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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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