I just returned from New Zealand a land known for its geographic isolational where I met with one of the nationals premier web development firms. While the work done in New Zealand is on par with the best in the world, the price based upon current currency disparity makes it anywhere from 35- to 40-percent less expensive. Savvy e-marketers should look beyond the proximity of any opportunity when making any cost-benefit decisions. Prior to my voyage I attended the sixth annual E-Commerce Best Practices Conference.
As usual, this years program addressed a wide array of current issues facing the e-commerce industry, an industry that has shattered any remaining business barriers caused by geographic isolation. They covered user-generated content, and the monetization of both that and other social media. On the legal front, we learned about the issues surrounding minors online activities, e-commerce patents, content aggregation and trespass issues, new threats to cybersecurity, as well as cutting-edge litigation strategies for online businesses. E-commerce companies were advised about affiliate marketing over the Internet, doing business in China. We were educated about best practices for U.S. Internet companies establishing online stores in other jurisdictions.
My general impressions were that the world we are living in is indeed flat. E-tailers are no longer constrained by geographic locations. Rather, a reasoned analysis could open a plethora of money-making opportunities based upon a number of factors.
DLA attorneys analyzed existing federal tax code for guidance relevant to the types of businesses the RTPark is ideally set up to serve and attract (given one of the largest concentrations of global bandwidth and an historical role as a crossroads of commerce).Â Several business models with standing income sourcing guidance were found, and they approached the Treasury in May and June of 2006 seeking its affirmation that the RTPark interpretation of federal law was correct. The Treasury responded favorably with temporary regulations in September 2006. Then, in April 2008, the Treasurys permanent regulations were issued. Because USVI is a territory of the U.S, additional benefits of USVI-based e-commerce efforts include FDIC insurance as well as jurisdiction and IP protection under U.S. federal law.
So what does this mean for electronic retailers offering the above-mentioned kinds of online products? Up to 90-percent federal tax savings for income sourced in the (near-shore) USVI. These impressive benefits are all the more valuable given the administrations recently toughening stance on off-shore corporate tax savings.
As is often the case, identical companies can significantly increase their value simply by the locations they choose to source portions of their activities from.
Steve Rohrlick is the master marketing agent for ECommerce Island, otherwise known as St. Croix, the largest island in the U.S. Virgin Islands, where superior infrastructure and tax benefits under the U.S. flag offer an ideal new home for eCommerce businesses.