There
is something of a competition between a number
of offshore jurisdictions to offer the most
advanced e-commerce environment to businesses
seeking an offshore base for part or all of
their operations. Gibraltar would claim to be
one of the preferred jurisdictions in this competition.
Can
Gibraltar become a major player in the expanding
and lucrative world of E-commerce and an effective
hub of such activity for the European Union?
In
April, 2004, the government established a new
E-Business Advisory Council, whose membership
consisted of government officials, including
the government’s head of IT, John Desoiza
and the chief executive of the Ministry for
Trade, Industry and Telecommunications, Richard
Garcia. Two members of the panel were drawn
from the private sector and were nominated by
the Gibraltar Federation of Small Business and
the Gibraltar Chamber of Commerce, although
they serve on the council in their personal
capacities.
Gibraltar
has set itself an ambitious goal, since the
world, both onshore and offshore, is full of
countries which have said they mean to become
global e-commerce leaders.
Gibraltar's
advantages are her position in the EU, both
geographically and structurally, an established
base of professionals, good telecommunications
and excellent port facilities. If only the problems
with Spain could be fully resolved, Gibraltar
could function as a tax-efficient e-commerce
gateway to Spain and the rest of the EU beyond
for physical goods as well as digital ones.
As things are, Gibraltar has to give preference
to digital products, including financial services,
in which the competition is strongest.
Some
of the basic infrastructure is already in place.
Despite Spain's efforts to baulk progress and
her reluctance to comply with EU obligations
in this field, Gibraltar has a relatively efficient
telecoms network and the capability to expand
this. Meanwhile, telecoms liberalisation is
reducing the current high costs of the services,
making these more competitive.
As
previously mentioned, geographically Gibraltar
is well-placed both as a stepping stone into
Europe and at a crossroads of the world's communications
network - though such advantages are probably
more psychological than practical.
In theory at least, cyberspace knows no boundaries
and the global nature of E-commerce allows it
to be conducted anywhere.
Another
"plus" is the solid international
reputation as an off-shore financial centre
which the Rock enjoys. Its company and banking
legislation and regulatory practices are comparable
to those of Britain and provide an important
confidence-builder for companies considering
Gibraltar as a potential home - whether for
E-com or any other form of business.
By
locating websites in Gibraltar 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 often
take advantage of low rates of taxation for
increasingly substantial parts of their operation.
A
case in point is the betting and gambling sector:
In 2000 and 2001 Gibraltar attracted many of
the book-makers who fled the UK's high-tax regime
in order to set up telephone betting service
centres offshore. Many of them also offer Internet
products, either as a direct replacement for
over-the-counter or telephone betting on racing,
or simply as pure gambling products: electronic
fruit machines and other casino games. Telephone
betting is labour intensive, electronic betting
less so, but there was still a major boost for
employment in the territory. During 2002 the
offshore betting and gaming sector lost momentum,
but in 2003 Gibraltar appeared to be an increasingly
popular choice again for online gambling firms.
In
May, 2004, Gibraltar showed that its e-commerce
prowess wasn't just limited to betting, when
leading London-based independent trading firm
Mac Futures significantly expanded its presence
in the jurisdiction of Gibraltar with the opening
of a new 100-desk trading facility by Chief
Minister Peter Caruana.
In
May, 2005, PartyGaming Plc, the Gibraltar-based
e-gaming firm which owns the largest multi-player
poker room on the internet, announced a healthy
financial performance prior to its flotation
on the London Stock Exchange. PartyGaming saw
unaudited revenues of $602 million in 2004,
deriving a profit before share option expenses
of $391 million.
THE
LEGISLATION
- The EU Directive
on a Legal Framework for E-commerce
- The EU Regulatory
Framework for Electonic Communications
- Local Legislation
THE FACILITIES
- Hosting and
ISP facilities
- Banking and
Payment Processing facilities
TAX-EFFICIENT E-COMMERCE
- Planning the
Tax Structure
- What to locate
in Gibraltar
- Offshore options
for E-businesspeople
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OFFSHORE-E-COM.COM
HONG KONG
