| The Internet how to maximise profits
and reduce tax
Setting
up a website and structuring an offshore Internet business
The Internet
- in it's present form - barely 10 years old has completely altered the
face of business, opening up huge potential to those keen to take advantage of
the massive profits to be made. Many of our clients have realised that where only
a few years ago they were so blinkered they concentrated solely on their home
market they now have access to a market vastly greater. An example of this is
in the UK where we have encouraged our UK clients to expand their operations to
North America which offers access to over 300 million potential
buyers. Numerous routes exist to achieve this ranging from a website to using
eBay which earns many of our clients £1000 / $1750 / €1450 and
more per week with minimal effort. We have one Scottish client selling ceramic
pots and jugs he buys at car boot sales and flea markets for pennies earning on
average around £1500 per week by reselling them on eBay in the UK, US, Canada
and Australia.
The key to the Internet, be it on eBay or a purpose built
website, is that it offers your customers, anywhere in the world, the chance to
shop 24 hours a day. Combine this with the advances in communications, meaning
US clients can call Europe on a local US number at a cost of only 6c a minute
and things become very exciting, for Americans wishing to sell in the UK things
are even better because we can setup a standard UK number routing to the US and
you pay nothing to receive the calls!
The opportunities are enormous.
Our expertise lies in building the corporate structure and setting up merchant
accounts, banking, websites and communications in order to maximise the results
you will achieve. We know this area inside out. Why? Because we operate this way
ourselves and have several bases from which our business can operate. In the event
our Berlin office is closed we can immediately transfer day to day operations
to the Marbella office by rerouting the phone lines, to clients the switch is
barely discernible because virtually all he systems function exactly the same,
UK clients will still call us on a UK number and US clients can call our number
in Seattle, which depending on the time of day could either be answered by the
US agent or ourselves. Maybe this sounds slightly complex but always remember
the key to success in offshore markets lies in making it easy for the buyers,
it goes without saying that response will inevitably be greater improved if buyers
- who have little experience of phoning abroad - can call a familiar number
instead of some obscure number in another country where they have no idea what
it will cost to dial it, what the country code is or even if they need to remove
the first zero. Examples of this are Spain where the numbers do not start with
a zero, a typical number would 678-344-374 so this looks quite familiar
to Americans but rather odd to Germans and Brits who expect a number to appear
in the following format 020-7900-3161 or 01202-451-6966. Whatever
your numbering requirements our communications section offers numerous solution
in various countries.
For further details of communications solutions
click here to go to our communication section
As we saw earlier, the vital ingredient in operating an offshore website
lies in accepting credit card payments. The robust and sophisticated technology
of the international network of banks and bank card associations simplifies transactions
for both seller and buyer. For retailers, handling billing and collections through
credit cards is cost effective, reliable and fast. Processing credit card transactions
through an offshore bank has distinct advantages. Privacy if information and protection
from currency fluctuations are often so important to retail clients. When the
Visa or MasterCard systems recognises the transaction has taken place in an offshore
jurisdiction, it permits settlement locally, so the retailer can take advantage
of the benefits of confidentiality, security and tax efficient status. back
to top What
is E-Commerce?
It is now possible to access almost all the
information we need electronically through our computer or telephone. Every day
this volume of information is accessible via the Internet increases in leaps and
bounds. Today the Internet is really only at the equivalent stage as aircraft
design in the late 1920's as with early aviation development it is moving forward
at an increasingly fast pace.
The development of mobile phones with
Internet connectivity, SMS and MMS messaging as well as credit card authorization
using SMS in many countries is an area that has advanced in greatly in the last
few years, this all plays a major role in enabling clients to operate their business
from virtually anywhere.
There are two main forms of online business:
E-commerce - doing business electronically (usually involving a financial
transaction and a physical product), and electronic service delivery, such
as music or software. Home computers and telephones are being increasingly used
for obtaining services, be it checking a train time to ordering food from the
supermarket or downloading video clips or music. Back
to top YOUR
OFFSHORE E-COMMERCE TRADING OPERATION
Structuring an offshore
trading operation
No-one likes to pay excessive taxes but add
in the worsening administrative burdens and hassles of running an onshore business
and the considerable attractions of going onshore become all too apparent.
