By James Wilson, Financial Times
Published: Nov 13, 2007

The Isle of Man's shipping and aircraft registries are niches that will become increasingly important to its economic growth in the next few years.

This is not so much because of the relatively small sums generated from the government-owned registries themselves - indeed they are run at break-even or at a slight loss.

But there is strong worldwide growth in the numbers of people using private aircraft or luxury yachts, and these are the sorts of wealthy people that the island is keen to draw into its orbit.

Registering a yacht or an aircraft on the island can therefore be the first step in spinning a web of associated business for lawyers, corporate service providers, bankers and others, which supply financing and insurance, set up company structures, offer tax and legal advice and process crew salaries and pensions.

"It offers people such as ourselves the opportunity to sell our abilities and services," says Andrew Ashworth, managing director of Abacus, a trust and financial sevices company, who says the registers are good demonstrations of the island's ability to innovate.

The shipping register has existed since the mid-1980s and now has almost 400 ships under the Manx flag, from companies including BP, Maersk and Döhle. Standards are acknowledged internationally as high and the island also says it succeeds by offering a responsive service. "Key decision-makers are always available," says Dick Welsh, the director of the registry.

Jörg Vanselow, chief executive of Döhle (IOM), with 120 staff on the island, agrees. He says: "The guys here are very professional. There are other flags that are not performing. Here, we know where we can reach people. That 24/7 access is important."

Mr Welsh estimates that 500 people on the island are directly and indirectly employed in shipping.

The most dynamic part of the register recently has been for "superyachts" - the luxury vessels more than 25m long that are the toys of choice for the world's wealthy.

A superyacht register was set up in 2003 and now has 55 vessels, with a further 24 to be registered and now under construction in boatyards. This is a field where the Isle of Man is competing with other "red ensign" jurisdictions such as the Cayman Islands - still by far the biggest registry - the British Virgin Islands and Bermuda.

The presence of so many tax and corporate advisers meant that some business linked to these big yachts already came to the island before the register was created.

But the register has helped business grow and has persuaded more Manx corporate service providers as well as more mainstream marine companies to venture into yacht management.

Döhle, one of the world's biggest shipowners, started to build a superyacht business four years ago and now has 30 clients, with yachts up to 120m long, according to Robert Tobin, the company's general manager for private marine clients.

"It is not just about tax - we are not tax advisers," Mr Tobin says. "We are winning business through technical competence and reputation."

Mr Tobin, who is also vice-chairman of the Isle of Man Yacht Forum, points out that the island's breadth of expertise in the yacht business now extends to fields such as furniture design, naval architecture, website hosting and IT support for vessels.

"It is great to see how varied the industry is on the island," he says.

The success of the super-yacht register undoubtedly helped the Isle of Man decide to start an aircraft register, which was launched in May.

After all, many of the world's wealthy need both a boat and a helicopter or jet.

Demand for private jets has been rising quickly for years, as travel by commercial aircraft becomes more time-consuming and security concerns grow. Within six months the register has attracted 20 private jets and helicopters, according to Brian Johnson, its director, who worked for the UK's Civil Aviation Authority for 12 years.

"We thought we might get 10 in the first year," says Mr Johnson. "We have started this at exactly the right time and our competitors are all on the other side of the world."

He also points out that the Isle of Man offers a more politically neutral identification for an aircraft than the UK or US registers, as well as no insurance premium tax compared with 5 per cent in the UK.

The Isle of Man was lucky to be able to obtain an easily memorable "M" prefix for its new registrations - which combines well with the four other letters of an aircraft registration to offer some attractive choices of personal registrations.

M-ELON was the first registration made, to Jim Mellon, a financier and island resident. Trevor Hemmings, another island resident who made a substantial fortune in pub and leisure assets in the UK, has recently registered three aircraft including M-AGIC and M-ONTY.

Mr Johnson says that owners are having "great fun" but cautions: "We are trying not to turn it into the back page of Autocar."

Shipping and aircraft industries on the island are also being encouraged by provisions written into tax information exchange agreeements with such countries as the Netherlands and the Nordic countries

back