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E-Commerce Park

Introduction

There are more than 100 offshore jurisdictions (many of them, perplexingly, firmly onshore) which provide low-tax regimes to their inhabitants and/or to non-resident companies or individuals, and almost without exception they have nailed their colours firmly to the mast of e-commerce, understanding that the Internet will allow many types of commercial activity to be carried out offshore which were previously anchored physically in their destination (high-tax) market-places.

Broadly speaking, e-commerce development offshore has so far been limited to existing offshore specialities such as banking, with so far perhaps only the betting and gaming sector having given a demonstration of how easy it is for an entire industry to up sticks and leave if domestic legal and tax regimes are too restrictive.

There is widespread acknowledgement that, sooner or later, there will be a mass exodus from high-tax jurisdictions of many other types of company which no longer need sales-forces, manufacturing plants or distribution systems on the ground, but some surprise that it hasn't happened yet to any large extent. This is reasonably understandable given that e-commerce still represents only a tiny fraction of sales in most sectors, and that customers are still reluctant (rightly or wrongly) to trust the new medium for transactions involving money. Firms therefore don't feel that they can risk burning their bridges by giving up their legacy systems and installations - and the move offshore is not one that can be carried out on a trial basis. In order to get the tax benefits, there has to be a clear split with the old existence.

For an offshore jurisdiction hoping to develop into the location of choice when the flood does begin, there can't be any waiting around though: it's necessary to demonstrate now that one is bulging with connectivity, support staff and server space, because there are a dozen or more competing jurisdictions doing the same thing. It can also be argued that the lack of established, proven facilities offshore is one of the contributory factors to the slowness with which mainstream businesses are making the move. Other factors, apart from buyer reluctance, include the uncertain corporation tax environment pending a final report from the OECD's Technical Action Group on permanent establishments, and the emerging split on sales tax practice between the US with its moratorium on e-commerce taxation and the EU's keenness to extend VAT as quickly as possible to digital downloads.

In this survey we are going to take a look at the degree of e-readiness of the main competing offshore jurisdictions from the perspective of physical facilities and the availability of technical support. Without specifically aiming to describe the regulatory background, we will need to mention the telecommunications regime in particular - it is more difficult for a jurisdiction to offer competitive facilities if it is still operating under a telecoms monopoly, although our first jurisdiction, Dubai, surveyed in July, offers some limited reassurance in this direction.

The Jurisdictions: Part III

Netherlands Antilles

Mauritius

Netherlands Antilles

Government support programmes and legislation

The Netherlands Antilles government passed the National Ordinance on Electronic Agreements ("landsverordening overeenkomsten langs elektronische weg") early in 2001. The Ordinance regulates the legal requirements for matters related to digital signatures, recognition of electronic records, formation and validity of contracts, data protection and consumer protection.

Minister of Economic Affairs Mrs Suzy Camelia Romerla said that this e-commerce legislation will help Curacao to become an important telecoms and internet service providing center in the world.

Key features are as follows:

  • The Act provides that an electronic signature shall have the same legal effect as a hand-written signature, and may be admitted as evidence in legal proceedings.
  • The Act also designates the types of agreements that may not be concluded by electronic means or by means of one or more named electronic techniques, or that have to remain accessible by non-electronic means as well.
  • The Act prescribes obligatory statements within the framework of any 'Commercial Communication' and lays down further rules with respect to the contents and nature of a Commercial Communication, the nature or magnitude of electronic trade and the target group.
  • The Act also makes provision for "uninvited commercial email:" The recipient of an uninvited Commercial Communication shall be given a clearly recognizable and simple possibility in each such message to object to further messages. Once such objection has been communicated, the sending of uninvited Commercial Communications to that recipient is prohibited.
  • The provider of a Commercial Communication is obligated to state at least the following data completely and clearly in his Commercial Communication:
    • the name, registered office or domicile, and the address of the provider of the Commercial Communication;
    • information which makes prompt contact and direct and effective communication with the provider of the Commercial Communication possible, including his E-mail address;
    • where and when the provider of the Commercial Communication has been registered in the trade register, including the entry number, or where and when the provider of the Commercial Communication has been registered in another way, unless there is no question hereof.

Much earlier, in 1993 the government had passed the National Ordinance on Offshore Hazard Games - PB 1993/63. Under this Ordinance a company on Curacao can get a Netherlands Antilles master licence allowing it to offer global interactive casino/ sportsbetting and lottery games via telecommunication facilities and/or the internet.

The government has supported the creation of a Curaçao E-Commerce Platform which consists of representatives from business and Governmental sector. The goal of the Curaçao E-Commerce Platform is to enhance Curaçao’s E-ntrepreneurial environment in order for Curaçao to play a greater role in electronic business.

The Platform consists of four task forces: Logistic, Financial, Legal & Tax, and Technological. Each of these task forces works on changes and improvements in their respective fields and when necessary engages in cross-border activities that help fulfill the objective of improving the e-business infrastructure on Curacao.

The government has also moved to attract e-commerce operations through its programme to expand the existing free zone to take in e-commerce and internet operations. The new regime which came into effect in April 2001 under the 'Ordinance On E-Zones' offers highly attractive (see below) tax benefits to companies establishing themselves in

Telecommunications is another key component of the e-commerce infrastructure on Curaçao. The privatization of this industry is a governmental priority. The privatization process will allow the services being offered to improve in both price structure as well as in quality.