Prior to the Internet there was little that most types of business could
do to escape tax and red tape, although individual owners might be able to go
'offshore' with the proceeds of their work and increasingly did so as the tax
levels rose. Individual tax levels have been reduced to some extent in some countries,
but the taxman has become more efficient and the classical equation of working
onshore and enjoying offshore becomes even harder to sustain.
The Internet
has totally changed the equation and this site attempts to explain why and how
almost all businesses can substantially reduce their tax bills and maximise their
profits by taking advantage of offshore E-Commerce. We will help you decide
what you what you need and outline a package that will achieve your goals. Back
to top ISP
and Hosting Services
If your company is thinking of offshore E-Commerce
then it is highly likely that your Internet site and/or payment processing will
be either set up or routed through an IOFC (International Offshore Financial
Centre).
Sometimes you will find communications costs are higher
than usual in many offshore locations because the local phone company is still
a monopoly (such as Cable and Wireless in many Caribbean jurisdictions),
although there are competing suppliers in some cases.
Internet service
provision is not usually subject to monopoly restrictions, in many jurisdictions,
a number of small local ISPs have sprung up. The choice of ISP or host is an important
part of setting up offshore, since the ISP will be the sole link between your
company and your clients. A number of important points need to be checked:
Good Connectivity -- this means the ISP or host should have stable
connections with a telecoms provider, using high quality equipment with spare
bandwidth available. Ideally, back-up connections via a secondary telecom
provider offer best guarantee of 100% availability for your site. As noted above,
this will be unachievable where there is a monopoly telecommunications provider.
Secure Facilities -- your business data will be stored at some stage
on equipment at an ISP's facilities, if you are using co-location with a hosting
service your own equipment, whether real or virtual, will be vulnerable along
with the data itself. The host ISP premises, equipment and systems must therefore
be secure.
Qualified Personnel -- the equipment and systems
needed to provide ISP and hosting services are complex and require maintenance,
not to mention going development to stay abreast of Internet techniques; the ISP's
staff must have the necessary skills, which may be in short supply in an IOFC.
Scalability -- the expanding nature of E-Commerce means
that your site will probably grow, at least, you hope so. Your ISP or hosting
partner should have room for growth in terms of physical space, equipment capacity
and funding.
Jurisdictions vary from in their suitability as locations
for E-Commerce operations; our country profiles will often assist you. Please
keep in mind that the profile consists of advice as to how to set up an operation
doing it exactly by the book you can usually bend a few rules no one is really
going to worry about and slice 50% off the final set up costs. Back
to top Where
are the leading offshore E-Commerce centres?
This is a good question
as things are moving so fast but basically the locations below in bold are the
current major players, while those below in standard print have a number of useful
facilities and might become major operators in the future. Those marked with *
are the ones we feel have the most potential for future expansion. MAIN
OFFSHORE CURRENT E-COMMERCE CENTRES
·Bermuda
·Channel
Islands (Jersey and Guernsey)
·Gibraltar
·Hong Kong
·Isle of Man
·Andorra
·Aruba
·Bahamas*
·Barbados
·British Virgin Islands
·Cayman Islands*
·Cook Islands
·Cost Rica
·Cyprus*
·Ireland
·Liechtenstein*
·Luxembourg
·Madeira
·Malta
·Mauritius
·Monaco
·Netherlands Antilles
·Panama*
·Seychelles
·Switzerland*
·Turks and Caicos Islands
·Vanuatu HONG
KONG OR SAR (Special Administrative Region)
Hong Kong's currently
fulfills a role of siting between China and the West. This position could be threatened
in coming years as the Internet enables China's other provinces to operate directly
in the global economy, but right now the Internet in Hong Kong is now like a runaway
train! The SAR is trying through the
'Digital 21' policy initiative, citywide broadband implementation, and the new
Cyberport being constructed by Pacific Century CyberWorks to lead Hong Kong into
the digital future. Hong Kong, with its low taxes and its established position
as a trade hub for Asia, is also trying to become a centre of E-Commerce development.
The technical infrastructure for E-Commerce
in Hong Kong is excellent with lots of hosting options - contact us for details
HONG KONG HOSTINGS - it is not
however totally clear if Hong Kong has a business structure that is completely
suited to E-Commerce. Most of Hong Kong's businesses are small family-owned
firms, most of them forming part of business supply chains, although most manufacturing
by now is done elsewhere - often China.
