What Is Offshore Hosting?

Offshore web hosting is the practice of hosting a website on servers located outside one’s own country. Usually, this is done to gain specific benefits.

Technically, anytime you host a website on foreign servers you are engaging in offshore hosting. However, the term implies doing so deliberately to achieve some specific goal, usually related to privacy, security, free speech, or freedom.

5 Reasons to Use Offshore Web Hosting

Most offshore hosting needs fall into one of a handful of categories. Some businesses require one, others require all perks. Depending on the nature of the business, individual needs do vary. These are:

  • Freedom of Speech
  • Freedom of Press
  • Avoiding Local Regulations
  • Taxes and Legal Residency
  • Anonymous Services

Let’s explore these reasons for hosting offshore.

Freedom of Speech

If you are going to host controversial content of any sort, there is a risk. There is a possibility you will run afoul of some law, regulation, or cultural norm. The risk of punishment in the form of jail time, fines, and lawsuits, isn’t your only worry.

It is usually the case that offended authorities would seek to remove your content from public consumption. By serving your content from a country with robust protection of freedom of speech, you are more likely to be able to avoid having your content forcibly taken down.

Freedom of the Press

A good example of this is the site WikiLeaks. WikiLeaks releases classified government documents to the general public. If they were hosted in the United States, or in most other countries, the US Government would have shut them down by now.

However, their hosting servers are in Sweden, a country which has an extremely solid protection of the freedom of the press. The Swedish government cannot legally compel WikiLeaks to divulge their sources. They cannot forcefully take their site down either.

Freedom of the Press

A good example of this is the site WikiLeaks. WikiLeaks releases classified government documents to the general public. If they were hosted in the United States, or in most other countries, the US Government would have shut them down by now.

However, their hosting servers are in Sweden, a country which has an extremely solid protection of the freedom of the press. The Swedish government cannot legally compel WikiLeaks to divulge their sources. They cannot forcefully take their site down either.

Avoiding Local Regulations

In the US, selling certain pharmaceuticals directly to consumers without a prescription is illegal. In many Asian countries, online gambling is strictly prohibited. A wide number of jurisdictions have regulations concerning pornography.

Choosing the Right Jurisdiction

In these cases, the best option (other than not engaging in those activities) is to host your website somewhere where those types of businesses are not illegal or where the regulations and penalties are not as strict.

What is interesting about this is the cross-pollination of offshore business hosting. People in the US often set up their gray-market pharmaceutical sites in Asia, and Asian entrepreneurs host online casino sites in the US.

Taxes and Legal Residency

The actual legal ramifications of this are far outside the scope of our expertise, so we’ll steer clear of specific examples. However, it seems that some people use offshore hosting to establish a legal business presence for tax advantages, or other benefits.

To name a few, popular offshore hosting locations for Tax Benefits include:

  • Bermuda
  • The Netherlands
  • The Isle of Man
  • The Cayman Islands
  • Monaco
  • Switzerland

There are much more to name, however, the above is part of some of the most popular tax havens to date.