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E-Commerce, Opportunities in the Island of Jersey

by Grant Twine, Managing Director, Basel (UK) Limited




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.

E-Commerce Trading

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 an important part of the economy and provides much needed employment diversification.

What are the advantages of locating in Jersey?

For online businesses physically retailing goods - by moving your e-commerce business offshore you could benefit from:

  • Low Value Consignment Relief (‘LVCR’) exemption from VAT.
  • Close proximity and access to rapidly growing European markets and the conventional UK market via established and well run postal services.
  • Concentration of professional experienced service providers.
  • More favourable regulations than in the UK and mainland Europe·

Jersey being outside of the EU VAT zone found itself in a position to offer services under 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 the rates now exist as under €22 for products fulfilled into mainland Europe from the CI and under £15 shipped into the UK from other non-EU jurisdictions.

In addition, there is an opportunity to benefit from reduced direct tax rates.

For online businesses providing digital services - there is an opportunity to benefit from reduced direct tax rates.

Opportunities in Europe

With the VAT rate in the UK at 20% and rates just as high across mainland Europe; France 19.6% (21.2% from the 1st October 2012), Germany 19%, Belgium 21%, Ireland 23% (from the 1st January 2012) and Sweden and Denmark 25%, the competitive advantage that can be gained is considerable.

Here at Basel, we work closely with an established network of international service providers and are well positioned to organise fulfilment operations into mainland Europe from the Channel Islands. In addition, we can now arrange distribution solutions into the UK and to mainland Europe from other centres outside the EU to take advantage of both VAT and Corporate taxes benefits and therefore increase your competitive advantage.

In conjunction with fulfilment providers ProFS and international postal operator Swiss Post, Basel eBusiness Solutions recently co-presented a Swiss Day event in Zurich aimed at highlighting the opportunities and explaining the benefits of the distribution solutions available from Switzerland.

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 passed in March 2011 which enabled a full licensing framework for the island. This offers 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 eBusiness Limited in 2008 to focus and specialise in offering e-commerce solutions. Basel eBusiness Limited has now assisted over 60 online companies and has placed itself at the forefront of e-commerce developments.

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 and the States of Jersey law office is tasked with applying to and satisfying the conditions of these treaties in order that Jersey’s IP registrations are recognised globally.

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 2012 and Basel eBusiness is ensuring that it will be in a prime position to offer IP rights holding vehicles as soon as the legislation is in place.

Grant Twine is Managing Director of Basel (UK) Limited providing corporate structures and management services for online companies in Jersey, Guernsey and Switzerland.

Offshore solutions for your online business

Basel eBusiness is a division of the Basel Group and is a leading authority in offshore e-commerce corporate structures and offshore management. Our wealth of experience with online trading companies means we are ideally positioned to assist with establishing your operations in Jersey, from the initial licence applications to the, formation, migration, management and ongoing administration of your e-commerce business locally.

[Read more about Basel]


Jersey Industry Insight

E-Commerce, Opportunities in the Island of Jersey
by by Grant Twine, Director, Basel eBusiness Limited



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