Technically, it is not hard (assuming you have the money). Your biggest hurdle is getting some sort of recognition from other countries. Enough to be able to trade, and enough not to be bombed by some military out there. An island will be a perfect choice as it'll be hard for "refugees", terrorists and militias to slip through your borders.
Your next hurdle is getting a police / army force as police can take over your city if they are not faithful to you. Since you can't protect your island, you'll need some diplomatic deal with a bigger country (USA, France, China, etc...) to pledge for your protection. Gotta pay them somehow for that kind of protection.
Don't be deluded. There are no dictators out there, but representations of the current forces and powers. At some duration in the timeline of this earth, the powers and forces enabled the creation of democratic nations with generous freedoms afforded to its citizens. Of course this would change as these powers and forces shift.
Australia is a de-facto military dictatorship given that it is a resource-export-oriented nation. The forces at the time (being part of the Common Wealth and an ally to the US) has made it a democratic and free country.