Welcome to European-American University  
You are not Logged in! Log in here.

Key routes to a degree:

Home > Alcott Center for Educational Research >The IBC as e-University

The IBC as e-University - A New Frontier in Global Education


    by John Kersey

    "It is today possible, to a greater extent than at any time in the world's history, for a company to locate anywhere, to use resources from anywhere to produce a product that can be sold anywhere."
    - Milton Friedman

    "The real issue is control. The Internet is too widespread to be easily dominated by any single government. By creating a seamless global-economic zone, anti-sovereign and unregulatable, the Internet calls into question the very idea of a nation-state...What the Net offers is the promise of a new social space, global and anti-sovereign, within which anybody, anywhere can express to the rest of humanity whatever he or she believes without fear. There is in these new media a foreshadowing of the intellectual and economic liberty that might undo all the authoritarian powers on earth."
    - John Perry Barlow, Thinking Locally, Acting Globally, Time, January 15, 1996, p 57

    What is an IBC?
    An IBC, or International Business Company, is a legal corporate entity created within the scope of an International Business Companies Act by a jurisdiction.

    Several jurisdictions, seeking to attract international trade, have enacted IBC legislation in order to provide access to this uniquely flexible and highly effective corporate instrument. Although (as will be seen) exemption from domestic taxation is one feature of an IBC that may prove superficially attractive, it is the legal capacity of the IBC as an outstandingly flexible corporate vehicle that distinguishes it from the merely exempt company and instead gives it an unique status within international corporate structures.

    Key features of an IBC
    An IBC is distinct from an exempt company (such as exists within Panamanian law, for example) in that it is specifically empowered to conduct business outside its jurisdiction of incorporation, and may not conduct business within it (with the exception of certain specified minor acts). This places the IBC in a remarkable position in that its activities are not subject to the domestic law of its jurisdiction (nor to domestic taxation), but instead are subject to the laws of the jurisdictions where it operates, where it is treated as a foreign corporation and subject to laws and taxes  on foreign trade. This creates a position of domestic statutory exemption and consequently great freedom for the IBC.

    The IBC as e-University
    We have discussed elsewhere that an university operating entirely virtually and online is now a technological possibility. Such an institution ostensibly faces problems in that domestic higher education legislation remains overwhelmingly wedded to the campus principle, neither understanding nor embracing the new technology that facilitates education beyond national boundaries delivered by international e-universities. Naturally, this is not an accident, since most of such legislation is drafted with the explicit intent of protecting the turf of campus-based institutions.

    Into this environment comes the IBC. The IBC, where empowered with university title by its incorporating jurisdiction, carries with it common law precedent of university status and the capacity to conduct university work in countries which have not enacted variances from common law in respect of the operation of foreign universities. This is still the case in many countries around the world.

    In this respect the IBC is no different from any other corporate vehicle empowered with university title - be that a domestic corporation, a charitable trust or an entity created under Royal Charter. In each case the government makes a conscious decision to empower the entity as a university through the action of its delegated authorities. The government also has the power to rescind that choice, as is the case in some countries (such as Gibraltar, the U.K. and Ireland) where the use of "university" in a corporate name is not permitted.

    All this creates a position where the IBC e-university is genuinely free from political constraint and influence, and is able to realise the original vision of the university as an independent body dedicated to the unhindered pursuit of scholarship.

    The IBC is thus not affected by educational legislation in its country of origin. Legislation is only applicable within a territorial jurisdiction; when a country creates a corporate vehicle that is explicitly designed to operate outside its territorial jurisdiction, it thereby creates an exemption from domestic statute. This is a significant difference from non-IBC "exempt companies", which remain subject to domestic legislation throughout. Thus, while remaining a Dominican corporation, EAU can operate anywhere from Copenhagen to Antarctica providing it complies with local laws. It is not part of the Dominican national system of education - nor any other - since it is not a domestic institution but one in an unique category of exemption.

    More to the point, as an e-university operating via the Internet, questions of jurisdiction are moot. Rather than being "based" in a given location, the e-university can instead operate as a diversified international network, connected through technology and bringing into focus the vision of the university as an internationally co-operative global entity without walls or borders. The original 1960s and earlier vision of a "university without walls" has a particular applicability to this mode of operation.

    The New Frontier
    The IBC e-university represents a new and radically challenging development in international education, and one which the mainstream is keen to resist. Wholly internet-based universities are not a new development - the first, Paideia in Holland, appeared in the late 1990s as a private initiative, although it did not last long. Since then, serious efforts to establish a true virtual university have been hampered by government red tape which has strongly resisted the concept. This has meant that the area has become tainted by diploma mills and low quality private sector schools, some operating via IBCs. However, diploma mills are far from isolated to this sector; most in any case seek to ape brick-and-mortar institutions. The methodology and the technology of the e-university remain sound, and the far-reaching potential of the concepts involved means that they may well be pointing the way to the overall future of higher education as a fully online global process conducted for the benefit of all.

    This means that the IBC e-university concept needs to establish credibility and stability on its own terms, a concern for EAU in its initial period of growth. Such will depend on our success in carrying through our mission and in proving that the concept can work well. We seek not the acceptance of the educational establishment or those whose vested interests are served by denigrating and isolating this new approach to the university, but the acceptance of the global market, which has in the past shown itself quick to understand the ideas and benefits involved.

    A pioneering situation in this area was evident recently in the formation of Universitas 21 Global, an online private business school backed by a number of mainstream state universities. For its incorporating jurisdiction, U21 Global chose Guernsey in the U.K. Channel Islands - an established offshore island jurisdiction where there is no tax on goods and services, and remains based there while having no apparent intention to offer education on Guernsey itself (which has no universities). Although U21 Global has since gained programmatic licensing from the Singapore Ministry of Education to offer its eMBA there, and accreditation via the private EQUIS scheme, in legal form its situation remains directly comparable to that of EAU.