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.
As a major offshore jurisdiction with many thousands of offshore enterprises already installed, including many banks, it is only a matter of time before Vanuatu becomes a centre of e-commerce activity. The islands' geographical location, their good telecommunications links and sophisticated business infrastructure add to the inevitability of an e-future for Vanuatu.
By locating websites in Vanuatu 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.
Vanuatu can expect to benefit from Australia's Interactive Gambling Bill which prohibits Australian-based on-line casinos from offering gaming facilities to Australian residents. The Publishing and Broadcasting Ltd. company (PBL), which was owned by the late Australian media tycoon Kerry Packer, has considered Vanuatu as an alternative location for its gaming operation.
Vanuatu is a natural choice for PBL and no doubt for other Australian gaming operations. The island is only four hours by air from Australia and the government imposes a mere 2.5 per cent tax on on-line gaming revenue.
For information about the impact of e-commerce on a number of the main offshore activities which take place in Vanuatu, 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.