Castletown

Castletown served as the Isle of Man's capital until 1869, preserving medieval and Georgian character that the Douglas commercial development superseded. This historical capital demonstrates how geographic advantage shifts: Castletown's southern harbor position mattered for sailing-era trade but became peripheral as steam shipping favored Douglas's east coast accessibility. Today Castletown functions as heritage tourism destination and residential community within an island economy dominated by financial services, insurance, and online gambling. The Isle of Man's Aa3 credit rating (matching the UK) reflects fiscal discipline; Moody's projects 3% GDP growth in both 2025 and 2026. Yet this prosperity concentrates in Douglas and the east coast office zones where banks handling £40 billion in deposits and processing £80 billion in annual payments operate. Castletown's economy exists in the shadow of these dominant sectors—benefiting from island-wide prosperity without hosting the employment concentrations. The town's Castle Rushen and Nautical Museum attract visitors, but Isle of Man tourism represents a fraction of the financial services value. Insurance and online gambling each generate 17% of Gross National Income; banking contributes 9%. Castletown's position illustrates how small island economies evolve: former capitals become heritage districts while capital flows to wherever regulatory arbitrage and infrastructure investment concentrate. The 2024/25 introduction of 15% corporate tax (OECD Pillar 2 compliance) affects companies in Douglas, not Castletown's shops.