The natural bonding of the Internet and Offshore stems from the fact that both, of their nature, manage to avoid tax. Businesses which can operate on the Internet without, so to speak, touching ground in a high-tax jurisdiction 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 a landing in their countries.
By locating websites in offshore jurisdictions to carry out functions previously based in high-tax jurisdictions such as sales and marketing, treasury management, supply of financial services, and most of all, the supply of digital goods such as music, video, training, software etc, businesses can take advantage of low rates of taxation for increasingly substantial parts of their operation.
As a major 'low-tax' jurisdiction with tens of thousands of enterprises already installed, including many collective investment funds, banks and other financial institutions, Panama certainly has the opportunity to become a centre of e-commerce activity. There are already a number of Internet Service Providers in Panama, and this sector can be expected to grow rapidly. The country's geographical location, its good telecommunications links and its sophisticated business infrastructure add to its suitability as an e-ntrepot.
No one particular sector dominates the growth of e-commerce applications in Panama, which are quite diverse.
Important players like Global Crossing, MCI, Sky Online, new world communication, Cable & Wireless, Nautilus and Telefonica have decided to install Network Operation Centers in Panama, taking advantage of the geographical location providing an abundant supply of submarine fiber optic communications circuit on both coasts and which makes possible interconnection close to North and Latin America, Asia, Europe, Africa and the world over redundant routes
For information about the impact of e-commerce on a number of the main offshore activities which take place in Panama, click on a link below to go to our specialist E-commerce site Offshore-e-com.com
To see an analysis of the current state of legal and tax issues surrounding offshore e-commerce, click here.