On
this Page:
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VANUATU INTRODUCTION
- VANUATU
OFFSHORE ACTIVITIES
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VANUATU
E-COMMERCE LEGISLATION
- VANUATU
CASE STUDIES
Vanuatu
Introduction
The Internet has yet to have much direct impact
on the conduct of offshore business from Vanuatu,
although the jurisdiction's thriving Internet
gaming business has encouraged the development
of an Internet service sector which supports multi-currency
credit card payment processing.
The
government introduced an Electronic Transactions
Act and an E-Business Act in 2000.
On
March 17, 2003, The Government of Vanuatu announced
amendments to its Interactive Gaming legislation,
to offer a more competitive licensing regime for
online sportsbooks and betting exchanges.
Effective
on that date, Asia Pacific Totalisators Ltd. received
the first Limited (Sports Book) Interactive Gaming
License, for a period of 15 years. The amendments
gave effect to the introduction of a new licensing
fee structure for firms, restricting the scope
of their operations to Event Wagering - Fixed
odds, and/or P2P (Betting Exchange), and/or Parimutuel.
Vanuatu
E-Commerce Legislation
The
Electronic Transactions Act, 2000, sets out the
rules for making a legal contract using digital
records. The government says it has followed the
extensive work done by the Commonwealth of Bermuda.
The Act deals with electronic contracts, digital
signatures, electronic records, certification,
the legal status of electronic records, data protection,
the status of intermediaries, and a requirement
for a Code of Conduct for intermediaries.
The
E-Business Act establishes an Internet Free Trade
Zone where businesses can conduct legitimate trading
activities over the Internet and take advantage
of Vanuatu’s low tax structure. The Act
allows foreign people or companies to set up a
Vanuatu based web site and conduct business from
that web site without setting up an International
Corporation with directors, shareholders, and
registered office. Instead, the Act creates an
Internet Free Trade Zone with virtual office spaces
called Cybersuites. The Cybersuites come with
a range of services, including design and maintenance
of the web sites, and handling financial transactions
on behalf of the people who rent the Cybersuites,
who are called Cybersuite Proprietors.
There
are, therefore, two central aspects to the Act.
It enables a Vanuatu International Company to
set up Cybersuites and rent these. Secondly, it
provides the legal basis for Cybersuite Proprietors
to conduct business over the Internet.
Part
1 of the Act gives definitions of the terms used
in the Act. The key players defined include an
International Vanuatu company that provides Cybersuites
for cybersuite proprietors. The Cybersuite is
an Internet site located on a computer or on computers.
Its assets are held in an account managed by a
contractual arrangement between the Vanuatu International
Corporation and the Cybersuite proprietor.
Clause
2 clarifies the legal status of a cybersuite and
says that it is treated as a separate legal entity
from the Vanuatu International Corporation that
is hosting it. Cybersuites can make legally binding
contracts just as a corporation can.
Clause
3 clarifies the nature of the contract between
the company and the cybersuite proprietor.
Clause 4. The parent Vanuatu International company
is given the ability to conduct electronic business
activities and may contract with any person to
set up a Cybersuite.
Clause
5. says that if a Cybersuite proprietor is not
a resident of Vanuatu they do not have to be licensed
under other Vanuatu laws to carry on their web
site activities. If the Cybersuite proprietor
is a resident of Vanuatu or a local company their
web site activities are subject to the normal
laws and regulations of any local enterprise.
Clauses
6 and 7 state that electronic contracts made by
the company or the Cybersuite proprietor are legal
and are taken to be formed in Vanuatu.
As
a consequence of the new Acts, the International
Companies Act and the Companies Act were amended
to include mention of doing business over the
Internet.
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Vanuatu
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 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
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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Vanuatu
Case Studies
This section will contain case studies of e-commerce
solutions applied to offshore business activities
carried out from Vanuatu. The case studies will
be developed in association with 
partners. Contact us
to learn more.
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