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Cook Islands: E-Commerce

Offshore Activities

This page was last updated on 8 August 2019.

The natural connection between the internet and offshore stems from the fact that both manage to avoid tax. Businesses that 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.

By locating websites in the Cook Islands 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.

 

 

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