The
Internet has yet to have much direct impact
on the conduct of offshore business from
the Cayman Islands, but as with all other
aspects of business activity, no one can
doubt that there will be an impact, that
it will be soon, and that it will be substantial.
In
June, 2002, the Cayman Islands Bankers'
Association presented a report on e-commerce
development to the government's E-Business
Advisory Board.
The
Board requested the report in order to
gain a better understanding of the role
of e-business for the banking sector in
particular and business in general, and
the CIBA has welcomed the opportunity
to be able to contribute:
The
report featured feedback from banking
professionals from various banks located
in the jurisdiction, including the Cayman
National Bank, the Bank of Butterfield,
and Bank Austria. International consulting
firm Deloitte and Touche also contributed.
Also
that month, and after a long-drawn out
birth process, the Cayman Islands Information
and Communications Technology Authority
(ICTA) finally came into existence.
ICTA
is responsible for regulating all ICT
networks and services, including telephony,
broadcasting, radio and e-business, and
was established under the Information
and Communications Technology Law 2002.
"The
enactment of the ICTA Law and the establishment
of the authority are the culmination of
a lot of hard work by many people in the
public and private sectors," said
Managing Director Dave Archbold.
Minister
for Planning, Communications, Works and
Information Technology, Linford A. Pierson,
who was responsible for the passage of
the Law, said: "The creation of the
ICT Law and the authority is a significant
step forward for the development of e-business
and telecommunications in the Cayman Islands.
It will be a great asset to have all information
and communications technologies regulated
under the same law and by the same body."
In
May, 2005, Cable & Wireless launched
a VoIP broadband telephony service in
the Cayman Islands, branded 'NetSpeak',
based on Net2Phone’s managed and
hosted IP platform.
The
new service enables residential customers
with high speed internet access to make
unlimited international calls at a low
monthly rate using their home internet
connection instead of the traditional
fixed line network. The NetSpeak service
includes pricing plans for unlimited calling
to the United States, Canada and Western
Europe fixed lines. Friends and family
of NetSpeak users can call using a variety
of local and international phone numbers
available in the Cayman Islands, the United
States, Britain and Canada. The basic
plan includes standard features such as
call waiting, caller ID, call forwarding,
and voice mail with new Web-based account
and feature management tools.
NetSpeak
customers will be provided with a NetSpeak
terminal adaptor that connects to their
modem and a telephone handset. The device
converts telephone calls into packets
of digital data that can be carried over
the Internet.
NetSpeak
was the second VoIP-based product that
Cable and Wireless (Cayman Islands) Ltd.
has launched in conjunction with Net2Phone,
whose fully-managed, hosted platform enables
value-added retail products with low-cost
options for local and long distance calling.
"As
the leading communications provider in
the Cayman Islands, Cable & Wireless
is excited to break ground with our offering
of high quality broadband telephony service
throughout the country," said Timothy
Adam, Chief Executive of Cable & Wireless
Cayman Islands. "With the launch
of NetSpeak, our customers can now access
a low cost, high-quality phone service
with the versatile features and functionality
that VoIP offers."
"At
Net2Phone we are increasingly seeing local
operators use VoIP to grow revenue and
offer new services," said Jonathan
Reich, Chief Executive Officer of Net2Phone
Global Services. "Cable & Wireless'
rollout of digital telephony with Net2Phone
showcases our value as a provider who
can accelerate operators' time to market
with robust solutions."
Net2Phone,
Inc. and Cable & Wireless Cayman,
Ltd. agreed in June, 2004 to offer retail
VoIP services powered by Net2Phone in
Cayman. Under the three-year agreement,
Net2Phone empowers Cable & Wireless
of Cayman with the capability to offer
a full suite of VoIP services. "Our
agreement with Cable & Wireless of
Cayman demonstrates the value that Tier
1 telecom operators see in using Net2Phone
to help support their VoIP solutions.
Our ability to seamlessly integrate into
their existing systems and infrastructure
is one of Net2Phone's significant competitive
advantages," said Jonathan Reich,
CEO of Net2Phone Global Services. "As
the fourth Caribbean operator to sign
an agreement with us, this is one more
step in our strategy to enable service
providers with retail VoIP services in
the region."
In
July, 2005, London-based Foreign Direct
Investment (fDi) magazine, a Financial
Times publication, recognized the Cayman
Islands as the Caribbean state with the
best IT and Telecommunications infrastructure.
For
the 2005/06 Caribbean States of the Future
awards, the Cayman Islands was also the
runner-up in the following categories:
Best Human Resources, Best FDI Promotion
Strategy, and Best Transport System.
Among
that year’s competitors were Montserrat,
Jamaica, Bermuda and Trinidad & Tobago,
as well as others from Central America.
“Recognition
in these categories demonstrates a strong
commitment to maintaining a successful
economy in today’s competitive market,”
commented Charles Clifford, Minister for
Investment and Commerce.
“All
persons in Cayman should feel proud that
we are considered the best in these areas
amongst our regional colleagues. Earning
these awards makes us even more marketable
to foreign investors and should encourage
us to push the envelope further than ever,"
he added.
