Business rights and internet

There were a few threads about setting up businesses in TW and the the legality of you working there. The response seems to be that it is better to set up the company in another country. So, my question is, if you are selling downloadable items such as software and games etc. What is the best way to do it. Setting up a site hosted in the same country that your business is registered in?

The question of legality on the internet is very vague. An example of where this works is:
It is illegal for US companies to export encryption programs with more than …(I forget, eg: 32 bit) encryption. However, it is perfectly legal for them to have these programs on servers in Azerbaijan etc and have customers download them from there.