The government has already taken several steps towards privatization including the elimination of the "Landsradiodienst" (Landsradio) and its replacement with a number of separate corporate entities under holding company United Telecom Services. In Curacao, Antelecom NV is responsible for international services and Setel is responsible for local infrastructure and services. On St Maarten, TelEms and Smitcoms (St Maarten International Telecommunications Services Ltd) have equivalent roles, although they have not been completely separated. In theory at least, Smitcoms is able to compete with Antelecom.

These new organizations are intended to be commercial competitors in a liberalised and deregulated market-place, but these companies in time-honoured fashion now object to further liberalisation of the market which will dent their profit margins.

Private operators have been allowed to offer mobile, internet and other 'value-added' services, but not to compete in mainstream telecommunications. According to the government's original plans Antelecom NV would now be transferred into the private sector through a stock offering; but TelEm is objecting, saying that privatisation should be put on hold. Minister of Transportation and Communication Ensley Bulo explains that competition is healthy, and notes that one of the advantages of a liberal telecommunication market is a price war, which in the end results in lower rates for the customer.

In response to fears that competition will drive down service levels, Deputy Director of the Telecommunication Bureau Joao Duart de Canha points out that operators still need licences. "Just like with a TV or radio station, a licence will be needed and certain technical standards must be complied with. No licence will be granted to work with old technology," he says.

The deputy director explains that it is also the intention to divide infrastructure from service delivery, quite correctly departing from the UK model in which BT was allowed to retain control of the local loop, resulting in stunted development of value-added services.

De Canha explained that one of the tasks of the Telecommunication Bureau is to try to regulate "the big guys" like Antelecom and TelEm, who are putting all possible obstacles in the way of new entrants to the market.

Telecommunications Liberalisation

While TelEm has expressed concerns about the imminent telecommunication liberalisation and has called on politicians to oppose it tooth and nail, potential competitor and mobile operator East Caribbean Cellular (ECC) is taking a completely different stance.

The government has already taken several steps towards privatization including the elimination of the "Landsradiodienst" (Landsradio) and its replacement with a number of separate corporate entities under holding company United Telecom Services. In Curacao, Antelecom NV is responsible for international services and Setel is responsible for local infrastructure and services. On St Maarten, TelEms and Smitcoms (St Maarten International Telecommunications Services Ltd) have equivalent roles, although they have not been completely separated. In theory at least, Smitcoms is able to compete with Antelecom.

"Liberalisation in general is meant to benefit the customer. It forces players to be more efficient and effective. Players that can't, don't survive," says ECC consultant Russel Bernadina. A former director of LandsRadio and the Bureau of Telecommunication, Bernardina says: "In fact I was one of the initiators of the idea to liberalise the telecommunication market. That would be completely in sync with thoughts of the World Trade Organisation (WTO) and the International Telecommunication Union (ITU)."

He said ECC is anxiously looking forward to the liberalisation, as it will furnish the tools to enter additional market segments, besides offering cellular service.

"Of course we have looked at the other possibilities in telecommunication," he said, mentioning GSM systems, through which short message services can be offered, and wireless fixed phone services.

"What we're considering is offering tailormade packages at affordable rates. You know, aiming at the niche markets, answering the demand. In today's world, talking over the phone isn't the most important thing anymore. Doing business over the phone is," he said.

He said that Internet services are also in consideration. "But to set up our infrastructure for all the other services we need a licence, which we will only get when the liberalisation laws are passed."

According to Bernadina, the current situation in St. Maarten's market, with TelEm reigning as a monopoly, makes it hard for ECC to compete. "TelEm has fixed wire lines, mobile phone service, international phone service, fixed wireless and Internet. They're like a one-stop-shop. And, also because they have more manpower, they can easily force ECC out of the market. That's why we need more concessions," he explained.

However, as long as the current laws are not adjusted, that will not be possible. "And we are not the only one that wants to enter the market," he said, refusing to reveal how much he knows about others that want to. "That wouldn't be ethical."

Bernardina says that in any case, the monopoly operators are under threat from the internet. "Now you have Voice Over (Internet Protocol) IP, international calls over the Internet. The caller pays no more than a dollar, apart from that flat rate the local companies charge," the consultant said. He says that even though the quality of the calls is for now only reasonable, a lot of people make use of the service because the price is favourable.

According to him there are already two companies in Curacao - Curacao Telecom and GEN Spidernet - that offer Voice Over IP service. "In off-peak hours you hardly hear a difference in quality," he said. The internet sector is in fact already highly competitive, with an increasing number of ISPs (see below).

Telecommunications infrastructure

The government has already taken several steps towards privatization including the elimination of the "Landsradiodienst" (Landsradio) and its replacement with a number of separate corporate entities under holding company United Telecom Services. In Curacao, Antelecom NV is responsible for international services and Setel is responsible for local infrastructure and services. On St Maarten, TelEms and Smitcoms (St Maarten International Telecommunications Services Ltd) have equivalent roles, although they have not been completely separated. In theory at least, Smitcoms is able to compete with Antelecom.

The underwater optic glass-fibre cable 'Americas II', running from North America via the Caribbean to South America became operational for Curacao, Netherlands Antilles in October 2000. In February 2001 another cable with vastly more capacity made its landfall in Curacao with the arrival of the cable-laying ship Manta during its deployment of the optic glass-fibre cable 'Arcos'. Arcos is the highest-capacity submarine cable yet laid, and is the first to be 'self-healing' in the event of physical damage.

Arcos has a capacity of 960 gigabits in comparison to the 25 gigabit capacity of Americas II. The cable will connect Curacao directly with several countries in South America, the Caribbean and Miami. The shareholders of Arcos have decided to place their 'Network Operation Center' (NOC) on Curacao and will place it under the control of United Telecom Services (UTS), the local telecom holding company in Curacao.

