What does this mean? How does this work? This Module constitutes a global introduction to the course. After a brief historical background, you will be provided with several useful definitions, and introduced to the reality of offshore e-commerce. You will learn about the main players, the technology required and the risks involved.

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2. Why Move Offshore?

A growing number of e-businesses are considering offshore options. Like them, there are a variety of reasons why you should think of going offshore. These reasons include the fundamental issues of asset protection, profit, and tax shelter. The tax issues are often the main motivation for e-businesses operating in high tax countries, and clearly, the financial incentives available offshore may be rewarding. However, there are a number of other considerations that are relevant when considering the offshore option. E-businesses must take into account a variety of factors before making the move. In this course, you will learn what factors should be considered before going offshore.

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3. Corporate Structure

The development of an e-business offshore requires an appropriate corporate structure, which is a real company engaging in international trade and commerce on a daily basis. The choice of an offshore corporate structure usually requires more than a simple off-the-shelf company. E-businesses must carefully plan and structure the corporate vehicle that will be used. This implies taking into account not only the needs of directors, shareholders and investors, but also accommodating every facet of the business, such as marketing, hosting of the web-site, payment solutions, banking, customer care, distribution and repatriation of profits, management and control, etc.

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4. Tax Aspects

You might consider that the basic principle in the establishment of an offshore company is simple; it is basically a question of transferring highly profitable business activities to more favorable tax jurisdictions (formerly known as "tax havens," and now called "international financial centers.") However, the reality is much more complicated, and before simply “closing shop” and re-locating to a low direct tax jurisdiction, there are a number of taxation issues that require thorough evaluation. Some of these include: (i) the notion of “doing business in a country” (ii) branch or agency, (iii) permanent establishment, (iv) withholding taxes, (v) VAT, (vi) transfer pricing, etc.

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5. Offshore Jurisdiction

Once the decision has been made to move offshore, one of the main concerns is the choice of a jurisdiction. There are plenty of offshore jurisdictions available, from exotic paradises to South American countries, and choosing among these might be confusing. In this Module, you will learn that several factors are key in determining which jurisdiction is the most appropriate for your business. These include: (i) the function that will be based offshore (e.g.: sales and marketing, treasury management, supply of financial services, supply of digital goods such as music, video, training, software, etc.), (ii) the geographical location, (iii) the telecommunications links, (iv) the business infrastructure, (v) the cost and skills of the local labor force, (vi) the local legislation on e-commerce and corporations, etc. Some popular offshore jurisdictions will be described in the course of this Module.

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6. Offshore Financial Centers

The offshore industry has developed into a major business spanning all quarters of the globe, and involving in one way or another, half of the world's financial transactions by value. Offshore financial centers are all rushing to get involved in e-commerce so they can attract technology entrepreneurs to their shores. This competition leads to a much-improved level of services. The key institution for an offshore e-commerce operation is of course a bank, and there is wide variety in the level and scale of banking operations in offshore jurisdictions. Before you make the move, you should list what type of financial services your operations require, such as (i) banking services, (ii) offshore fund management (including mutual and pension funds), (iii) professional support services, (iv) trusts and foundations, (v) trustees, (vi) administrators, (vii) tax privileges for expatriate employees and for resident foreigners, etc. Offshore payment will be specifically studied.

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7. The Regulation of Offshore E-Commerce

In this Module, you will be introduced to the different regulations and legislations affecting e-commerce, and specifically offshore e-commerce. In addition to the laws of the main developed countries, several supranational bodies are involved in the regulation of offshore e-commerce, including the European Union and the OECD. The global nature of the Internet implies that the different approaches and interactions between these different regulations must be taken into account before setting up an offshore strategy.

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8. Fraud Prevention

Many of the established offshore financial centers have experienced considerable growth over the past 10 years, but a few have suffered major set-backs arising from scandals relating to fraud or drug offences. Such events reinforced the pressure from international bodies and national taxation authorities for better regulation of international services in order to prevent illicit activities. E-businesses considering moving offshore should keep abreast of the latest “anti-offshore” developments, because these measures often carry the possibility of sanctions designed to harm the financial service sectors of the targeted offshore jurisdictions. These sanctions have a repercussion on the e-businesses established in these jurisdictions, since many of these jurisdictions adjust their tax practices and introduce new legislation. This Module will teach you exactly what practices should be avoided in order to remain on the safe side.

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9. Offshore E-Commerce Applications

This Module adopts a very practical approach and is intended at guiding e-businesses through the successive steps to be taken when going offshore. In this perspective, several typical case scenarios are presented, involving different types of activities, ownership structure, country of origin, capital structure, etc.

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10. Niches and Future Trends

There are general trends affecting the development of offshore e-commerce. With regards to taxation, for instance, it can be expected that the battle between onshore and offshore will continue until a solution is found to the problem of how to tax cross-border e-commerce transactions. Until them, the rich countries will exert pressure towards the development of regulation designed to protect them against loss of tax revenue. As a consequence, the most criticized jurisdictions should be avoided. In this Module, you will also be introduced to some activities that seem to be viable offshore e-commerce niches for the future, such as corporate online learning, offshore outsourcing, offshore distribution of digital products, etc.