Offshore Web Accounts?

Posted: 2nd September 2015 10:09

We have all heard of offshore bank accounts and their use to evade taxes; however, there are many reasons to offshore your web accounts as well. Offshoring your hosting for your website can keep data more confidential and secure, among other key factors that make this type of hosting an appealing option.
The Terminology
Because there are many terms thrown around that make the offshore waters a little murky, it would be best to start with some definitions. Offshore is pretty straightforward: when the server that hosts your website is located in a different country than your business. However, other concepts, like the difference between fair dealing and fair use, for example, are less straightforward.
Countries like the United States that are governed by fair use practices place "limitations and exceptions to the exclusive right to the author of a creative work" while also permitting "limited use of copyrighted material without acquiring permission from the rights holders." Countries like Canada or the UK using fair dealing practices, place similar limitations and exceptions, but offer "an enumerated set of possible defenses against an action for infringement of an exclusive right of copyright." For a full summary of UK copyright laws, see here .
Ultimately, copyright laws are similar but differ between countries, so it is very important to pay close attention to local laws in the location of your offshore host provider to make sure that you are not infringing on any local laws or copyright.
Why Host Offshore?
There are many reasons to host offshore, the majority of which are upstanding and legitimate.

Often, businesses within developed countries will host offshore in developing markets to be closer to this emerging market base, as well as to reduce operational costs – the same way companies reduce production costs by offshoring manufacturing.

Businesses in developing countries, on the other hand, will often choose to host in developed countries and established markets in order to receive secure and reliable service. Particularly if a business is located in an area prone to natural disasters or unreliable internet connectivity, offshore hosting can prevent data loss and the business’ website going down, which in turn can prevent lost revenue.

The closer your server is to your target market, the quicker your webpage will load. Often, offshoring a server is an economically sound investment for a business trying to tap into foreign markets.

This can matter in regards to free speech as well as privacy from prying governmental legislation. Ultimately, wherever your host provider is, the laws of that country are in effect. If you are a company based in the U.S., though, and have your host provider in another country, then your content cannot be blocked, taken down, or altered in any way based on U.S. laws.
Moreover, some locations offer greater privacy from identity thieves and hackers by making your information harder to find. For further privacy and to reduce the risk of hackers and other hostile activity, creating an anonymous offshore hosting account is an option as well.

Nomad Capitalist offers a list of the 5 best countries to host a website for data privacy. Within this same article they point out that even though the U.S. has "most of the world’s top web hosting companies, those companies are subject to increasingly draconian anti-privacy laws," and they also "host more malware than any other country." Nomad Capitalist goes on to explain that "hosting your website within US borders could pose a serious risk to your data privacy, especially if you publish things the US government doesn’t like."

If you want to know more on this subject, see our Intellectual Property Exclusive Q&A