E-Commerce,
Opportunities in the Island of Jersey
by
Grant Twine, Managing Director, Basel
E-Business Limited
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E-Commerce
affects all of our lives, whether it be surfing
the net, buying online or simply socialising.
Jersey, sees itself as a politically and geographically
secure offshore jurisdiction with a reputation
for entrepreneurial spirit. As such it is always
looking for the next business opportunity. Jersey
has therefore shown a strong interest in the world
of E-Commerce.
Low
Value Consignment Relief
Jersey
being outside of the EU VAT zone found itself
in a position to offer services under the Low
Value Consignment Relief (‘LVCR’).
This is a European Directive VAT exemption relief
for small parcels. It’s designed to ease
the flow of goods and reduce the burden upon customs
officers and postal delivery services when collecting
VAT on small value items. The exemption applies
to goods that are fulfilled into the EU and each
member country had the opportunity of offering
an exemption of between €10 - €22. All
but one member state opted for the higher rate
and the rates now exist as under £18 for
products fulfilled to the UK and under €22,
for products fulfilled into mainland Europe.
All
across Europe, as recession bites, consumers are
looking at saving money wherever possible, fuelling
the online shopping revolution even further. The
larger, more luxurious items; cars, holidays etc
may be temporarily removed from a consumer’s
wish lists, but the demand for smaller, less costly
products remain. These are the accessories, many
disposable, that our age of technology demands;
memory cards, phone cards, ipod accessories, ink
cartridges (to print all those digital photos),
food supplements (as part of our healthier lifestyles)
and all manner of small, low value products.
Jersey
has seen the opportunities in this marketplace
develop and has become a centre of excellence
for fulfilment, postal and related services including
web hosting, IT systems, sales management, media
marketing and professional e-commerce administration.
During the last 5 years the industry has also
been regulated to ensure that new clients have
legitimate operations and a real presence in the
island. This regulation is welcomed to ensure
that the quality of existing and new businesses
remains high and that the reputation of the island
as a centre for e-commerce is protected. It is
now estimated that there are between 1-2,000 people
employed in this industry in Jersey making it
an important part of the economy and providing
much needed employment diversification.
What
are the advantages of locating in Jersey?
-
LVCR VAT exemptions applies to goods of under
£18 shipped to the UK and €22 to
Europe.
-
Close proximity and access to both the established
UK and rapidly growing European market via the
well established and well run postal services.
- Concentration
of professional, experienced service providers.
- More
favourable regulations than in the UK and mainland
Europe.
With
the impending rise in UK VAT to 20% on the 1st
January 2011 and rates just as high across mainland
Europe; France 19.6%, Germany 19%, Belgium 21%,
Ireland 21.5%, Sweden and Denmark 25%, the competitive
advantage that can be gained is considerable.
Intellectual
Property (‘IP’)
Another
area of e-commerce that Jersey has recognised
is the growing complexity and importance of protecting
IP. After years of consultation Jersey is now
in the final stages of updating its IP laws so
that Jersey can be seen as a centre of excellence
in the protection of IP.
Part of the attractiveness as a jurisdiction for
IP related business will mean achieving compliance
with international conventions and agreements
in the relevant areas. Two areas are particularly
important, the Trade Related Aspects of Intellectual
Property Rights Agreement (TRIPS), which is administered
by the World Trade Organisation, and the Paris
Convention for the Protection of Industrial Property.
Jersey has looked at three areas of IP:
-
The draft Copyright (Jersey) Law
- The
draft Design Right (Jersey) Law
- The
draft Performers’ Protection (Jersey)
Law
These three laws have now been restructured into
a single law, the ‘draft Intellectual Property
(Unregistered Rights) (Jersey) Law (referred to
as ‘IPURL’).
This draft legislation is currently going through
the legal process in order to be effective in
early 2011. Basel E-Business is ensuring that
it will be in a prime position to offer IP rights
holding vehicles as soon as the legislation is
in place.
e-gaming
Online
gambling or ‘e-gaming’ is another
rapidly growing industry and one which calls for
a high level of regulation. Jersey already offers
business continuity services in respect of e-gaming
and now a number of large players within the industry
have recognised Jersey’s international reputation
and have shown an interest to set up operations
here. Jersey has been looking at this industry
for some time and whilst historically it has been
a step or two behind the likes of Alderney and
Guernsey it has now drafted new legislation that
is being processed through the legal system and
is expected to be effective late 2010. This will
offer a real alternative to e-gaming businesses
to be able to locate to one of the strongest and
most respected offshore jurisdictions in the world.
The Basel Group is an independently owned Trust
and Company Service provider and can consider
itself one of the leading companies providing
e-commerce solutions. Basel recognised the growing
importance of the e-commerce market and incorporated
its subsidiary Basel E-Business Limited in 2008
to focus and specialise in offering E-Commerce
solutions. Basel E-Business Limited has now assisted
over 40 online companies and has placed itself
at the forefront of e-commerce developments.
Grant
Twine is Managing Director of Basel
E-Business Limited providing corporate structures
and management services for online companies in
Jersey, Guernsey and Switzerland.
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