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Advertisers Dupuch & Turnquest & Co.
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New e-commerce center will make Freeport a global financial hub
The Internet, electronic commerce (e-commerce), electronic business (e-business), Web hosting and cyber transactions are buzzwords that describe the future of business. With access to a truly global market, e-commerce is revolutionizing the way business is done. The sheer impact that e-commerce will have on the way we do business has yet to be determined and already governments are looking for a way to tax the Internet.
Concerned by the potential regulatory changes, companies are looking for hosts for their Web sites and ways to grow their e-commerce without being taxed.
For this very reason, Cable Bahamas, a publicly traded Bahamian company, is planning to invest $60 million in Freeport, Grand Bahama in an e-commerce and Web-hosting facility.
Under the Hawksbill Creek Agreement, companies that are licensed by the Grand Bahama Port Authority are free from tax on income, profits and capital gains until 2015 and free from excise taxes, stamp duties and most customs duties until 2054. These advantages will position Freeport as one of the premier locations in the world to base an e-commerce operation.
About the Company
Cable Bahamas is a 68 percent Bahamian owned company started in mid-1994 with $30 million of Canadian capital. The company beat out 13 other competitors to win the government’s licensing approval.
It has been successful in recruiting a qualified workforce and has invested heavily in training Bahamian staff. It currently employs 142 people, over 65 percent of them women, and provides service to 16 inhabited islands, serving 98 percent of the Bahamian population. The company went public in June 95 and has 3,200 Bahamian shareholders.
To date, Cable Bahamas has invested $74 million in its network and it is only using 25 percent of its capacity. In the local market, Cable Bahamas has begun to offer cable access Internet service on a trial basis. It is currently testing its network while it awaits its official license to be able to offer the service. The company went public in June 1995 and has 3,000 Bahamian shareholders.
“Our stock was offered at one dollar per share, it now trades at $7.50,” said Glenn Hill, C.A., senior vice president and chief fiscal officer of Cable Bahamas.
Building the Future
After final approvals are given by the Federal Communications Commission and the Grand Bahamas Port Authority and marine surveys have been completed, Cable Bahamas will begin the steps necessary to establish the e-commerce, Web-hosting center. It will first lay 380 miles of fiber-optic cable from Boca Raton, Fla. area to Freeport, Grand Bahama and then on to Nassau, New Providence. This first phase should be completed by early fall. In the second phase of development, the cable will be continued from Nassau, New Providence to the islands of Eluthera and Abaco.
Cable Bahamas will own the only fiber-optic lines linking the United States to the Bahamas. More than that, they will own the first fiber-optic cable that links the Caribbean to the United States. “Traditionally, all fiber- optic lines have bypassed the Caribbean,” said Anthony Butler, vice president of engineering of Cable Bahamas. With the installation of their network, Cable Bahamas will have an advantage when it comes to expanding in the Caribbean.
Another advantage that Cable Bahamas has is that it is presently installing its fiber-optic and coaxial cable, not upgrading to fiber-optic lines, as is the case in so many other places. While the installation of the fiber-optic cable may cost $15 million to 20 million dollars, that is significantly less than global companies are investing to upgrade their technology.
After the fiber-optic network is installed, Cable Bahamas will construct the facility that will hold the e-commerce, web hosting operations. The entire operation is expected to be up and running by the end of the year.
“We are building the structure with safeguards and following all the same standards as e-commerce, Web hosting facilities in the United States,” said Butler. He noted that the utility services on Grand Bahama Island are as good as those you can get on the Eastern Seaboard.
“There is tremendous demand for reliable service,” he said. “Today it does not matter where you are, Cable Bahamas can provide service and our center be well located where there are lots of hotels, large businesses and most of all, in a secure, tax-free jurisdiction.”
“We will have a strategic advantage due to our location and tax regime,” said Hill. “We will have the same facilities that exist in other cities and our operation cost will be the same as our competitors,” he added.
According to Hill, the government of the Bahamas is enthusiastic about making The Bahamas an e-commerce center and is currently putting e-commerce legislation into place. “The government sees e-commerce as the way of the future.”
“The Bahamas is open for business. There has been tremendous change here in the last seven years. With increased confidence in the government, new business has come to The Bahamas, new facilities have been built and employment has been created. The Bahamas is adapting,” said Hill.
In a country that did not have cable service until 1995, The Bahamas is making up for lost time. With Cable Bahamas bringing the latest in technologies to the islands, The Bahamas will soon be seen as a global leader in the e-commerce, Web-hosting industries.
At the end of the day, it doesn’t matter where a site is hosted in cyberspace, it can be accessed globally, and Cable Bahamas is banking on the probability that companies are going to want to conduct their e-commerce and Web-hosting business in a tax-free, secure, confidential jurisdiction.
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Table of Contents The Bahamas: An established tourism and tax-free financial services center experiences a renaissance |
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