Tax free Business

Cyber Commerce - Tax-Free Business, A Reality?

Francis T. Casey, of the First Antilles Mercantile and Commerce Ltd., suggests how you can operate your business in an E Free-zone, through the use of a virtual merchant service.

Besides the obvious tax benefits for offshore companies, internet income producing companies have been taking a serious look into the benefits of an offshore internet free-zone. In a nut shell, companies incorporate as an offshore entity and therefore have no tax or accounting responsibilities to any country as long as their income is not produced in the country of incorporation. As long as their revenues are from the internet, there are no jurisdictions or even reporting requirements. The possibilities are endless for true pure play internet companies, as well as their traditional retailer cousins, wanting to make a splash on the internet.

Currently, the annual sales of products over the Internet exceed $400 million. Although this is only two percent of the $200 billion in annual catalogue shopping, the potential for revenue generation through online sales is expected to exceed a billion dollars by the year 2000.

With the Web, your customers can be located anywhere in the world. If you already have an existing product or services catalogue, and a production system in place to update the catalogue, with a bit of ingenuity, an electronic equivalent of a catalogue can be created in relatively short time.

There are several significant advantages to Web catalogues over print catalogues. One is the ability to update information inexpensively at a moment's notice. If you print 50,000 copies of a catalogue, you're not going to do another,printing until you've mailed out the first batch. If there's a small mistake, a typographical error, a picture in the wrong place, no one is going to reprint the catalogue. With a Web site, mistakes can be corrected easily; and if a product gets updated or becomes "out of stock," you can make those changes.
This helps provide relevant information to your target audience. A second major advantage which the Web provides for "direct-mail" ordering is in the cost of mailing. Mailing costs often exceed printing costs. You can never be entirely sure that the people who receive your catalogue are indeed the best possible potential clients. With the Web the cost of having two million people see your catalogue is not significantly more than the cost of having 200 people see it.

The concept of an E Free-zone aggressively targets the exploding internet commerce market. Certain companies provide a complete package to merchants to offer their products throughout the world over the internet at a mere fraction of what other media's would entail. One such company, First Antilles Mercantile and Commerce Ltd., even provides offshore payment processing to the client's offshore bank account.

Until First Antilles came along with its 100% backing by First Data Corporation, offshore merchants were at the mercy of finding an US ally to process the transactions and then send the money offshore. Naturally, some onshore merchants charge upwards of 15% on sales. First Antilles, on the other hand, only would charge the normal banking transaction, plus a 2% processing charge.

Furthermore, by fully taking advantage of the Panama Offshore Business Company laws and jurisdictions, the E Free-zone blankets its clients in a virtual cyberspace free-zone which is 100% legally exempt from any taxes (sales as well as income). The internet commerce market, the Panama Offshore Business law, and Panama's safe and efficient dollar based banking community will ensure that E Free-zone is a major force in the world of cyberspace.

Factors Concerning The Panama Offshore Based Company
Panama Law No 32 of 1927 is the prevalent law concerning offshore business practices and has needed little change since its inception (a major accomplishment to its founders). Although this law was written well before the concept of computers and the internet, it is perfectly suited for the virtual world of internet commerce.

As Panama is the recognised world-wide leader in offshore business companies and ship registration, Law No 32 will also make it the leader for incorporations of internet income producing companies as well. The most important factor is that all income received outside of Panama is considered "offshore".

How The System Works
Any company located anywhere, could have a virtual Panama offshore web site that promotes and sells its products. Here is a short example of how a real company would utilise our service.

  • Bob's Custom Coffee Cup's Inc. located in Nova Scotia, Canada decides to sell its products to a world-wide market over the internet. They contact an E-Free-zone package provider such as First Antilles Mercantile and Commerce Ltd., and a site and package is custom made for them.
  • Once the site is operating, a client in Mexico decides to buy a cup from Bob's Custom Coffee Cup web site. The client places his order over the internet by using his credit card.
  • Both First Antilles Mercantile and Commerce Ltd. and Bob's CC Panama receive the order. Once the credit card is charged, the funds are transferred to Bob's offshore merchant account.

About The Author
F. T. Casey, Jr. attended University of Delaware and Nova Southeastern University. He has eleven years of banking experience, all of it in offshore banking. He is the Senior Vice President of First Antilles Mercantile & Commerce. Mr. Casey can be contacted at banking@firstantilles.com

Source: Escape From America Magazine at http://www.escapeartist.com

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