The Arcos cable's other NOC is in Miami. UTS is negotiating with Siemens to use Curacao as their home port for the maintenance-services of Arcos. Siemens has a contract with Arcos for the repair and maintenance of the cable worldwide.

According to UTS, the 'Arcos' will result in more bandwidth for Curacao, one of the most important requirements for successful development of e-commerce in the Netherlands Antilles.

Local infrastructure also makes use of fiber optic technology. The Fiber Optic Ring project which connects most of the main Central Offices on the island was completed in 1996, and since then all main trunk lines have been switched to the new technology.

Centralized management and control over telecommunications in Curaçao takes place in the completely computerized Network Management Center (NMC). This center makes it easy to identify and resolve problems in a preventive manner. The Center includes all support systems which control and manage the X-25 Network, the DAN Network, SDH Network, Cellular Network, Public AXE Switches, Frame Relay Network, Internet Corporate Clients and the latest A/ISDN technology systems.


Internet Service Providers

When Internet access first became available SETEL developed an Internet service specifically for business use; it is known as the Corporate User Internet Service. Besides this, SETEL also offers dial-up Internet services for individuals, which are supplied through Curinfo, Curaçao Information Network.

In the private sector, ISPs include: www.b-gate.net, www.carats.net, CuraNet (www.cura.net), www.curlink.com, iseeyou.com (curacao.com) and www.smartnet.an.

Carib-Online (COL) is a new player on the Caribbean market in the field of Internet Service Providing (ISP), web-hosting and more. Carib-Online says it is 'a company which is able to provide fast and reliable Internet connections for your business as well as for the individual user'. Carib-Online also offers hosting service including web hosting on shared or dedicated web servers, CO-location at its advanced COLhost DataCenter, and application hosting including e-commerce solutions.

InterNeeds was founded in August 1998. WebSite: www.interneeds.net. The company says it offers various services, from the smallest Need-A-Bit package (5 hours per month) to an unlimited package as well as corporate accounts.

Terra Net (http://www.bbits.net/) says it is a new ISP giving service at present to over 200 dial-up customers, and web-hosting to 8 customers including an internet radio station. Terra Net also provides domain name services.

The E-Zones

As of April 1, 2001, special tax legislation for international Internet companies on Curacao came into force to act as an incentive to persuade e-commerce companies to relocate their activities to the Island. The new law replaces the old Free Zone law and governs 'E-Zones' which are areas within the Netherlands Antilles where international trade and trade supportive services may be carried out by electronic communication and electronic commerce.

Only legal entities with a capital divided into shares may perform activities in an E-zone. The activities of these companies must in principle be focused on trading or providing services to companies located outside the Netherlands Antilles. A company may be allowed to conduct business with other firms located in an e-zone but the company has to apply to the local authority before doing so. If given the go ahead the company must meet conditions relating to price setting, quality of the goods and services on offer and the distribution of goods. The turnover generated through local business may not exceed 25% of the company's total turnover.

In terms of profit tax the profit of companies within the e-zones will be taxed at 2% - including surtax - until January 1, 2026. This rate is not applicable on the profit of an e-zone company if it is generated by the sale of goods or services to companies located in the Netherlands Antilles or generated through the rendering of services to affiliated companies located in the country. No import duties and turnover tax is due on goods entering the E-zone and services rendered by a Netherlands Antilles company to an E-zone company. Furthermore, no import duties and turnover tax is due on products delivered to or services rendered to other companies located in the E-zone or outside the Netherlands Antilles.

Finally, employees who have lived in excess of five years outside the Netherlands Antilles before starting work in an e-zone can qualify for expatriate status, with certain tax-free benefits - providing certain conditions are met. An e-zone company can calculate the wage tax on the net salary of the employee without being required to 'gross up' the salary.

The local authorities will see to it that E-zone companies meet the conditions as stated in the E-zone legislation. If it appears that an E-zone company is not fulfilling the conditions, penalties can be imposed or the entrance permit can be withdrawn.

Two areas have been designated as E-zones and a third will be added shortly. These areas have state of the art telecommunication facilities, which provide direct and reliable internet access. It may well be that in future other areas will be added.

E-Commerce Park

E-Commerce Park

The first government appointed E-Zone to be brought into operation is in Curaçao and is located next to the international telecom provider UTS. E-Commercepark has a Caribbean solution for world-class e-service. Hardwired to the Internet backbone it offers the best possible rates for bandwidth. Over 200 square meters of hosting and co-location area, as well as a 24x7 Network Operations Center and over 2700 square meters of office space are available for small- to medium-sized companies.

On top of the fiber landing point

The Datacenter, at the heart of the facility, is built Fort Knox-style and features a state-of-the-art co-location area, fully climate controlled, with round the clock security, an intelligent fire protection system using special gas and more. Maintenance on equipment is possible from a separated client's area and there is a redundant back-up power generator and a redundant UPS no-break system.

Bandwidth

E-Commercepark is directly connected via the ARCOS Marine fiber optic cable to the NAP of Americas in Miami, Fla. The ARCOS marine cable provides redundancy by a self-healing Fiber Ring, which re-routes the traffic in case of an emergency. The provided bandwidth now is a DS-3, 45 Mbit, with multiple 45 Mbit options. E-Commercepark's target grow is 4 STM-1's providing 620 Mbit!

E-Management

With the E-Commercepark Network Operation Center you will get a proactive view on your E-business environment 24x7, 365 days a year. We provide guaranteed service levels, flexible services and measurable results on monitoring, management, security and storage

Total E-Solutions

E-Commercepark maintains a very close contact with various strategic partners to provide the necessary legal paperwork and other guidance to ensure a smooth transfer to Curaçao and the building itself houses other companies that provide services for global e-commerce operations.

