Security and Anonymity
Online Business Privacy
Tools & Resources
There are many reasons to seek the Internet privacy and
anonymity while running business. Many small and mid-size businesses are
migrating now offshore (big guys always were there), taking advantages
of low tax environment and liberal laws. Internet makes it possible to
manage offshore business from any part of the world, covering all the
aspects of company functioning: emails, faxes, phone calls diverting,
voice mailboxes and autoresponders, online banking, web presence, etc.
Because of today’s Internet technologies you can build 100% virtual presence
in a chosen offshore jurisdiction, and no one will be able to determine
where your actual office is located. Unless you will forget to take care
of your Internet anonymity…
Before we explain the importance of Internet privacy for offshore company
owners let us find out why the majority of open-minded entrepreneurs are
going offshore. Here are some major reasons.
To get tax benefits and asset protection. Running Internet
business through the offshore company will allow you to save on taxes.
Most offshore jurisdictions have no tax on income, tax on sales, corporate
and property taxes. Offshore companies are ideal vehicle for running Internet
business, international trade, financial services, insurance business,
software development, etc. It should be noted that tax avoidance is not
the same as tax evasion. There are many ways to run an offshore company
legally and save some part of taxes, offering better prices then competitors
can offer. Also, offshore banking can provide strong asset protection
and offer better investment options for your hard earned money.
To get protection from most of lawsuits. Locating your
Internet business offshore will allow avoiding many annoying lawsuits,
saving your time and money. It takes much more time and it is much more
complicated and expensive to sue an offshore entity. Running business
offshore provides protection against the “your-hot-dog-was-too-hot-and-I-will-sue-you-to-get-the-compensation”
lawsuits, making them not profitable for the lawyers working on contingency.
Also, when running business offshore your company is acting under the
law of the offshore jurisdiction, in most cases far more liberal then
in “onshore” jurisdictions.
To bypass domestic business regulations. Large part
of profitable businesses like gambling, adult services, and financial
advice services are restricted or require expensive licenses in most of
“onshore” jurisdictions. You should remember, that what is not allowed
or expensive in your home country can be legal and cheap in other countries.
Obtaining gambling license in offshore jurisdiction takes less time and
is less expensive, and some business activities do not require licensing
To get better prices for products and to get more customers.
Providing the information on where is your business located can affect
product price, and even affect the amount of clients you may have. For
example, you are in software development business and your developers
and management staff are located in India. Most of your clients will not
wish to pay US prices for the products developed in a country with low
development costs, i.e. in the country with low prices on job market and
low living standard. Many problems can arise because you business is of
the African or Eastern European origin. Some clients do not wish to deal
with companies registered in African countries or other “risky” countries.
And the last but not the least are privacy concerns.
Offshore jurisdictions offer privacy protected by law both for business
owners and their customers. Domestic law regulations and reporting rules
can make it impossible to run business when the customer privacy is an
issue. When your customers need privacy or it is required by nature of
your business, you should consider using an offshore company.
Moving business offshore offers huge benefits for business owners. Unfortunately
not all engaged into offshore business are realizing risks associated
with it. We will leave the questions of privacy with registering offshore
companies, opening offshore bank accounts and offshore merchant accounts
to offshore professionals, and focus on online privacy issues. Quite often
offshore business owners do not care about security and privacy of their
Internet communications. And this can be the fatal mistake. A single email
message with the real IP address or a single fax sent over the unencrypted
connection can ruin the privacy of the offshore funds owner spending huge
amounts into development of complicated schemes with offshore companies
and offshore bank accounts.
Many offshore business owners have suffered serious damages when ignoring
the online privacy issues. If you wish to protect your offshore business
and yourself, you have to think about security of your Internet communications
before it is too late. Below are the main points you should take into
consideration when establishing your offshore company Internet presence
or using Internet for communication.
- Anonymous domain registration. Having own domain
name is a must for a business. Using own domain in emails, having the
web site you can refer to, will add credibility to your business and
will add customers for you. But when registering a domain you will have
to state clearly the domain owner, and this information will be available
to public. Providing your real identity will break your privacy, since
by running WHOIS query any curious can find out the domain owner’s name
and address. To protect their online privacy some people are registering
domain names on fictitious names. Right, registrars in most cases do
not verify domain owner’s details, but it is unwise to register domain
name on nonexistent person or company. There are cases in business practice
when you will need to confirm that domain is yours: when you need the
SSL certificate for your online store, or when you need to sell it for
example. The only solution to gain privacy and to preserve your rights
on the domain is to register new or transfer existing domains to the
offshore company with nominee directors and shareholders. How anonymous
is it? Offshore company registration agent will know the identity of
the real shareholder (it is a general requirement in this industry),
but government authorities in the offshore jurisdiction will have records
with nominee’s personal details only. Unless you commit a serious crime
indeed, you will be safe from tracing.
- Offshore hosting, offshore dedicated hosting, offshore collocation
services and offshore email hosting. When you already have
your domain name registered anonymously on your offshore company, or
you just planning to do so, it is time to think about offshore hosting
for your domain. Offshore hosting can be the only option for many businesses
limited by domestic legislation. Adult sites, gambling sites, offshore
investment companies, international trading companies using tax saving
schemas, all of them need offshore hosting. As a general rule, when
you run an offshore business, you should consider using offshore hosting.
