Isle of Man: a natural home for innovation regulated

Isle of Man, a tiny island in the Irish Sea punches above its weight when it comes to global finance. The Isle of Man is a Crown dependency, with its own parliament, Tynwald. It’s the oldest continuously running legislature in the entire world. It combines political stability with an AA credit score and zero national debt, with a legal system that institutions trust.

Its status makes it unique: not part of the United Kingdom yet sharing a customs, VAT and exchange rate agreement. The native currency is also pegged to sterling at a 1:1 ratio. Corporate tax is zero, capital gains tax is zero, and personal income tax is capped at 20 per cent, with an upper yearly limit of 200,000 pounds per (€232,380). 

This is not just a tax rate that is favorable; it’s a stable environment, backed up by a financial services sector with years of experience. Legal and corporate services on the island are among the best in world. They serve multinational corporations as well as high-net worth individuals.

Face-to face access to decision makers

Isle of Man provides direct access to decision-makers in sectors like blockchain.

The island’s accessibility is one of the main reasons why Echo has its headquarters there. The Isle of Man Financial Services Authority has granted the company a VASP license for custody and exchange. A matching licence is also held in the Czech Republic.

Dorrer stated that they were planning to apply for a brokerage license. “Someone to do the whole flow.” There are people who do bits and pieces, but there is no one who does the whole thing.

Echo is not just an exchange. Echo Elite is its flagship high-networth product. It uses a protected-cell company (PCC), a structure that allows clients to have segregated accounts in the Isle of Man (in association JurisTrust, TCSP’s partner).

Keep illicit funds out

Dorrer explains that the structure originated in the insurance sector, but it has been adapted. You can store digital assets in an isolated cell, which is legally and financially separated from other cells. There’s no corporate or capital gains tax. It’s about unifying assets classes, like crypto, stocks, and real estate. They are all tokenised, and they can be held in a single place.

The strategy also includes partnerships. Echo uses Zekret – a Web3 protocol for compliance designed to keep illicit money out of the system. Zekret screens participants and funds before they interact with blockchains, using KYC/KYB checks. Zero-knowledge IDs are issued to maintain confidentiality.

Dorrer noted that Zekret’s approach is in line with the company’s commitment to operating within a clean and regulated environment. “We can now innovate without putting our financial reputation at risk,” Dorrer said.

The island does ‘stuff really, really well’

Dorrer believes that the Isle of Man is unique in its combination of fiscal stability, regulatory openness and legal expertise.

“The island excels at finance and legal work,” he said. If it can nail engineering and tech, we are away. I hope Echo will be a canary in the coal mine, showing what is possible and encouraging more projects to come.”

Isle of Man has both in a field where innovation and credibility are equally important. The Isle of Man is small enough that it can be agile and established enough to trust, but ambitious enough to lead.