Office space

The E-Comercepark Office Building offers over 2700 square meters of office space. From callcenters and business units to fully furnished executive suites. The E-Commercepark Facility Services department will provide you with all the necessary services, so clients can focus on what's important : Their E-business.



Providers of Professional Services

Spigthoff Attorneys at Law www.spigthoff.com
Spigthoff

Spigthoff Attorneys at Law has offices in both Amsterdam and Curacao and employs around 30 attorneys and tax advisors. The Curacao office is a full service law firm and specialises in areas covering e-commerce, corporate law, banking law, securities law and insurance law. In Amsterdam services concentrate on restructuring, generally as well as specifically, in cases of insolvency, securities law, private equity/venture capital, mergers, acquisitions and other complex transactions, litigation, financial and economic criminal law.


E-Commerce Applications

Maduro & Curiel's Bank

The financial services sector has been an early user of e-commerce in the Netherlands Antilles. Maduro & Curiel's Bank (MCB) offers internet banking under the name MCB@home, including credit cards, loans and mortgages. MCB is the largest commercial bank in the Dutch Caribbean with 31 branches on Curaçao, Aruba, Bonaire, St. Maarten and St. Eustatius. Balances and transaction histories are available for current and savings accounts; very soon, says the bank, transfers within own accounts and payments to third parties will be offered by MCB@Home.

Maduro & Curiel's Bank has also formed an alliance with First Atlantic Commerce Ltd, the Bermuda-based provider of global e-commerce solutions, in order to enhance its e-commerce services. MCB has a strong presence in insurance brokerage, underwriting and loss adjustment; portfolio management and investment services, private banking and offshore trust and corporate management services, and has already developed a considerable e-commerce focus.

Managing director of MCB, Ron Gomes Casseres, said: 'We are pleased to be building our e-commerce offering with enhanced products and services, to answer the ever-changing needs of the industry. Adding First Atlantic Commerce’s technology to our infrastructure allows us to compete with e-commerce banks and jurisdictions around the globe.'

Andrea Wilson, chief executive officer of First Atlantic Commerce commented: 'First Atlantic Commerce is pleased to be assisting Maduro & Curiel’s Bank with their e-commerce initiative, and to further promote the Netherlands Antilles as an e-commerce jurisdiction. MCB joins a distinguished list of innovative banks worldwide which are leading the way in the e-commerce economy.'

For its part, First Atlantic is forging ahead with plans to set up an e-business consultancy division for the banking sector in Latin America and the Caribbean. It is in response to demand from banks in the region, and is due to be open for business early in 2002.

Windward Islands Bank Ltd

In November 2000, the Windward Islands Bank Ltd (WIB) also launched an e-banking service under the name WIB@Home, the first Internet banking service to be offered by a local bank in St Maarten.

The new service enables users to have almost total control over the use of their accounts. Using this service and an accompanying Bankomatico card, customers may check their account balances, check their account history, make transfers between accounts on the card, verify if a cheque has been paid, order cheques and place stop payments on cheques.

At a press conference to market its Internet banking activities, WIB Marketing and Public Relations Officer, Rolando Tobias, commented: 'As times change, the bank continues to accommodate these changes by offering innovative services.' He added that with the role the Internet plays in today's society and in keeping with the bank's motto of "Your Partner in Progress," it had been expected that WIB would offer Internet banking.

The first live Internet banking transaction was made by Commissioner of Telecommunications Franklin Meyers.

Cyber Curaçao

Cyber Curacao is a joint venture of several legal, technical and fiscal advisory companies, who offer a range of products and services via the Internet. The firm says it offers:

  • Taxfriendly climate, and thus a higher net-profit;
  • All the necessary licences/permits;
  • A custom-made website with the necessary hardware;
  • Offshore bank accounts with merchant accounts;
  • Software for your Transfers of Payments;
  • Services of its E-cash company;
  • Dependable Internet connection;
  • Fully-equipped office space;
  • Worldwide marketing.

Cyber Curacao particularly targets betting and gaming companies, offering:

  • Protection of a Master Licence;
  • Business Licence for the Internet Casino;
  • Work and Residence permits;
  • The necessary hardware;
  • The necessary software;
  • Maintenance of the Software (7 days, 24 hours a day);
  • The services of our E-Cash Company;
  • Visa and MasterCard Merchants;
  • The offshore Cashier Company;
  • Internet connection (7 days, 24 hours a day);
  • Office Space;
  • Worldwide marketing.

In order for the Internet Casino to have legal status, says Cyber Curacao, the protection of a Master Licence is offered, under which the Internet Casino obtains its individual licence and can thus operate legally. A licencing-agreement must be entered into with the Master Licencee, at a monthly fixed fee. They also arrange a business licence for the Internet Casino and the necessary work and residence permits for the foreign personnel required.

The firm's software package offers the following games: Video- poker, black-jack, roulette, craps and slot machines.

The firm says that each Internet Casino will have its own Visa and Mastercard merchant accounts. Through the own merchant accounts payments made with Visa or MasterCard can be processed safely and efficiently. The necessary interface software is also included as well as online clearing and processing using the latest SET protocols. Payments are processed within a few workdays and credited to the account of the Internet Casino. The costs involved consist of the usual discount given to merchant accounts; an administration fee for processing the payments and monthly bank statements, in addition to maintaining the mandatory marginal reserves for charge-backs.

