What Is Offshore Hosting?
Offshore web hosting is the practice of hosting a website on servers located outside of 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 in order to achieve a specific goal, usually related to privacy, security, free speech, or freedom.
Saving Money by Globalization
Our contemporary economy is rooted in globalization.
If it is cheaper to make t-shirts in one country than in another, you can be sure there are a huge number of people moving their t-shirt making operations there. It makes economic sense.
Government Interest in Business Activities
Another fact of life is government interest in pretty much every activity of human life. Business and communication are at the top of their list.
Through regulations, taxes, censorship, and criminalization, governments of all countries make it difficult (or, at least, less profitable) to engage in certain types of businesses or say certain types of things.
Advantages of Anonymity and Offshore Hosting
Hosting your business website(s) abroad is a big decision. Businesses and individuals often use offshore hosting in order to reduce legal risks.
Let's take a look at the overall advantages and disadvantages of anonymous and offshore hosting:
5 Reasons to Use Offshore Web Hosting
The goals of offshore hosting typically include:
- Freedom of Speech
- Freedom of Press
- Avoiding Local Regulations
- Taxes and Legal Residency
- Anonymous Services
Let's explore these in greater detail.
Freedom of Speech
If you are going to host controversial content of any sort, there is a possibility you will run afoul of one or more country's laws, regulations, or cultural norms.
The risk of punishment in the form of jail time, fines, and lawsuits, isn't your only worry.
Authorities in dictatorial countries may seek to remove your content from the internet.
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 WikiLeaks was hosted in the United States, the US Government would have shut them down.
However, their hosting servers are in Sweden, a country which provides liberal protection of speech freedoms.
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.
Expect to see a variety of effects from such decisions. For example, Americans may set up gray-market pharmaceutical sites in Asia, and Asian entrepreneurs may 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 advantages include:
- The Netherlands
- The Isle of Man
- The Cayman Islands
Some offshore hosting companies provide completely anonymous service, which means that no identifying information needs to be provided by the customer who wishes to create an account.
Payment is made through Bitcoin or cash, and communication is handled strictly through an anonymous e-mail account.
Problems With Offshore Hosting Strategies
While moving hosting to a country where the content or business activity is legal is helpful, it doesn't always provide complete protection from regulation.
Being Aware of Local Laws
Let's say for example that I want to set up a gambling site, and I live in a country where this activity is illegal.
I could host my online casino site from servers in the Isle of Man, where gambling is legal. However, because I would still be engaged in activities on my website (such as updating content or responding to email), I may still be breaking my local laws.
By all means, if you are considering offshore hosting, be extremely cautious.
5 things to watch out for when selecting an offshore host:
- Knowing Location Restrictions - just because you are registered or hosting abroad, doesn't mean you are not breaking the law;
- Research - Do your homework on your host's location prior to committing;
- Industry Check - Various industries may have internal laws which prevent you from carrying out your planned business process;
- Privacy - Many hosting providers claim 'anonymity', ensure it is legitimate anonymity and not just a marketing promise;
- Payment - Fiat currencies can be tracked, some cryptocurrencies are a great way to pay for hosting when you're attempting to stay under the radar.
Knowing Location Restrictions
We have established that just because you are registered or hosting abroad, doesn't mean you are not breaking the law.
There are of-course loopholes to be found, but you can still be incriminated.
Do your homework on your host's location prior to committing. Most jurisdictions are entirely different, both in the structure of law and tolerance. Spend some time researching your selected offshore locations.
Similarly to exclusive jurisdiction laws, various industries have their sets of rules to be followed.
Internal laws can prevent you from carrying out your planned business processes.
Many hosting providers claim features and benefits of 'anonymity.'
Ensure it is legitimate and not a marketing tactic. Should you be required to provide your usual details, it's unlikely to be real anonymity.
Fiat currencies can be tracked. Cryptocurrencies are a great way to pay for hosting when you're attempting to stay under the radar.
