If you start a web hosting business I would definitely not set it up in the United States or any of the European Union countries. The laws there are becoming more and more intrusive and so setting it up in Asia or Panama or Uruguay where you have some privacy laws and tradition governing your business is much much better in my opinion.
P.S. Which web hosting companies offshore do you guys like?
Honestly, I would rather stay where there are laws and regulation. Sets boundaries on what you could do and can't do. And unless you're planning on selling illegal items or bootlegging stuff, you're better off staying at a place where you can take legal action - an offshore company can be out of limits legally if they decide to shut overnight without a warning. And for all you know, they may not be a valid business at all.
I personally have always had an offshore server. I just feel like Im not restricted however I also have an onshore server for backups just in case there was a problem. I also feel that there is more of a market when you come to selling offshore.
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