Cyber Curacao also arranges for incorporation and provides day-to-day management of the cashier company of the Internet Casino. This company is domiciled in a jurisdiction with a tax-friendly climate and offshore bank accounts. The Cashier Company can be used for receipt of payments via credit cards and banker's cheques and can in turn make payments to clients of the Internet Casino through bank transfers and/or cheques, using international AirCourier service.

Enaro NV (www.enaro.net)

Enaro, which is a joint venture of Amsterdam Trust Corporation, Boss Internet Group and E-sst Holding, says that it develops customized ebusiness solutions and manages these from within 100% client-owned and controlled business units set in an attractive legal/fiscal structure, subject to 2% corporate income tax only. Enaro's yield- and efficiency-driven approach equips a corporation with a benchmark ebusiness solution plus generates immediate value through significant tax savings.

Enaro bundles the expertise of a renowned independent Trust company, responsible for the management of over 30 billion US dollars of client assets, with that of a long standing USA developer of business Internet applications. E-sst Holding, a strategic research and investment vehicle, developed the Enaro business model and brought the partners together.

Enaro says its product and services are designed to benefit exporters, international media and new independent trading companies currently subjected to 20+ % corporate income tax and planning to launch new products and/or expand into new geographic markets.

BACK TO JURISDICTIONS

Mauritius

Government support programmes and legislation

In 2000 the newly-elected Mauritian government announced plans to create an IT free-trade zone on the island. Prime Minister, Anerood Jugnauth, said: 'The year 2001 will be marked by the relaunch of the Mauritian economy. We want to make Mauritius an information technology free trade zone with digital parks.'

The digital parks will offer all the latest available technological facilities to meet the needs of IT business, and the government aims to provide a series of fiscal incentives to both domestic and foreign businesses operating in Mauritius, including a 5-year tax holiday. Jugnauth also announced the launch of an official body to promote the IT sector in Mauritius as a major centre for foreign businesses. It is expected that the IT free trade zone will create thousands of jobs on the island. The government hopes to emulate the success of its Export Processing Zone (EPZ) which has established itself as a prosperous commercial base in relation to India and South Africa. The EPZ offers a range of fiscal incentives, as well as duty-free importation and re-exportation.

E-commerce adoption in Mauritius is expected to be a catalyst that will help propel Mauritius to become a service based society. Mauritius aims to become the regional electronic hub for businesses and government entities within already established trading communities such as SADC, COMESA, and it is envisaged that the Offshore and Freeport sectors will play crucial roles in terms of attracting investment and providing a logistical platform for e-commerce.

'As a country,' says the Government, 'we want to ensure that Mauritian businesses, institutions and communities at large will have access to the social and economic opportunities created by the new technologies, information infrastructure and digital content. This will result in business growth and development, new and innovative jobs, improved capacity for communications and improved ability to extend our reach to other countries.'

The Government sees Mauritius as possessing a number of crucial advantages in terms of e-commerce development: 'There is a good telecommunications infrastructure and a significant number of operators in the transport, business and financial services, trade and publishing. The country occupies a key position in the field of logistics and distribution; an international outlook, a high standard of education and good linguistic skills are also among our key assets.'

The Mauritius government is also planning to implement a 'green visa concept' which allows Indian companies looking to set up a venture in Mauritius to bring in as many IT experts as they need without complicated red tape procedures.

In January 2001 Port Louis, Deputy Prime Minister and Finance Minister Paul Berenger announced the setting up of an Infocom Development Authority to promote investments in information technology and to regulate the sector. He said that the new authority would take care of both the Mauritius Telecommunications Authority and the National Computer Board. "Information technology is the priority of the government," he said.

The Government's plans were given their clearest expression to date by Paul Berenger in his budget speech in June 2001, when he said that the Government's overall objective is to develop Mauritius into a Cyber Island and a knowledge hub. Government, he said would marshal the resources and efforts required to fulfil this ambition. Mr Berenger told Parliament that a line of credit of US$ 100 million had already been secured from the Government of India for the implementation of these projects.

In view of the importance of the project, Prime Minister Anerood Jugnauth himself is chairing a Ministerial Committee to spearhead the development of ICT in Mauritius. The three task forces set up to look into the establishment of a Cyber City, and the implementation of e-Education and e-Government projects are reporting on a monthly basis to the Committee.

The Cyber-City Project

The Ebène Cyber City Project is being set up by Business Parks of Mauritius Ltd (BPML), an associate of Software Technology Parks of India, whose executives have prepared a fully worked-out business plan for the establishment of the City. It will comprise a cyber tower, a business tower, a knowledge complex, a multi-media complex, a Government administrative complex, common facilities and residential units. The new city will have its own direct international connectivity, and in order to accelerate the development of the Cyber-City, the Government decided in July to install a satellite reception station by November to ensure adequate connectivity. Construction works on both the Cyber City and its road links are scheduled to start by the end of this year.

BPML will also be responsible for the implementation of a business park at Rose Belle. Already, renowned international firms engaged in software development, ICT training and call centres have expressed keen interest to locate their activities in the Cyber City and at the business park.

The E-Education Project

The Prime Minister has said that a detailed project plan has been worked out for the development of IT in schools, with a total price tag of 1.6 billion rupees. "This project will pave the way for the younger generations to acquire the skills and knowledge to become fully computer literate citizens of tomorrow," he emphasised.

The E-Government Project

In his budget speech, the Finance Minister followed up on the Prime Minister announcement of the government plans to create an electronic interface with its citizens. 'We need to provide to our citizens and investors alike, 24 hours a day, 7 days a week, on-line access to government information and services from anywhere,' said the Minister. 'Each ministry and department will have its own interactive website accessible through a common Government Portal. The Government On-line Centre Project is estimated to cost Rs 40 million. We are at the same time accelerating the implementation of various computerisation projects in ministries and departments. In this Budget, I am making a total provision of Rs 180 million for Government IT projects.'

