Finding The Stairway
to E-Commerce Heaven
by Andrea Wilson
When it comes to business simplification, where else in the world can you incorporate your business online, establish your banking relationships and early stage financing electronically, liaise with technology providers and web developers remotely, get connected to leading-edge international, multicurrency payment solutions providers and launch your e-business, all while sitting at home with your laptop? Many of the offshore jurisdictions in the Caribbean, including Anguilla, Bermuda, Barbados, Bahamas, Belize, Cayman, St. Lucia and the Netherlands Antilles have a full suite of electronic commerce solutions, advanced telecommunications services and e-banking systems ready and available for North American-based businesses to domicile their e-business in the Region. This, combined with recent e-commerce legislation and duty-free zones available in many of the countries, makes the Caribbean Region an extremely attractive place to start or re-locate a business.
How can moving my business offshore be legal?
This is a common question. If the appropriate corporate structures are in place, then an offshore e-commerce business can be set up with relative ease. In some countries the local government has established an online registration site to attract businesses and revenues directly to their jurisdiction. An example of this is in Anguilla where the government has established Anguilla's Commercial Online Registration Network or ACORN service (http://www.anguillafsc.com).
Why should I domicile my e-business offshore?
E-commerce businesses are the first generation of virtual or electronic companies that can really domicile their businesses "anywhere" in the world. A company is no longer restricted to start business in its home country as it has the flexibility to choose a jurisdiction that meets its corporate and tax objectives. This provides a greater opportunity to work with leading edge technology and payment solutions providers and with banks offering Internet banking services. Fifteen years ago businesses were required to have a physical or "brick and mortar" presence in these jurisdictions in order to take advantage of existing tax treaties with their home jurisdiction. In the Internet age, servers have replaced physical offices, legal and tax information is freely available through online resources and, thanks to new e-commerce legislation governing digital contracts and signatures in places like Bermuda, Barbados, Curacao, Cayman and the British Virgin Islands, corporations can be formed over the web in days instead of weeks.
What are the benefits of domiciling offshore?
Well, there are many, but let's start with the basic one � tax. Clearly, careful tax planning is essential to ensure businesses are getting the biggest bang for their buck! Tax dollars saved means more dollars for marketing and growing the business. Tax neutral countries offer corporate tax, capital gains exemptions and sales tax exemptions (among others) to international businesses with a presence there. This is all legal and available for Internet businesses to leverage.
Duty Free Zones
Places such as Curacao, Belize and St. Lucia offer tax and duty exemptions to corporate entities established within the zone. Many of the free zones provide an infrastructure that includes exemption from income, withholding, sales, dividend and capital gains taxes. DataPro (www.datapro.bz) of Belize has recently introduced a full end-to-end solution in the duty free zone located near the Belize International Airport in conjunction with Provident Bank & Trust Company (www.providentbelize.com).
Multicurrency and Multilingual E-commerce Solutions
"To effectively compete, US companies need truly global web sites available in multiple languages and able to handle international sales transactions involving local laws and currencies " states Lori Enos, feature writer for the E-commerce Times in an article entitled "English Only, a Mistake for US Sites." There are a few low-cost entry e-commerce solutions available to international businesses domiciled in the Caribbean that offer multicurrency and multilingual services in addition to secure hosting and site management. MegaNet Internet in Georgetown, Grand Cayman (www.meganetinternet.com), is a prime example. MegaNet's pricing includes a full end-to-end e-commerce solution, including easy to use store-builder software, domain name registration services, web site marketing and a secure, multicurrency payment solution starting at about $70 US per month. Bermuda-based First Atlantic Commerce Ltd and Australian-based software company 3D3.com, have introduced a full multicurrency and multilingual shopping cart solution which can be hosted at any ISP, providing retailers the ability to branch into the offshore marketplace at a very low entry price. Cost of the product is $299 USD.
Offshore Banking Services
The Caribbean Region is home to many of the world's leading financial institutions. The majority of banks in the LACR provide multicurrency solutions and online banking services to their e-business clients. Risk management and "know your customer" regulations are the governance of the business relationships with these clients and they stick to these policies.
Likely the most underestimated benefit of locating offshore. The Caribbean market offers a world of simplification from establishing single multicurrency merchant accounts, to incorporating online, hosting with complete end-to-end technology providers, operating accounts through Internet banking and offering merchants the ability to domicile in a tax free environment.
What's the benefit to an ISO?
ISO's are the front line to many e-commerce merchants looking for a banking solution. Until recently international merchants reached into the US market to establish their e-commerce solution and either established a US presence or worked with a local agency under a master merchant arrangement at high discount rates. ISO's now have the opportunity to market complete international solutions to the mid to large size merchants who meet a certain profile or criteria, allowing ISOs to expand their range of services and grow their portfolios.
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