Monaco Introduction
The infrastructure for large bandwith which
is a precondition for successful e-commerce
is being developed in Monaco. E-commerce
is an industry of the future and the type
of economic activity that Monaco encourages
being high value and environmentally friendly.
However, given Monaco's tax laws, it will
be important that e-commerce transactions
are deemed to have been executed in Monaco,
otherwise business tax will be levied.
If Monaco's tax laws deem a transaction
to have taken place in the jurisdiction
in which the goods are delivered then
normal business profit tax rates of 33.33%
will apply in the principality with the
consequence that it will not be an attractive
location in which to locate an e-commerce
retailing company.
There are already a number of Internet Service
Providers in Monaco with clear interest
being shown in offshore e-commerce development.
The main monopolistic operator is Monaco
Telecom and one of the major ISPs is Monte-Carlo
Multimedia (Monte Carlo Online). A B2B
trading site based in Monte Carlo likely
to be of interest is PlanetEuro.com.
In October 2007, the Monaco Government and
Monaco Telecom announced that they had
come to an agreement to offer local clients,
particularly companies, a wider and more
attractively priced range of internet
and telecommunications services.
The three year agreement was designed to
enhance Monaco's competitiveness and stimulate
the local economy. EUR4.5 million is to
be invested by the Monaco government under
the agreement.
The Monaco government also said that it would
forge ahead with the implementation of
new communications technologies, and is
planning to develop video on demand and
DSL television by 2008.
See below for specific information on e-commerce
in Monaco, or go to Offshore-e-com.com for an extensive
analysis of the commercial possibilities
and the legal background.
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Monaco 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 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 low-tax jurisdiction with many
thousands of enterprises already installed,
including many trading companies, Monaco
has an opportunity to become a centre
of e-commerce activity. The Principality's
geographical location (European time-zone),
its good telecommunications links and
sophisticated business infrastructure
are factors which will attract the sales,
marketing and administrative departments
of European retail operations.
By locating websites in Monaco 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. However, given Monaco's tax laws, it will
be important that e-commerce transactions
are deemed to have been executed in Monaco,
otherwise business tax will be levied.
If Monaco's tax laws deem the a transaction
to have taken place in the jurisdiction
in which the goods are delivered then
normal business profit tax rates of 35%
will apply in the Principality with the
consequence that it will not be an attractive
location in which to locate an e-commerce
retailing company. See Direct Corporate Taxation.
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 in Monaco, 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.
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Monaco Case Studies
This section will contain case studies of
e-commerce solutions applied to offshore
business activities carried out from Monaco.
The case studies will be developed in
association with ![Lowtax Logo]()
partners. Contact us to learn more.
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