Mr Berenger also described the Government's legislative plans for e-commerce: 'We will also fine-tune the legislative framework to meet the requirements and exigencies of the emerging Net Economy. In this context, new legislation relating to the regulatory functions of the Mauritius Telecommunications Authority as well as to data privacy and protection, electronic consumer protection, computer misuse and cyber crimes will be introduced.'

Finally, during a speech that lasted three and a half hours, the Minister announced plans for a government-sponsored incubator: 'In our drive to make of Mauritius a Cyber Island, we are not ignoring the need to promote Mauritian entrepreneurship. Our young people are endowed with talent and potential for innovative ideas in ICT. They need to be provided with the necessary support and facilities. The National Computer Board will set up an ICT incubator to promote start-ups.'


Telecommunications Liberalisation

In accordance with a commitment made to the WTO, The Telecommunications Act,1998 sets out the intention of government to progressively divest itself of its equity in Mauritius Telecom, gradually liberalise the telecommunications market and ultimately achieve open competition in the telecommunications sector at all levels and on all services. Monopoly provider Mauritius Telecom has been granted until 2004 to prepare for competition in the local, long distance and international markets. In return as the country's only licensed provider of telecom services, the company has tough targets to meet for line roll-out and service quality.

Under the new regim from 2004, telephone operating companies such as Mauritius Telecom will be licensed and supervised by an independent regulatory authority. Meanwhile, that authority has yet to be put in place.

Nonetheless, Mauritius Telecom is already pursuing the modernisation of its telecommunications network. ATM transmission and Advanced Switching Technology, Intelligent Networks, pair-gain systems, Wireless in the Local Loop, fibre optic to the building and other leading edge technologies are being introduced to meet the ever-increasing demands of businesses and consumers.


E-Commerce Legislation

The key piece of e-commerce legislation in Mauritius is the Electronic Transactions Act 2000. Other important laws are:

  • The Information Technology (Miscellaneous Provisions) Act - Dec 1998;
  • Telecommunications Act - Dec 1998; and
  • The C opyright Act - Sep 1997 - Download

'The setting up of the appropriate legal framework,' says the Government, 'is essential for Mauritius to position itself to exploit the new opportunities of Electronic Commerce and enable our enterprises to participate more actively in the emerging global economy. E-commerce experience in other countries has demonstrated how important the legal infrastructure is as a foundation and catalyst to the development and acceptance of e-commerce. The Electronic Transactions Act (ETA) removes legal obstacles and establishes a more secure legal framework for business and governments to function in an environment of trust.'

The provisions made to enable government to adapt its own administrative procedures and processes to enable the e-government also demonstrate the commitment of the Mauritian government to the creation of an environment of trust where companies can feel safe and secure in conducting their online business.

Electronic Transactions Act - ETA

The work group responsible for the drafting of the Mauritian legislation examined the UNCITRAL Model Law and considered e-commerce legislation introduced in countries such as Singapore, UK and Australia.

The following guiding principles were adopted:

  • The need to conform to international standards and international models in order to be integrated with the global e-commerce framework;
  • The need to avoid over regulation;
  • The need to be flexible and technologically neutral to adapt quickly to a fluid global environment; and
  • The need for transparency and predictability.

The objects of the Act are to provide:

  • an appropriate legal framework to serve as the foundation to facilitate electronic transactions and communications and give a new orientation to the traditional way of doing business by fostering the conduct of transactions by electronic means;
  • the legal recognition and regulation of electronic records and electronic signatures for authentication purposes during the conduct of electronic transactions and the security of such records and signatures;
  • the regulation of the formation of contracts by electronic means;
  • the appointment of a Controller of Certification Authorities who shall be responsible for the licensing and monitoring of the activities of the certification authorities;
  • the electronic filing of documents in the public sector in order to enable the business sector and the public in general to resort to electronic media in their dealings with Government; and
  • uniform rules and regulations aimed at establishing standards to combat fraud, forgery or any unlawful practice in order to build and ensure confidence in electronic records and dealings to promote electronic communications and transactions.

The Government says that Certification Authorities will play a vital role in facilitating secure electronic transactions as they provide the infrastructure for transacting parties in an electronic environment to authenticate each other's identities and ensure non-repudiation of electronic transactions through the use of digital signatures.

The ETA provides the legal framework for the establishment of a public key infrastructure (PKI) - also called trusted CA services - to faciliate the use of digital signatures in Mauritius. The ETA also makes provision for the setting up of a Controller of CAs to ensure that the integrity and standards expected from CAs are respected.

In the long term, it is expected that these will provide the foundation to establish Mauritius as a trusted hub for e-commerce, providing a wide range of security products and services.

The Electronic Transactions Act makes provision for a voluntary licensing scheme for Certification Authorities (CAs) by the Controller of Certification Authorities (CCA).

The ETA provides for the appointment of a Controller of CAs. The Controller will, amongst other duties, license, certify, monitor and oversee the activities of CAs. Only licensed and approved CAs will enjoy the benefits of the legislation for signatures generated from the certificates issued. The exception to this is where parties agree to be bound by signatures created by a commercially reasonable procedure. Once set up, the Controller of CAs will lay down the administrative framework for licensing of CAs, the criteria for a CA to be licensed, and the continuing operational requirements after obtaining a licence.

In 2000, the South African Certification Agency (SACA) signed its first business partnership agreement in Mauritius in line with its strategic expansion into Africa, and in particular into the SADC region.

