While writing a travel blog about Bermuda, I became fascinated with why TLDs exist for parts of countries. I’ve asked about TLDs vs effective TLDs because DNS and TLD delegations are fascinating. We have TLDs like .pr for Puerto Rico and .bm for Bermuda even though they are a part of the US and UK respectively. The TLDs .us and .uk would make more sense. Most of the TLDs of the AI era, .ai, .sh, .io, and .ms, are actually TLDs for British subnational territories. Why is there a TLD for every dependent territory?
Words here are my own.
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British Dependent Territories
My hotel, Inverurie, like many businesses in Bermuda, proudly advertises its .bm domain. Despite being an island of 65,000 people, it gets its own TLD, just like other British Overseas Territories.
I also venture into how these various British dependent territories have historically been tax havens as a tangent. Independent, geographically distinct jurisdictions based on British Common Law are great tax havens prior to OECD pillars AND meet ISO 3166 standards for two-letter country codes. Regardless, below, I take a look into the tax regimes and TLDs of various British Overseas Territories and Crown Dependencies.
Most of the sources here are Wikipedia and collected here for convenience - use actual sources like CTHI for anything more than infotainment.
Why Subnational Territories Get Two-Letter TLDs
The reason two-letter TLDs are limited is due to country codes in ISO 3166, which is just a mapping of countries to two and three-letter codes. Any subnational territory that has a separate administrative/legal system will be listed in this country code database, and thus be eligible for a two-letter TLD.
Since 2012, brand TLDs or gTLD “Generic TLDs” not tied to a country have been available for sale by ICANN to companies or governments with enough money. This still precludes two-letter TLDs though.
Dependent Territory TLDs and Tax Authorities
British dependent territories consist of British Overseas Territories (BOT) and Crown Dependencies (CD), but they are a part of the UK (UK international representation, but local autonomy). Their legal structure seems to be a vehicle for tax avoidance. Compare the US territory of Puerto Rico, which has a corporate tax rate of 18.5%.
| British Overseas Territory | TLD | TLD $/yr | Sq Mi | Pop, K | Notes |
|---|---|---|---|---|---|
| Akrotiri & Dhekelia | - | - | 255 | 16 | UK Military Base |
| Anguilla | .ai | ~$70 | 35 | 16 | 0% Tax Rate |
| Bermuda | .bm† | ~$160† | 21 | 63 | 0% Tax Rate * |
| British Antarctic Territory | - | - | 660,000 | 0 | Claimed |
| British Indian Ocean Territory ◊ | .io | ~$40 | 23 | 3 | UK Military Base |
| British Virgin Islands | .vg | ~$10 | 59 | 32 | 0% Tax Rate |
| Cayman Islands | .ky | ~$70 | 102 | 79 | 0% Tax Rate |
| Falkland Islands | .fk † | NA† | 4,700 | 5 | UK Military Base |
| Gibraltar | .gi† | ~$140† | 3 | 34 | 0% Tax Rate * |
| Montserrat | .ms | ~$35 | 39 | 5 | 0% local / 20% Int’l |
| Pitcairn Islands | .pn | ~$200 | 18 | <1 | Not Tax Haven |
| South Atlantic Islands | .sh / .ac / .ta † | ~$30 / ~$30 / NA† | 152 | 6 | Not Tax Haven |
| Antarctic Islands | .gs | ~$40 | 1,507 | <1 | Not Tax Haven |
| Turks and Caicos islands | .tc | ~$35 | 366 | 49 | 0% Tax Rate |
| ——— | ——— | ——— | ——— | ——— | ——— |
| Crown Dependency | TLD | $ TLD/yr | Area (Sq Mi) | Pop, K | Notes |
| Bailiwick of Guernsey | .gg ‡ | ~$60 | 30 | 67 | 0/10/20% Tax Rate *, ⁂ |
| Bailiwick of Jersey | .je | ~$60 | 46 | 108 | 0/10/20% Tax Rate *, ⁂ |
| Isle of Man | .im | ~$10 | 221 | 83 | 0/10/20% Tax Rate *, ⁂ |
These subnational entities constitute 6 of the top 20 biggest enablers of tax abuse as of 2024, see https://cthi.taxjustice.net/ . If you can legally reside in these subnational jurisdictions, you could have a 0% personal income tax, but this is limited by the US and UK.
An International Business Company is a tax vehicle for non-residents to do business outside of one of these subnational jurisdictions. The British Virgin Islands pioneered the idea of a “International Business company” via the BVI IBC Act 1984, and many other former/current British colonies have copied this (including non-British colonies like the Seychelles and the Marshall Islands).
…So a two-letter TLD is a marker of being in ISO 3166, and ISO 3166 includes geographically distinct territories, dependencies, and special administrative regions. Bermuda fits this definition, like other British dependent territories.
* Global Minimum Tax Laws, meaning 15% for international companies with annual revenues of > €750M. This is something that has been codified into law by multiple subnational jurisdictions due to pressure to conform to “OECD Pillar Two”, which sets a global minimum corporate income tax for large corporations. The US-based think tank, the Tax Policy Center provides this readable explanation of the OECD Tax Pillars.
⁂ 0% Standard Corporate Income Tax Rate / 10% Regulated financial services profits / 20% Tax Rate on utilities and large retail (> £500k profits in the Isle of Man). No capital gains or inheritance tax.
◊ .io has an uncertain future. The Chagossians, the native inhabitants of the Chagos Islands aka “British Indian Ocean Territory”, were due to regain control of their islands in 2025. In April 2026, the UK created additional roadblocks to prevent them from returning.
† Restricted to residents or requires business related to the territory
‡ I benefit from these TLDs - ross.gg uses the Bailiwick of Guernsey.