Even of you do not need a web site for your domain, you can use offshore
email hosting to secure your email correspondence. Companies providing
services with intensive network and computer resources usage can take
advantage of offshore dedicated hosting and offshore collocation services.
When choosing a jurisdiction for your offshore hosting you should check
for the established electronic privacy laws and modern network infrastructure.
Some countries do not have laws that regulate ecommerce and Internet
activities, and this can add some uncertainty in future for your business.
A good example of jurisdictions with developed electronic privacy laws
and network infrastructure can be Bahamas and Malaysia.
- Protecting your Internet communications. Running
offshore business requires performing various tasks online. This can
be online banking, uploading files to the website, emailing to customers
and business partners, sending/receiving faxes and voice messages, etc.
Doing all this in privacy without providing your real IP address (e.g.
identity) is of prime importance. Please read about the details, which
can be determined from your IP address on our "Internet Privacy" page. As
we have noted earlier on this page, revealing your real location can
bring your business to success or failure. Other threat you should count
with is data interception. Government agencies are widely using Internet
monitoring systems like Carnivore or Echelon to locate the persons using
online banking with offshore banks, offshore e-currency services or
offshore investment companies. Once you are on a list of “suspected”
in using offshore financial services, all your Internet communications
will be monitored: emailing, browsing, ICQ, web pages uploading via
FTP, etc. After they collect enough evidences they will visit and question
you. We have covered Internet monitoring in deep on our "Data interception"
page. Fortunately Internet data communications can be protected quite
easily by using anonymizing services supporting encryption. You may
learn more on how to protect your online activities on our Internet Security Solutions
page. Here we will stress again that you should avoid
using US based anonymizing services. They can be monitored by government
agencies in the first place. Other important Internet service that is
used extensively by offshore entrepreneurs is email. When you use “fax
to email”, voice mailbox services, communicating with your offshore
banker or offshore broker over the email you should take care of your
email security. Government monitoring systems can monitor the email
traffic by destination or by keywords, adding you to the “suspected”
list. You may read our "Email Security and Anonymity" page to learn how to protect your
confidential emailing. When choosing the anonymizing service you should
avoid partial solutions or services not utilizing encryption. Only protecting
all aspects of your Internet communications with strong encryption algorithms
can give you peace of mind.
- Using e-currency payment solutions. Most of e-currency
providers are registered offshore and providing high financial privacy
protection for both buyers and sellers. Although you should be ready
to undergo the account due diligence if the account exceeds some turnover
level. To pass the due diligence procedures the account should not be
registered on fictitious names. If you have an offshore company, register
e-currency account on it. Just to remember, always use anonymous web
browsing techniques to manage e-currency accounts online. Even if you
work with SSL protected pages, government agencies that perform data
interception will be able to find out that you are using e-currency
and ask the questions you would not like to answer.
- Local computer security. Local computer protection
is an integral part of the efforts to protect your online privacy. Failing
to protect your computer from viruses and network attacks can result
in serious damages for your business and privacy. Data loses, stolen
confidential documents, stolen access details to your offshore bank
account or offshore investment account – all these problems may arise
if your computer protection is ignored. What measures you need to take
to ensure protection for confidential data on your computer hard drive
and removable media? Firstly, you should take care of your network security
by installing a personal firewall on your computer. It will protect
from network attacks, network worm viruses and some trojan viruses.
Secondly, consider using good antiviral application. Antiviral software
should be able to detect and remove not only known viruses, but also
warn about suspicious activities and software on your computer. This
ensures that viruses like "Magic Lantern", an FBI program
that can monitor keystrokes, can be detected. And thirdly, use encryption
for all your hard drives and removable media used for backups (you are
doing backups regularly to protect from data loses, don’t you?). Do
not use “folder hiding” software, it can be cracked by kids with one
month of computer experience. Do not relay on “boot protection” utilities.
When disks with such a protection are removed and installed on other
computer as a “slave” drive, data on it can be read like a morning newspaper.
Do not relay on data wiping utilities. Using special technologies on
examination remanent magnetism (this technologies are available to government
agencies) even files wiped ten times can be restored. The only way to
protect data when your computer is stolen or can be accessed without
your knowledge is to encrypt it in whole including system areas, not
only selected folders or drives. Only the person knowing the password
will be able to boot the computer protected in this way and access data
files. More details on choosing the right software to protect your computer
can be found at our "Computer Security" page.
And a few last notes. Do not save on your online privacy and security.
You should remember that a penny saved on this could make your business
loose thousands. Always include the expenses on Internet anonymity into
your offshore company business plan. Gaining Internet anonymity and protecting
Internet communications from interception is much the same as protecting
money both for the offshore company owners and average Internet users.
The main point in going offshore is to find the jurisdiction where you
can run business legally (what is illegal in your country can be legal
in some other countries) with minimal costs (cutting business running
costs on taxes and license fees) and minimal regulation requirements (saving
time and money on paperwork). But there are activities prohibited by law
in all countries. Individuals and companies that are engaged in fraud,
spamming or child pornography will never have peace. No anonymous services,
offshore companies and offshore hosting will provide protection for the
business of this kind. But when you run legitimate business in offshore
jurisdiction and take all the measures to protect your Internet privacy,
you may feel secure.