In
June 2005, fDi invited Caribbean and Central
American investment promotion agencies
to nominate their countries for recognition
as an attractive locale for foreign direct
investment (FDI). The Cayman Islands Investment
Bureau submitted the Cayman Islands nomination.
In
August, 2006, Savvis Inc., a global provider
of IT infrastructure services for business
applications, entered into a comprehensive
distribution agreement effectively giving
TeleBermuda and TeleCayman exclusive rights
to offer select Savvis services in Bermuda
and the Cayman Islands.
Under
the terms of the agreement, TeleBermuda
and TeleCayman, leading international
telecommunications carriers in Bermuda
and the Cayman Islands respectively, leverages
Savvis's industry-leading global private
financial network to develop and market
products and services to clients, primarily
in banking and finance, insurance and
reinsurance, and hedge fund industries.
As
part of the agreement, Savvis's global
private network infrastructure connects
directly to TeleBermuda’s and TeleCayman’s
Network Operation Centers in Bermuda and
the Cayman Islands. Savvis says that this
will complement the voice, private lines,
dedicated Internet, DSL and hosted business
continuity products and services that
are already offered by TeleBermuda and
TeleCayman.
The
agreement also enables thousands of customers
already connected to Savvis’s Financial
Extranet to access Bermuda and the Cayman
Islands’ lucrative financial markets
to submit a variety of trade-related messages,
including indications of interest, order
routing, and trade executions, and carry
out other Financial Information eXchange
(FIX) and non-FIX transactions.
Bermuda
and the Cayman Islands have emerged as
jurisdictions that specialize in insurance,
re-insurance, banking and hedge funds,
and the partnership caters specifically
to these industries with innovative products
and services.
Savvis's
global financial extranet provides application
connectivity to all the major exchanges,
market data feeds, and the ability to
connect to over 4,700 financial community
end-points. These represent buy and sell-side
institutions, market data and software
vendors, exchanges and alternative trading
venues around the world. The company's
IT infrastructure extends to 45 countries
and includes 25 data centers in the United
States, Europe, and Asia with more than
21,000 fully-managed network end points.
“Savvis
brings a heritage of innovation and proven
managed IT services for financial markets,”
stated Raul Nicholson-Coe, President and
Chief Operating Officer for TeleCayman.
“Savvis's’
ultra low latency financial extranet and
global hosting services opens a myriad
of IT solutions and opportunities for
our customers," he added.
“Any
institution connected to TeleBermuda and
TeleCayman will now be able to access
one of the world’s leading global
financial networks through a single managed
connection, eliminating the need to manage
multiple providers,” noted Gregory
Swan, Executive Vice President and Chief
Operating Officer for TeleBermuda.
“SAVVIS
enhances TeleBermuda’s and TeleCayman’s
breadth of services, opens new business
opportunities in the marketplace, and
strengthens our position for future growth,"
he concluded.
In
October 2007, Digicel, the Caribbean's
largest telecommunications provider, announced
that it was rolling out its next generation
of personal broadband services in the
Cayman Islands.
Digicel's
Personal Broadband service employs standard
based mobile WiMAX 802.16e technology,
allowing users the freedom to connect
anywhere they like.
With
the launch of Digicel Broadband, the company
is the first telecommunications provider
in the Cayman Islands to offer next-generation
Mobile WiMAX based on 802.16e technology.
Digicel first made its foray into the
market by offering fixed Wireless Broadband
Voice, Data and Internet services to corporate
customers in the Cayman Islands in December
2005, and in the Jamaican market in July
2006.
Digicel
said that it has leapfrogged the mainstream
broadband space by introducing a service
that combines the speeds of a landline
offering with the convenience of wireless
connectivity. Customers can move their
modem to any location within Digicel's
service area across the island and access
the Internet at no extra charge. Digicel
Broadband packages range in speed from
512kbps up to 4 mbps.
Cayman
Islands Offshore Activities
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
business 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 tens
of thousands of offshore enterprises already
installed, including many investment funds
and banks, it is only a matter of time
before Cayman becomes a centre of e-commerce
activity. The island's geographical location,
its good telecommunications links and
its sophisticated business infrastructure
add to the inevitability of an e-future
for the Cayman Islands.
By
locating websites in Cayman 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.
In
many countries, the distribution of goods
from a warehousing facility does not constitute
the carrying on of a trade or business
in that jurisdiction, so that even for
physical goods, in many case it will be
possible to avoid a permanent establishment
(taxable presence) altogether in many
high-tax jurisdictions where trading activities
currently take place.
For
information about the impact of e-commerce
on a number of the main offshore activities
which take place on Cayman, click on a
link below to go to our specialist E-commerce
site Offshore-e-com.com
Sales and Distribution of Physical Products
Sales
and Distribution of Digital Products
Banking
and Financial Services (including Investment
Funds)
Corporate
Support Functions
To
see an analysis of the current state of
legal and tax issues surrounding offshore
e-commerce, click
here.
BACK
TO TOP
Cayman Islands Case
Studies
This section will contain case studies
of e-commerce solutions applied to offshore
business activities carried out from the
Cayman Islands. The case studies will
be developed in association with 
partners. Contact
us to learn more.
BACK
TO TOP