The partnership agreement is with Happy World Bureautique (HWB), ranked among the leading IT companies in Mauritius and a member of the Happy World Group, one of the largest conglomerates in the country. In terms of the agreement, HWB will act as SACA's official reseller in Mauritius with access to its full range of VeriSign digital security products and services.

SACA is expecting that this agreement will help them further their strategic goal of becoming the leading provider of digital certification security solutions across Africa.


Telecommunications infrastructure

The infrastructure for telecommunications is provided by monopoly operator Mauritius Telecom (MT) who set up, in December 1998, a Broadband ATM Data Network in order to provide business and residential customers with an Information Superhighway Infrastructure. MT says it has connections to the international backbone to a capacity of 10 Mbps.

Also in 2000, UTStarcom, a provider of telecommunications access equipment, announced the completion of a deal to provide Mauritius Telecom with access network equipment for a next generation xDSL leased line nationwide data network.

The network includes central office and customer premises ISDL and HSSL equipment that delivers corporate leased line and broadband access services for Mauritius Telecom's ATM, X.25, Frame Relay and Fast Internet customers. The new services will be marketed as MauriCell, MauriData, MauriFrame and InterFrame and the network will cover over 33 regional locations with capacity for thousands of DSL subscribers.

In a press statement, Mauritius Telecom's Data Services Manager, Yagianath Rosunee, said: 'We selected UTStarcom's AN-2000 system based on its high performance, cost effectiveness and flexibility. Mauritius Telecom now can deploy a unified access network for all of our business as well as consumer data services. This has simplified network management - and in the future, we believe AN-2000's ... capabilities will allow us to add switched and statistically multiplexed services easily.'

He added: 'The ... system is well ahead of other products that we prospected during the selection process in terms of services and evolution to support new features. UTStarcom has been very responsive to all changes we have requested them to make on the product and today we are totally satisfied with the Network's performance.'

Asymmetric Digital Subscriber Line (ADSL) technology which is to provide faster connection (8Mbps) is being tested and is being introduced during 2001. ADSL will allow users to get connected to the Internet at up to 8 Mbps downstream and up to 512 Kbps upstream. 'Wireless in the local loop' is already being deployed.

Data Network Services are extremely important for e-commerce and e-business since they provide the means for businesses to create their own Intranets and Extranets. The network infrastructure of Mauritius Telecom, says the company, allows for a wide range of data services, enabling businesses to have network connections at speeds ranging from 9.6 Kbps up to 2 Mbps.

MT lists its various Internet connection facilities as follows:

  • ISDN MauriNis Service; Available speeds : 64 Kbps, 128 Kbps and 2 Mbps. Nationwide coverage
  • Leased Lines; Available speeds : 9.6 Kbps, 64 Kbps, 128 Kbps, 256 Kbps, 512 Kbps, 1 Mbps and 2 Mbps. Nationwide coverage
  • X.25 Mauridata Service; Available speeds : 9.6 Kbps, 19.2 Kbps and 64 Kbps. Nationwide coverage
    Frame Relay MauriFrame; Available speeds: 64 Kbps, 128 Kbps, 256 Kbps, 512 Kbps, 1 Mbps and 2 Mbps.

For International Data Services, MT offers:

  • ISDN; Available speeds : 64 Kbps, 128 Kbps.
  • Leased Lines; Available speeds : 9.6 Kbps, 64 Kbps, 128 Kbps, 256 Kbps, 512 Kbps, 1 Mbps and 2 Mbps.
  • X.25; Available speeds : 9.6 Kbps, 19.2 Kbps. Connection to all countries serviced by France Telecom.
In 1995, Mauritius Telecom and France Câbles et Radio (FCR), a subsidiary of France Telecom, responded to the ever-evolving and increasingly sophisticated demand for telecommunication services in Mauritius by establishing a strategic alliance and setting up Telecom Plus Ltd with the main objective of providing value-added telecommunication services to support the development of basic networks in Mauritius. Witnessing a rapid growth since its inception, Telecom Plus is presently expanding its scope and offering its services well beyond the frontiers of Mauritius.

Telecom Plus now has about 40,000 subscribers, of whom about 30,000 are domestic customers. Thus about 10% of the households in Mauritius have computers and Internet connections.

Avec 30 000 connexions domestiques à Internet, il est estimé que 10% des familles mauriciennes utilisent aujourd hui cet outil de communication.

Internet development in Mauritius in terms of density of connections compares reasonably well with its neighbours in geographical terms. ITU figures for 2000 put Mauritius in 48th place out of 206 countries covered, with 733 connections per 10,000 inhabitants. This compares for instance with 549 for South Africa and 736 for the Seychelles.

Connectivity/Bandwidth Availability

A total of 10 Mbps bandwidth is currently available from the two international links to the Internet - 2 Mbps and 8 Mbps satellite connections to the United States and to France respectively. Given that the number of Internet users and Internet traffic is increasing constantly and in enormous proportions, Mauritius Telecom instituted a project under SAFE (South Africa-Far East) in 2000 to add substantial extra capacity.

Under SAFE, in 2001 Mauritius Telecom started the installation of underwater fibre-optic cables in Bay Jacotet, in the south of the country, 40 km from Port Louis to accommodate the SAFE fibre-optic network which will go from Cape Town. SAFE will in turn be linked in Cape Town to SAT-3/WASC (South Atlantic Telephone-West African Submarine Cable), which is 15,000-km long and links Europe to South Africa and Western Africa. SAFE will continue this connection over 13,800 km from Cape Town to Malaysia, linking Mauritius, Reunion and India on the way. The SAT-3/WASC-SAFE network goes from Sesimbra, Portugal, to Penang, Malaysia, connecting along the way India, Mauritius, Reunion, South Africa, Nigeria, Ghana, Cote d'Ivoire, Senegal and the Canaries. The network will become operational in October 2001.


