Isle of Man: Business Environment
Residence and Property
Immigration legislation on the Isle of Man is similar to that in the United Kingdom and applies to nearly everyone who is not a British Citizen or who does not have the right of abode in the United Kingdom, although Irish citizens and EEA citizens exercising Treaty rights are exempt from many provisions.
The Manx government permits non-residents to purchase and own real estate on the island. Indeed, without an influx of new residents there would be a decline in the overall population. The official policy is to target specific areas for growth and ensure their compatibility with the Manx community. The recent expansion of the finance sector has created many more jobs than could possibly be supplied by the existing market. The resulting need for professional and skilled people from outside the Island is therefore likely to continue for the foreseeable future.
Potential real estate buyers will find a comprehensive range of properties available on the Island ranging from apartments right up to large country and coastal properties. New executive developments on the periphery of Douglas have met much of the increased demand for new property. Housing stock exists in many other parts of the Island, where prices can often be lower. Property values have increased in recent years and are comparable with many areas of England and Wales and lower than the south-east of England.
In 2000 the Isle of Man's parliament, Tynwald, passed a Residence Bill which gives the island's administration the power to impose immigration controls on non-Manx individuals.
The Isle of Man is being pressured by shortage of housing for its local population - this is a normal symptom of increasing success for an offshore jurisdiction. The success of the island's offshore financial services sector, together with a flow of wealthy individuals seeking relief from high EU taxes, is quickly driving house prices higher.
Local 'Manx' inhabitants form a high (although declining) proportion of the total population of over 80,000, and by no means do they all benefit from the increasing wealth of the 'offshore' economy. Faced with the prospect of its indigenous population becoming paupers in a land of wealth, the Manx government will eventually have to follow other such jurisdictions in controlling rents and sale prices, or in limiting access to housing for foreigners.
The Royal Assent was granted to the Residence Act on the 20th March, 2001. The Act is perceived by the government as a piece of contingency planning: legislation to be kept in reserve and activated only in circumstances of necessity in response to a seriously deteriorating economic or social situation requiring government intervention. It was, and remains, the government's hope that it will not prove necessary to activate the legislation and that any future growth in population can be absorbed and will not create the circumstances which would warrant activating the Residence Act.
After EU enlargement was agreed in early 2003, pressure increased on the island for residency controls to be boosted.
Speaking during a debate on the European Communities (Amendment ) Bill - which updates existing Manx laws to include the 2001 Nice Treaty - Labour member Peter Karran suggested that: "With this piece of legislation there will be even more need as far as residency control (in the Island) is concerned."
This viewpoint was supported by then Chief Minister, Richard Corkhill, who announced that: "We are part of the UK immigration law."
He went on to add: "The work permit control legislation is most likely to be our saviour. We must pay due regard to the legislation we already have."
In December 2008, the Department of Trade and Industry released a consultation document intended to precede new Regulations aimed at modernising aspects of existing work permit legislation.
The Department issues around 10,000 work permits each year, playing a vital role in ensuring employers are able to secure the suitably skilled workers they require. This in turn has assisted the economy to continue to grow at over 6% a year while the population has grown by less than 1%. The review was intended to ensure that the legislation, the protection afforded to Isle of Man workers and the needs of the economy are in alignment to the greatest degree possible.
Legislation to make immigration controls more lenient was approved on December 16 under the Control of Employment (Exemptions) Order 2009, and came into effect in the Isle of Man on January 1, 2010.
The new legislation exempts certain employments, the great majority of a temporary or intermittent nature, from the requirement for a work permit. The Order is designed to make the island an easier place to do business by reducing the administrative burden upon employers while at the same time protecting the essential interests of Isle of Man workers.
One of the main changes increases the general exemption period where a permit is not required from three days to ten working days a year. With a very small number of exceptions – construction, mobile caterers and temporary retailers – this general exemption applies across the board.
There is a longer exemption period for certain higher level employees of international companies. This is in recognition of the fact that such companies need to be able to move staff between jurisdictions; the exemption period is a maximum of 48 days per year in this case. The exemption does not cover all employments, and is subject to certain conditions.
A further exemption category covers persons relocating businesses to the island or establishing a branch or subsidiary of a non-IoM business.
In total, 13 types of temporary and intermittent employments are exempted, along with three categories of permanent employment.
Minister for Trade and Industry, David Cretney MHK explained that:
“The Department listened very carefully to consultees and worked hard to produce a balanced package of measures aimed at increasing the attractiveness of the Isle of Man for employers – and hence overall employment opportunities – without diminishing protection for Isle of Man workers.”
Work Permit Changes for Non-EEA Nationals
In June 2010, the Isle of Man government announced major changes to rules surrounding work permits for nationals from outside the European Economic Area (EEA), or from Switzerland.
Following proposals approved by Tynwald (the IoM parliament) in April 2009, the Isle of Man has introduced its own Manx Points Based System (PBS) for migrant workers and students. This is in line with legislation which is in place in the United Kingdom.
Explaining the new system, the government said:
“The Points Based System will not apply to applications for work permits for people from within the EEA or Switzerland and these will continue to be dealt with under the Control of Employment Act.”
“The changes will only impact on employers who require skilled workers to fill roles where nobody suitable in the Isle of Man or in the EEA can be found. Previously these employers would have used the Overseas Labour Scheme (OLS) but in future they will use Tier 2 of the Manx PBS. Working closely with the Immigration Service of the Chief Secretary’s Office, the Department of Economic Development will be responsible for administering Tiers 2 and 5 of the PBS.”
“The new system emphasizes the responsibility of employers, who will be required to register as sponsors with the Department and demonstrate that they meet certain criteria. Licensed sponsors will also need to advise the Department of the likely number of certificates of sponsorship they will need in each year and will be responsible for ensuring that the potential worker satisfies all necessary criteria prior to issuing the certificate.”
“The prospective skilled worker must achieve sufficient points to be eligible for a Certificate of Sponsorship and in order to obtain the necessary visa, or leave to remain if they are already in the Isle of Man in another capacity. Points are awarded for evidence of a lack of suitable local skilled workers, qualifications and the prospective earnings of the worker. In addition migrants must also meet points-based criteria for having sufficient funds available to them and a proficiency in English language.”
Commenting on the new system, Geoff Corkish, Political Member for the Employment and Skills Group, said:
“The introduction of the additional tiers of the Points-Based System will help to safeguard jobs and businesses in the Isle of Man by making sure that only those migrants that the economy really needs can come from outside of the EEA or Switzerland. The PBS reaffirms the position that the IoM immigration system for skilled workers is at least as robust as the system in the UK, and therefore protects the reputation of Manx employers. This is not all new. Responsible employers already have strong personnel systems in place and as such already meet many of the requirements to become a sponsor. This demonstrates the government’s commitment to ensuring that employers and migrants conform with employment law and immigration legislation and ultimately it is about shielding and guarding the Isle of Man for the best reasons.”
Applications for the Overseas Labour Scheme closed on July 9, 2010. From this date all renewals and new applications need to be made through the PBS. However, employers are reminded that renewal applications can be submitted up to 28 days in advance of expiry.