Financial Services at the Department, also weighed in:
‘We have been working very closely with the Isle of Man FSA and local industry to develop a robust and business friendly licence that can support new and exciting business on the Isle of Man. The use of crowdfunding platforms complements our significant experience in professional and financial services while further showcasing the Island as an international centre for Fintech and e-Business. The Isle of Man is the first international business centre to introduce this type of legislation and we believe it will support the creation and growth of new businesses on the Isle of Man.”