Lowtax Network

Back To Top

Your Lowtax Account

Bermuda: E-Commerce

Government E-Commerce Involvements

The Government has directly supported the establishment of e-commerce hosting centres by the two long-distance telecommunication companies which operate on the island, Cable and Wireless, and TeleBermuda International.

However, in 2000 the Bermuda Telecommunications Minister announced a new regime for Internet telephony and broad-band services which seems to favour the local firms: the two major telecoms companies would be permitted to offer Internet services to business (previously they were restricted to offering their services internationally), while the local firms would have access to long-distance networks to offer various types of Internet service, probably including VOIP (Voice Over Internet Protocol).

The Government has also involved itself in the formation of a Bermuda Commercial Digital Certification Authority, which was founded by blue chip international finance and e-commerce company, Quo Vadis Ltd in September 2000. The technology Quo Vadis employs is Public Key Infrastructure (PKI), a solution which addresses the security, authentication, and non-repudiation issues associated with e-commerce. PKI operates through the provision of digital certificates that act as 'digital passports' and uniquely identify the parties to any on-line transaction. Thus offering a secure standard for offshore e-commerce transactions, whether originating in Bermuda or elsewhere. Such an independent certificate authority will further enhance Bermuda's e-commerce edge over other jursdictions.

The Certification Service Providers (Relevant Criteria and Security Guidelines) Regulations 2002 follow the Electronic Transactions Act (ETA) 1999, and deal with the formation of electronic contracts and the validity of digital signatures. The voluntary CSP scheme allows certificate authorities to apply for Government recognition under the ETA.

The government has also created a Bermuda Commercial Digital Certification Authority.

The Telecommunications Ministry makes a charge of BMD10,000 per application for a CSP approval, in order to cover the costs of expert investigation of each applicant.

In 2004, the Bermudian government continued its support for the jurisdiction’s technology capabilities at an international e-commerce seminar in London. Jonathan Koshar, general manager of AT&T Wireless in Bermuda, said: “AT&T Wireless has been able to establish itself and make great progress in a relatively short space of time thanks to the supportive government and business environment in Bermuda.”

“We are among the first three countries in the world to have EDGE data technology, giving the Bermudian business community access to state of the art wireless communications products and services,” noted Mr Koshar.

In September 2004 the Bermudian government aired a television commercial in a bid to boost the number of firms in the jurisdiction electronically filing payroll taxes under the government’s E-Tax Initiative. Since the launch of the E-Tax Initiative in June 2002, Finance Minister Paula Cox reported that a little under 500 firms had opted to pay their payroll taxes online, generating some 1,811 returns and BMD104 million in revenue out of a total payroll revenue of approximately BMD200 million.

Cox said the 30 second long adverts would help spell out the simplicity and overall benefits of the E-Tax system and convince a hitherto sceptical business audience. “Now we’re about to launch, I think you’ll see that, with publicity and also with the advantages being made quite clear, we should see a steady peak and rise,” commented Mrs Cox. “There’s a certain element that are resistant to using computers. We have to demonstrate that it’s easy and will become ‘one-stop shopping’,” she observed.

Following the campaign, there was a significant increase in the number of businesses using the government’s electronic tax filing system. Tax Commissioner Heather Jacobs Matthews reported that the number of firms filing online had risen to 16%, or 884 businesses, up from 9% previously. "If 884 people are filing, that is 884 cheques we don't have to worry about, 884 returns we don't have to file away, 884 receipts we don't have to put into the mail. That is more than a 100% increase of the people who were filing before,” she explained.

In October 2004, certification service provider Quo Vadis announced that it had been retained by the government of Bermuda to provide digital identity services as part of its ongoing e-Government Portal Project. Commenting on the decision, Minister for Telecommunications and E-Commerce, the Hon. Michael Scott stated: “Reflecting the sophistication of the Bermuda marketplace, Government is committed to leveraging the Internet to better serve our users, whether they are local residents seeking to register a vehicle or multinational companies making a regulatory filing.”

He continued: “We have selected Quo Vadis to help provide the identity cornerstone for the next phase of the Portal, ensuring that Government can properly identify users and protect privacy, as well as foster the integrity and accountability of our web services offerings.”

Under the first phase of the e-government project, Bermuda introduced a central portal uniting the informational websites of more than sixty government agencies. Using software from Plumtree, the portal provides a flexible central platform for government’s planned rollout of online transactions.

Under the agreement with Bermuda, Quo Vadis operates a digital certificate authority for the government under the provisions of applicable local laws and regulation. Digital certificates are a form of non-forgeable electronic ID that may be used to identify online users and resources, to create legally binding electronic signatures, and to encrypt data for privacy.

“To ensure its competitiveness as a jurisdiction, Bermuda has consistently been a leader in formulating legislation and updating infrastructure to make e-commerce possible,” observed Roman Brunner, chief executive of the Quo Vadis Group.

“With its rigorous approach to security and identity management in its e-government planning and Portal, the Bermuda Government is reinforcing the island’s reputation for responsibility and trust,” he added.

Promising findings have come from a report which studied the level to which e-commerce in Bermuda has penetrated the business sector and the community at large, which was released by the government on Thursday.

In 2007, the Department of E-Commerce commissioned a local research company to establish a benchmark view of Bermuda residents’ and businesses’ competencies and attitudes towards Information Communications Technology (ICT) over a three-year period.

“Given the important role that technology plays and its increasing socio-economic impact both locally and globally, it is vital that a current and comprehensive assessment of the adoption of ICT in Bermuda is undertaken,” said Terry Lister, Minister of Telecommunications and E-Commerce.

According to the study, published in 2008, the overall adoption rate of telecommunication devices continues to be high. Similar results were shown in the study for 2009.

On the corporate side, nearly all Bermudan companies surveyed have computers. All firms have internet access with a high-speed connection, however T1 lines or greater accounted for just 24%. 58% of employees are considered to be competent or skilled at using computers, up 5% from 2007. Corporate cell phone and mobile device ownership continued to show an increase from 75% in 2007, to 85% in 2008 and 87% in 2009. Companies tended to own more mobile devices in 2009, from 63% in 2008 to 78%.

90% of Bermudan households own a computer, this figure had risen to 93% in 2010. The vast majority (89%) of households access the internet, and similar to the last two year’s results, out of those that have internet access 85% (89% by 2010) have a high speed internet connection (DSL, Cable or wireless). In 2009, 94% of Bermudan households owned a cell phone and in 2010, residents owned a larger proportion of mobile devices such as BlackBerries, increasing from 16% in 2007 to 32% in 2008, 55% in 2009 and 76% in 2010.

Regarding residents’ online habits, consistent with 2008, the most regularly used online activities include using search engines, using Government websites, online banking and bill paying, looking for travel information, and researching products or services and online shopping.



Back to Bermuda Index »