With plummeting tech stock markets, de-listings and the disappearance of many prospective dot.com start-ups, embarking on an e-business venture may not look quite as attractive as it once did. This has not, however, stopped many jurisdictions from touting their relative merits as operational hubs and centres of excellence for e-commerce.

The simple fact is that business fundamentals remain as applicable to success in the e-business environment as much as for more traditional industries, but professional support, experienced partners and effective business management advice is what many fledgling companies have lacked. A new initiative in Bermuda aims to plug that gap. The eVentureCentre (eVC) is a Bermuda-based e-commerce incubator providing investment capital, infrastructure, administrative and technical services. A joint venture between technology provider Paragon Ltd and Centre Solutions, the eVC provides premises, capital, hosting facilities and technology support, and takes entrepreneurial start-ups through system implementation, beta testing and ‘going live'.

In addition, Bermuda is home to Wired Atlantic Ltd, a venture capital firm that invests in early to middle-stage technology, internet-related and e-commerce companies. Other venture capital opportunities exist in Bermuda for technology specialists including access to leading brokers such as Schroders.

Stepping stone
Another significant way Bermuda can assist in offering companies a better chance at prosperity is through a listing on the Bermuda Stock Exchange's mezzanine market. The harsh lesson that many companies have learned the hard way is that an initial public offering (IPO) – and even a Nasdaq listing – can be onerous, particularly in the current e-averse environment. The preparation process can make severe demands on the time of senior management, often encompassing the preparation of disclosure documentation, due diligence, pre-float PR blitzes and road shows. By contrast, the stepping stone of the BSX's mezzanine market is designed to give companies access to institutional money and the prestige of a listing, without having to comply with restrictive IPO regulations designed to protect the interests of small retail investors. A listing on the mezzanine market can give a company breathing space to prove out its business plan, consolidate its assets, and put in place the right infrastructure and management team to start generating revenues and profits in readiness for a full public float.

To back up these offerings, Bermuda is home to a wide range of enabling services, products and a sophisticated business environment, comprising highly sophisticated risk transfer, e-commerce and investment communities.

In recent times, these communities have received the seal of approval from a number of international initiatives investigating offshore practices.

The requisite skill sets for operating, managing and facilitating e-commerce are already inherent in Bermuda's existing infrastructure of service provision; the island's lawyers are acknowledged as second to none with regard to their understanding of offshore e-commerce legislation. At the same time, the major accounting firms have been in Bermuda servicing international business for decades and all offer dedicated e-business consulting. But Bermuda, as with the rest of the world, is overshadowed by the spectre of labour shortages in specialised industries, and information technology experts particularly are in high demand.

Nevertheless, the island's law and accounting firms are all supported by a myriad of related service providers. These include an array of web design companies, IT consultants, internet service providers (ISPs), application service providers (ASPs), computer hardware and software vendors, and internet transaction gateway providers. Bermuda-based internet payment systems provider First Atlantic Commerce is a prime example of this, and is proving to be a world leader in offshore transaction processing.

Many of the professional firms also offer ancillary services such as company formation, as well as helping clients to select the right partners. And in the pioneering spirit of the island, Bermuda is home to one of the world's first online electronic incorporation services via local law firm Appleby Spurling and Kempe, which offers an internet-based service, Just AS&K [Inc], for registering companies either in Bermuda or the Cayman Islands.

While many of the world's ‘wired' economies continue to debate appropriate approaches to electronic commerce regulation, Bermuda has already implemented a legislative framework that protects the interests of consumers and business, as well as the reputation of the jurisdiction itself.

Specifically, the adoption of the Electronic Transactions Act (ETA) of 1999 and the Standard for Electronic Transactions or Code of Conduct of 2000 have offered predictability, security and confidence to e-business providers and customers in Bermuda.

This pioneering legislation and regulation has laid the foundation for the conduct of electronic transactions and is in step with international e-commerce standards. Bermuda's e-commerce legislation has been specifically designed to reflect the United Nations Commission on International Trade Law (UNCITRAL) model law on e-commerce, the EU parliament and Council legislation for electronic signatures, the EU safe harbour principles for data protection, and ‘best practice' legislation found in other jurisdictions.

Bandwidth has become an increasingly important issue internationally, but Bermuda has circumvented any potential problems by playing host to part of Cable & Wireless's extensive network. Cable & Wireless's Bermuda campus offers four diverse routes of fibre optic cable and satellite, and has a completely redundant power supply located at one of the highest points on the island, with full security and capable of withstanding the very worst weather conditions.

In addition, TeleBermuda International has a pipe running from New Jersey to Fortaleza, Brazil, which comes directly into its hosting facilities located in a bombproof shelter in Bermuda's technology park in Southside St David's. More simply, Bermuda is currently connected to the world via Cable & Wireless and TeleBermuda, with more than enough bandwidth to cover 15 million simultaneous voice and data connections.

Good company
The company you keep can have a significant impact on your business profile. Bermuda's ‘Know Your Customer' philosophy is vigorously enforced by both business and government, ensuring that only legitimate business is conducted on the island. Bermuda maintains a fundamental belief that quality in the international business world is more important that quantity. This more substantive approach to business has ensured the island's reputation remains pristine in the eyes of the international business community as well as with international regulatory oversight organisations, such as the Organisation for Economic Co-operation and Development's Financial Action Task Force.

Bermuda has been developing its international business infrastructure – and, vicariously, its e-commerce infrastructure – for many decades and is a proven jurisdiction. Converging the worlds of e-commerce and insurance, Bermuda's development has attracted the likes of DotRisk, Worldinsure.com and insurE-com Ltd.

As an internet specialist for the insurance industry, insurE-com develops secure business-to-business internet systems to improve the flow, control and management of insurance information across the industry, whilst simultaneously reducing acquisition and operational costs. Worldinsure Ltd, which recently raised $31m in its second round of financing, provides automated insurance processing services for medically underwritten products. Via its Bermuda headquarters, the company employs a secure e-commerce platform to streamline procedures, increase speed, lower costs and improve margins.

Reflecting Bermuda's position within the international re/insurance community, several Bermudian insurers have joined WISe, the worldwide insurance e-commerce initiative designed to provide an open, collaborative platform for international e-commerce trading. WISe is open to direct insurers, reinsurers, brokers and other insurance intermediaries, and is designed to reduce processing and administrative costs.

In addition, Bermuda plays host to the World E-Commerce Exchange (WECX), an internet contracts exchange which affords its members the benefits of a Bermuda domicile.

The substance of Bermuda's business communities are borne out by statistics: Bermuda is the third largest insurance market in the world following New York and London; last year, more than 1,500 international insurers were recorded on Bermuda's register; and almost 100 new insurers joined the register in 2000. The bare bones estimate is that there is over $42bn in reported funds domiciled and/or custodied in Bermuda. Last year, the number of new technology and e-commerce related companies approved to do business from Bermuda increased by over 150%.

The facilitative partners, tax and regulatory regime, enablement services and conducive business environment all blend together to ensure that Bermuda has the capital, both financially and intellectually, to create solutions that transcend the boundaries of the electronic, insurance and financial worlds.