A point to keep in mind is that Hong Kong's tax structure, which taxes local source
income, means that E-Commerce operations in the SAR would need to avoid entering
contracts locally, which in turn might mean that servers would have to be located
elsewhere. This is not ideal because although 16% tax on profits is not that high
it is a lot higher than zero which is possible elsewhere. Having said that for
a business with no Hong Kong connections it is a first class secure and discreet
hosting location with reliable facilities at realistic prices.
Hong Kong has a stated aim of becoming the worlds leader in E-Commerce but
just as in the past with company formation and banking the world is full of countries
who plan to become global E-Commerce leaders.
The UK may have destroyed its chances of becoming a worldwide player with its
'RIP' legislation and its lack of ability to offer decent unified messaging and
certain secure facilities was not helped, but Ireland, Bermuda, Malta and the
Isle of Mann are just four more advanced 'low tax' competitors. Hong
Kong is a stepping stone to the Asian market and sits at a crossroads of the worlds
communication networks - though such advantages are probably more psychological
than practical. In theory at least, cyberspace knows no boundaries and the global
nature of E-Commerce allows it to be conducted anywhere. As our founder says
"All you need is a laptop, a beach, a bit of shade and a GSM phone and
you can be up and running!" This might be a bit of an over simplification
but its not far from the truth, here at ORCA we all share an obsession with beaches
and sunbathing so we know how to make it work! You will never meet a pale ORCA
employee! Click here if you are interested
in HONG KONG HOSTING? ISLE
OF MAN
The Isle of Man's advantages are its relationships with the
UK and the EU, being close to both but part of neither. It has good access to
professionals, business friendly legislation, excellent telecommunications and
a tax free zone. Although some do not like the way the island mixes and matches
in relation to its offshore matters, with a high degree of uncertainty as to where
its loyalties lie, it is nevertheless a good location for hosting and many other
web based services. The nature of
the Internet means the IOM in its established role as an offshore financial centre
is the ideal location for many clients to take advantage of new business opportunities.
Clients can operate freely and exploit numerous tax advantages to a degree which
Ireland - which is just across the sea from the IOM - wishes it could
afford to offer but cannot due to its membership of the EU. In fact it is not
so long ago that Ireland offered Nonresident companies but the EU soon put a stop
to that. Businesses which can operate on the Internet without physical contact
to high tax jurisdictions - this can include consultants, eBayers, drop shippers
and service providers among others - will naturally migrate to offshore jurisdictions;
while businesses that already have offshore existence will find it highly convenient
to be able to use the Internet to trade with their high-tax customers without
having to make route everything through the accountant in their home country.
In most countries the delivery of products from a warehouse does not constitute
the carrying of a trade or business in that jurisdiction, this means even physical
goods. This means you can sell, ship and deliver whilst paying zero tax! All you
need to is an offshore company and the right tax free structure. By locating websites
in the Isle of Mann to carry out functions previously based in high-tax jurisdictions
such as sales and marketing, financial admin, provision of services such as downloads
for programs such as music and video clips, businesses can take advantage of low
rates of taxation for increasingly substantial parts of their operations. In
the IOM we can offer everything from simple hosting to domain registration, IOM
telephone facilities, company formation, secure e-mail and web design services.
Contact us for further details. Back
to top What
is Anonymous Domain Registration?
Anonymous Registration allows you
to shield your personal information from the "Whois" database when registering
a domain while retaining the full benefits of ownership. With private domain registration,
you keep your personal information private This process is new and highly secure.
The way an Anonymous Domain
Registration works:
The "Whois" database is provided with a
nominees contact information, not yours! The nominee becomes the registrant of
any record for any domain name and offers the same type of benefit as with an
offshore company. Best of all, you still retain the full benefits of ownership!
You can cancel, sell, renew or transfer the domain names; setup name servers for
the private domain name; resolve disputes involving the domain name and more.
An Anonymous domain registration will:
·Stop domain-related
spam
·End data mining
·Deter Identity theft
·Prevent
harassers and stalkers
·Protect the domain owners business
·Protect
the domain holders confidentiality
·And much much more Click
here to sign up for Private Domain Registration back
to top | 
