Up first: Why are small countries becoming interesting for space startups?
When thinking about startups, the first thing that comes to mind is Silicon Valley. However, there are many places that are appealing for space startups including the Isle of Man.
Although, the Isle of Man is a remote and sparsely populated place, it has become compelling for space startups. Startups have begun to incorporate there because of its unique legal and economic framework which has attracted many successful companies such as SES, Telesat, Inmarsat, and Manx Precision Optics to mention a few.
The British Isle of Man is actively promoting its corporate environment to attract space startups to the island, perhaps your company can take advantage of this initiative.
Let’s discuss some of the general advantages.
Martyn Perkins, a member of the Department of Economic Development, has listed several advantages of starting a company in Isle of Man:
- Negotiable and approachable government;
- Neutral time zone;
- Has its own legal system favouring startups; and
- Has its own tax system: 0% corporate tax, no withholding tax, no capital tax, no inheritance tax. (more info here)
What are some of the space specific advantages?
During a presentation at the International Space University Space Studies Program, Tim Craine and Heather Gordon highlighted the following advantages specific to the space sector:
- There is no insurance premium tax on insurance policies taken out in the Isle of Man for satellites.
- The ability to file for a geostationary orbital slot quickly and efficiently and to a high standard through Ofcom to the International Telecommunications Union (ITU).
- Access to UK launch licences through the UK Space Agency.
- Legal and accountancy expertise in satellite matters and space aware and supportive Government.
- Since Isle of Man is part of the UK it is considered British for US Export Control & ITAR (International Traffic in Arms Regulations) purposes.
As we have discussed in our handbook and as discussed by Christopher Stott (here), jurisdiction is very important for startups since it does not matter where your assets are physically located in space; they are still legally and financially tied to their jurisdiction of registration. In addition to be space friendly, Isle of Man has many startup grant schemes ranging from micro to enterprise business startup (GBP5000 to GBP50000 respectively).
The largest drawback is the geographical location:
- Isolated position in the channel makes the supplies costly and difficult, especially considering larger assembly space systems.
- There is a small workforce, your company would have to import high skilled workers.
- Retention of talented employees is difficult, especially after investing in their training and education.
John Dunn, one of the cofounders of Techworld, reported in 2016 that the government has been collaborating strongly with industry to establish new ways of recruiting both students and startups. One example is Islexpo which was first established in 2016. Islexpo is a two day event aimed at industry leaders and UK mainlanders to discuss the future prospects of the island’s important sectors such as aerospace and technology. We mentioned one of the drawbacks above being that there is a lack of highly skilled workers, but that is expected to change too!
Recently in collaboration with University of Chester and University College Isle of Man, an initiative has been established where prospective students earn degrees in Information Communication and Technology (ICT) and other STEM related fields on the Island (which in the past the island had a shortage). What makes this different and why would students come here? Well according to David Butterworth, executive director at the Manx Educational Foundation, the plan is to place students twice a week in one of the local companies for work experience. By the end of their three year computing degree, they have work experience in addition to the degree, which is a rare skill for a fresh graduate thereby making them attractive recruits.
There are many startups flourishing here, attracted by the fast acting government and the financial and juridical advantages, especially for the space sector. So perhaps it is as they say, Isle of Man. Where you can.
Posted by Shafa Aria