Sovereignty arbitrage

["Lisa & Ian Murray" <seamus@xxxxxxxxxxxxx>]

TheStandard.com
Fast, Cheap and Out of Control
By Stewart Taggart


Care to bank from a Pacific Island, store your online data in Scandinavia
and pay taxes in Barbados? A nicer mix of financial secrecy, data privacy
and low government levies would be hard to imagine.

If this multijurisdictional legerdemain appeals to you, James Bennett could
be your man. He's in the business of providing, as he calls them,
"sovereignty services." For a fee, he'll slice and dice your business or
personal affairs to put them in the best mix of global jurisdictions to keep
the authorities off your back.

"Anguilla has nice privacy laws and low taxes, but they've had some scams
over there," Bennett says. "Meanwhile, Scandinavian countries aren't
financial tax havens, but they do have very strong data privacy laws and
good courts. It depends on what you're after."

Bennett, who has been mixed up in everything from commercial rocketry as
president of American Rocket Company to nanotech research as director of the
Foresight Institute, founded Internet Transactions Transnational in 1997. He
expects his Virginia-based company to be up and running by the end of this
year. Initially the company will focus on arranging the affairs of wealthy
individuals, but Bennett plans to branch out later into business services,
using virtual private networks, proprietary authentication and arbitration
methods and a system of global access points.

"The nice thing about the Internet is that it allows you to link - cheaply -
a number of jurisdictions with different characteristics," he says. "We just
aim to lower the threshold cost."

Like others, Bennett is an entrepreneur looking to make an Internet buck off
of one of our oldest activities: regulatory arbitrage.

Simply put, regulatory arbitrage involves exploiting differing rules in
different jurisdictions - for a profit. Think back to when you were a kid.
If Mom wouldn't give you a dollar, you asked Dad for one. If they both said
no, you asked your aunts and uncles when they visited. The system works in
childhood so we use it throughout our lives.

full article at http://biz.yahoo.com/st/000813/17365.html