Internet Service Providers

Telecom Plus, Mauritius Telecom's Internet Service Provider, approaches the consumer market under the name Servihoo, but uses its own name to offer to its business customers a range of possibilities to connect to the Internet cost-effectively and promote their organizations on the net:
  • Development and housing of web pages
  • Creation of a dedicated Internet Service
  • Training and consultancy
  • Connection to Internet via high speed IP leased lines
  • Creation of Intranet projects
  • Electronic Trade
  • Security Systems
  • Setting up of cybercafés

It is government policy to increase the number of ISPs in the run-up to full telecoms liberalisation in 2004, and there are rules governing the terms of the Interconnection Agreement which Mauritius Telecom must sign with an approved new ISP.

Servihoo announced its new NetTV service in August 2001, under which a subscriber can gain Internet access through a conventional television, which comes bundled with a keyboard, remote control, 56K modem and 3-month Internet access subscription. Servihoo says it expects to add 10,000 subscribers to its existing 40,000 members through the new service before the end of the year. Total price for the package is R 7,699, VAT inclusive.


Hosting Services and Facilities

Mauritius, which has pledged to encourage all initiatives which go towards the development of the new economy - in particular the Internet and e-commerce activities - took the unusual stop of selling the rights to its country-code top level domain name (ccTLD). The move comes after similar sales were made by fellow small island nations Tuvalu and Western Samoa.

A California-based company, Dot.Mu bought the rights to control .mu, the domain that was originally assigned to Mauritius. Now the US company is selling the .mu domain names at US$100 for a two-year period of use. The TLD is now being assigned to music-related Internet sites, and, needless to say, Manchester United football club in the UK.

Although there has not been much development of independent hosting services on Mauritius itself, there are nonetheless some interesting Internet applications and facilities

For example, Tracmail Ltd, an enterprise that manages vast volumes of Internet communications for large international organisations, has established an office in Port Louis. Tracmail's chairman and managing director, Bashir Currimjee, said the new company acts as an Internet call centre for customer services and support, manages e-mail for these companies and provides value-added services through the net. "This provides Mauritius with a unique opportunity to be a key player in this market. Being bilingual gives us a further edge and we can provide our services to organisations using both English and French," Currimjee said.


Presence of International Providers


IBM

In January, 2001, IBM announced that it was to set up a regional headquarters in Mauritius. Alain Campioni, a director of IBM, said: 'We have offices in Kenya, Ivory Coast and Senegal which are bigger countries than Mauritius. Yet we have decided to open our regional headquarters here because we want to support the Mauritian government's strategy to make of this island a pool of services and excellence in information technology and e-business.'

In explaining IBM's move to Mauritius, Mr Campioni cited Mauritius' recent efforts to attract IT companies to the area. Taken together with the available manpower and the country's bilingual status, he said: 'We think Mauritius has the potential to become an IT hub in the region.'

IBM, a leading multinational company which creates, develops and manufactures most of the world's most advanced information technologies, first set up office in Mauritius over 30 years ago but until now did not have a significant presence.

IBM's decision to base its headquarters in Mauritius is certainly a major step forward for the Mauritius government in its ambition to become a major IT and e-commerce centre which is looking increasingly likely to come to fruition sooner rather than later.

In March, 2001, Mauritius' Minister for IT and telecommunications, Deelahchand Jeeha, announced that India-based major software company Infosys Technologies will invest US$280 million in Mauritius in the process of setting up its new venture on the island. Jeeha told reporters that the Mauritius government had already allocated 50 acres of land to Infosys which currently supplies its enterprise banking solution to three major banks in Mauritius.

Trintech

Trintech, a major provider of secure electronic payment solutions, has agreed a contract with the State Bank of Mauritius (SBM) to supply the bank with products from its PayWare suite of services.

SBM says Trintech's Payment eAcquirer Technology will become the bank's Internet payment gateway solution provider and the company's PayWare eHost will act as its server-based merchant payment system.

With a listing on the Mauritius Stock Exchange and a 27 per cent share of the domestic market, SBM is Mauritius' leading commercial bank with 50 branches throughout the Island, mainland Africa and India. The bank says the new agreement with Trintech will promote a global e-presence for the bank and is a major step forward in achieving its aim to establish Mauritius as an international, offshore e-commerce hub.

MKT Reddy, deputy chairman of SBM said: 'We look forward to our partnership with Trintech. Their reputation is excellent and the end-to-end solutions provided by their PayWare products will enhance our eCommerce services. We build our capabilities through alliances, like this one, so that we continue to contribute to making Mauritius a financial cornerstone for developing cross-border business between Africa and Asia.'

Trintech, founded in 1987, offers a product range of software services for credit, debit, commercial and procurement card applications in over 35 countries worldwide. In addition, the company covers the payment requirements of consumers, card issuing banks, merchant acquiring institutions, merchants, eMerchants, telcos, wireless operators, ISPs/CSPs, Portals and large corporations.

John Harte, Trintech's executive vice president of sales and marketing, explained his company's decision to extend its partnership to Mauritus 'Trintech begins the new year by introducing our PayWare products to an entirely new market. Mauritius' location, bilingual culture, stable government and multi-continental reach between Africa and Asia make it a logical choice to continue on our global strategy to become the dominant provider of secure ePayment infrastructure solutions worldwide.'

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