The main reason people engage in offshore hosting — seeking freedom from government intrusion — is the root of the danger.
Governments that want to intrude on your activity will usually figure out a way to do that. Offshoring is no guarantee that you will be safe.
Offshore VPS Hosting vs. Dedicated Servers
One of the choices you'll make when purchasing offshore hosting is whether you want a VPS hosting package or a dedicated server.
VPS hosting provides you with a "slice" of a server. With virtualization software, the web host protects your resource allocation. Not only does this eliminate the possibility of your 'neighbors' on the server using resources that have been allocated to you, but you're also protected from their actions, security-wise.
Dedicated server accounts, however, provide you with full use of a physical server. Everything is allocated to your website, and there are no other sites using your server. You have 100% control over its configuration, and you may even get dedicated IP addresses so that you'll never get mistaken for anyone else (e.g., spammers who, with shared or VPS instances, might be using the same IP addresses as you).
3 Best Offshore Hosts - My Winners
There are 3 offshore website hosting companies that I would pick as the best offshore web hosting options.
Koddos is a hosting provider that specializes in DDOS protection and offshore hosting.
They are one of the few offshore hosts that has a reseller host package, as well as shared and dedicated servers.
The prices are reasonable and offer great value, considering you get 24/7 support, and all servers have at least 1 Gbps connections.
Primary servers are located in the Netherlands, but they also have specific plans for Hong Kong offshore hosting.
Another well known offshore host company is Shinjiru.
You can choose from shared servers, VPS, and dedicated servers, most of which offer unmetered bandwidth.
Shinjiru has an impressive 99.99% uptime guarantee, as well as 24/7 live support.
Private domain registration for the most common offshore extensions is available through Shinjiru.
They have 8 total offshore locations, offshore email, and accept Bitcoin for maximum anonymity.
Bitcoin Web Hosting
Finally, Bitcoin Web Hosting is a leading web host service if you're primarily interested in hosts that accept Bitcoin (other options available as well) for your e-commerce business.
You get to pick your host server, with the options of U.S., Europe, or offshore servers.
Bitcoin Web Hosting also comes with 24/7 support and is DMCA and Patriot Act safe.
You get a standard cPanel that supports all the main CMSs, all with a 45-day money-back guarantee.
Basic Hosting Features to Look For
When choosing a hosting company, there are several basic hosting features you should look for:
- SSD Storage: SSDs (solid state drives) are much faster than traditional hard-disk drives, but they're also more expensive. That said, many hosts include SSD drives by default in spite of this cost due to the improved performance offered
- Auto-Installers/Pre-Installed Software: If you use tools like WordPress, Joomla, or message board software, it's nice to work with a host that either installs these onto your environment for you or offers one-click installation.
- Databases: MySQL is the default option for many hosts, but some offer support for others like MongoDB or PostgreSQL. You'll also want to see how many databases are available to you
- KVM: if you're a Linux user and you need KVM (a kernel-based virtual machine), find out if this available to you.
- Unlimited bandwidth: Does the host offer unlimited bandwidth? If so, what are the restrictions set by the host? Many hosts will only offer unlimited bandwidth as long as you don't go overboard - the specifics of what constitutes this varies based on the company
- Data security: what does the host offer you in terms of data security? Does the host handle any of the tasks required to secure data, and does it offer you the tools to do so?
- Free domains: if you don't have a custom domain name, you might look for a host that offers one
- Add-on domains: if you need more than one domain, you'll want to work with a host that offers and supports multiple domain name usage
Points to Remember About Offshore Hosting
Aside from payment (usually per month or per year), and data center selection, an offshore host plan works the same as a normal hosting plan.
Typically, you can choose from a variety of services, depending on your resource needs. The most common types include:
- Shared server
- Virtual private server (VPS)
- Dedicated server
Shared servers are the cheapest, but a VPS gets you more resources. Dedicated servers are even more expensive than a VPS, but have the highest performance.
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Other features in Specialty
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- Domain Name
- Streaming Audio/Video
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