Web hosting service provider Netcetera is touting the benefits of its tax efficient hosting option for e-businesses, thanks to the location of its data centre facility on the Isle of Man.
The Isle of Man is located in the Irish Sea, off the western coast of the British Isles. The Island is best known for hosting the world's most dangerous motorbike race (the TT), but is actually a self-governing territory of the British Crown and a country in its own right. It has its own parliament (Tynwald) and is not part of the United Kingdom, although it relies on the UK for defence and foreign representation.
However, the Island has also acquired a reputation as something of a tax haven, thanks to a zero rate of corporate tax and a maximum personal rate of 18 percent, which is capped at £100,000 ($148,000). UK companies in contrast are taxed at 30 percent corporate tax, and shareholders are taxed at a further 25 percent on the distribution of post tax profits, meaning UK companies are subject to a total effective rate of 47.5 percent.
This makes the Isle of Man, according to Netcetera, an attractive hosting option for online or e-businesses because they could be more easily incorporated on the island and online sales can be transacted offshore.
"Of particular interest to e-Business and internet-based enterprises is the fact that the island is an established low-tax area enjoying total independence from the UK on matters of direct taxation," said Peter Skelton, managing director of Netcetera in an emailed response.
He feels that the island has three points that prove to be attractive for businesses. "Power - the island has 3 of the most modern power stations in the UK and produces excess power which it in turns sells to the UK grid," he said. He also cited security (small islands, according to Skelton, have a natural security because they are bounded by the sea, with limited points of access and egress) as well as connectivity (the island has resilient high capacity fibre optic cables connecting it to the North of England and Northern Ireland).
Of course, traditional businesses would struggle to move their management, staff, and operations to the Isle of Man in order to take advantage of its favourable tax regime, but for online or e-businesses, Netcetera feels it is a much simpler option for them to incorporate their business on the island, especially as the key profit making aspects (ie sales transactions) can be done offshore.
"By hosting the web presence with an Isle of Man-based service provider, online sales can take place offshore and will be taxed at zero percent," said Netcetera. Of course in order to achieve this, online businesses would also have to ensure that their board meetings take place outside the UK, central management and control of the business must be offshore, and no business can be transacted in the UK.
Netcetera's main facility is a Tier 4 facility on the Isle of Man called the Dataport, which is a converted industrial diamond factory, in which it has invested heavily thanks to the growth in demand from the e-gaming and e-commerce industries.
The 16,000 square foot Dataport facility offers 700 plus rack hosting capacity (approximately 28,000 servers) and the usual data centre options such as a scalable and redundant power and cooling systems, raised flooring, and 24x7 technical support etc. Two onsite diesel generators can run the data centre for at least 96 hours (four days) in the event of an extended power outage.
Besides its managed hosting offering, Netcetera also offers co-location, managed network, and managed security services.