The Valley, Anguilla (dpa) – It wasn’t only sunshine all the year round that
attracted Vince Cate to the Caribbean island of Anguilla. The 36-year-old
software expert from California was looking for ways to make plenty of money
while paying a minimum of income tax.
Now he runs an Internet company called Publicdata.com which specialises in
selling access to public records from various jurisdictions, including the
police, to clients in the United States. Business is booming.
Cate is not the only business pioneer to have moved in recent years to the
little British overseas territory 250 kilometres off Puerto Rico which
counts only 10,000 people as residents.
According to Lynwood Bell, a resident Canadian banker and company
consultant, Anguilla offers the ideal conditions for Internet companies.
There are no direct taxes and companies that trade via the Worldwide Web are
flexible. They can set up a server almost anywhere in the world.
“Most people going into e-commerce don’t even consider the advantages of
having their business off shore,” said Bell. His Span- Hansa group has
helped three firms find their feet on Anguilla.
The island government is also enthusiastic about the possibilities.
At the beginning of April it set up a joint government-private sector
committee to promote electronic commerce.
“e-commerce can be the catalyst that will lift the economic and social
development of Anguilla to a new level” said Fabian Fahie who is Permanent
Secretary for Economic Development, Investment and Commerce in the Ministry
of Finance.
Anguilla now even offers to set up firms entirely via the Internet.
Not that off-shore tax havens, such as those found on Anguilla and other
Caribbean islands, are without perils for the unwary entrepreneur.
Apart from annual hurricanes, Vince Cate mentions the fact that British
telephone company Cable & Wireless has a monopoly and corresponding high
prices and that specialist equipment shops are rare.
“There is no big computer store around the street. You have to order
machines from abroad”, said Cate.
The governments of many large industrial countries also take a dim view of
the tax havens.
The Organisation for Economic Co-operation and Development (OECD) has
started a probe into whether the legal situation in the tax havens actually
constitutes “harmful competition”.
Bell believes the OECD is on a hiding to nothing in this respect. It is up
to each country to decide what taxes to levy. Anguilla may have no direct
taxes but indirect taxation is high, he says.
Vince Cate believes that sooner or later direct taxes are doomed to
extinction the world over. “I think income tax is going the way of the
dodo.”
Of course, as long as that does not happen Cate is happy to do good business
from Anguilla, where he is building a new house.
“It’s not a Yahoo or Amazon yet, but it could be some day, maybe.”
