Ancillary Trust Services

Private Trustee Companies

A client may form a separate offshore company (a private trustee company) for the special purpose of acting as trustee of his or her trust or trusts. A private trustee company can provide savings, control, and privacy for clients who prefer not to place their assets with a trustee company owned by a financial institution.

There are many situations where it may be advisable for a client to form a private trustee company. The client may be interested in the additional privacy that such a structure provides, the planned investment activity may involve the trustee in potential liability, or it may require on the spot decision making which is not practical with a trustee in another time zone.

The Cook Islands has special provisions ensuring that private trustee companies are easy to establish and operate, as well as being effective. To view a detailed article on the Cook Islands private trustee company structure click here.

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Independent Trust Protector Services

The role of the protector in an offshore trust structure is vital. The protector looks out for the interests of the beneficiaries and the settlor, and ensures that the trustee acts responsibly and within the terms of the trust agreement. With significant expertise and experience in the proper administration of trusts, CIT is the ideal choice as an independent protector of offshore trusts.

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Standby Trustee

Some clients prefer to set up their family trust in their home jurisdiction, but make provision for the appointment of a foreign trustee and for the change of governing law to Cook Islands law, if anything goes wrong in the future.

CIT offers a “standby trustee” service, which ensures that if there is a challenge to the trust, then upon the resignation of the existing trustees, CIT will be appointed as trustee in their stead. In the interim, the standby trustee has no duties and plays no part in the administration of the trust.

The principal advantage of a standby trustee appointment is to avoid the grantor having to negotiate the terms of appointment and fees for an offshore trustee once a trust is in difficulty. In fact, many grantors change CIT’s appointment from standby to full trustee, once they become comfortable with the concept of an offshore trustee.

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Other Products and Services

Tax exempt international companies

The Cook Islands International Companies Act 1981-82 (“ICA”) governs the formation and activities of international companies. The structure of the ICA allows companies to be formed and operated with both flexibility and administrative ease. International companies are exempt from all tax in the Cook Islands.

International Companies are incorporated in the Cook Islands. CIT handles all aspects of the incorporation and provides the full range of administrative and accounting services.

Some of the features of Cook Islands International Companies include:

×              Only one shareholder required.

×              No minimum share capital requirement.

×              Shares do not have to have par value.

×              Strict confidentiality.

×              Shareholders can agree to waive AGMs and appointment of an auditor.

×              Accounts do not have to be filed.

×              Annual Returns must be filed. CIT can prepare and file the documentation.

×              Effective director and shareholder resolutions may take place via phone or fax for signing.

×              Meetings do not have to be held in the Cook Islands.

×              Minimum requirement of one director.

×              No requirement for Cook Islands resident director.

×              Redomiciliation into or out of the Cook Islands is allowed.

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Offshore Bank Licences

There are 2 offshore bank licenses available in the Cook Islands known as an International banking licence (“IBL”) and a Restricted International banking licence (“RIBL”). Both are permitted to carry on business with members of the public. Both must file annual audited accounts with the Financial Supervisory Commission. Offshore banks and their clients are protected by strict secrecy laws and are exempt from all forms of taxation.

An IBL enables a licensee to carry on banking business in or from within the Cook Islands. The IBL:

(a)        Must be a body corporate or statutory corporation, which means that an individual cannot apply for a license.

(b)        May carry on business on its own account in the Cook Islands

(c)        Must have a fixed address within the Cook Islands, (it may have shared use of security and reception only) however it must have a non-shared room exclusively for the banks’ business with their own dedicated telephone lines, fax, computer, printer and internet address.

(d)        Have at least one employee on the premises, who must have a day to day knowledge of the banking business conducted, and sufficient authority to participate in the management of that day to day banking business.

(e)        Must pay up and maintain surplus capital of Cook Islands $2,000,000 (or hold bank guarantees to that amount).

A RIBL authorizes the licensee to carry on international banking business of a type and nature specified in the license and approved by the Financial Supervisory Commission:

(a)        This license can only be issued to a foreign bank, or a wholly owned subsidiary of a foreign bank.

(b)        It may only operate in the Cook Islands through a licensed trustee company.

(c)        It must pay up and maintain surplus capital of Cook Islands $2,000,000 (or hold bank guarantees to that amount).

(d)        The licensee must have written confirmation from its supervisory authority in its home jurisdiction that the supervisory authority has no objection to the licensee carrying on banking business in the Cook Islands.

(e)        The licensee must be supervised in its home jurisdiction on a basis consistent with the guidelines established by the Basel Committee on Banking Supervision.

(f)          The licensee agrees to provide to the Financial Supervisory Commission any information that it may require to carry out the Commission’s supervisory functions.

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Offshore Insurance Licences

CIT can assist clients in preparing business and operational plans and applications for offshore insurance licences. It also incorporates the international company, or registers the foreign company, taking the licence. Upon approval of the licence, CIT is able to provide insurance company management services, together with provision of dedicated office space and personnel for operations.

The Cook Islands Offshore Insurance Act provides for the issue of insurance licences and sets out important provisions concerning the operations of insurance companies and the protection of policyholders’ interests. Significantly, policyholders’ funds are quarantined from funds held for other policyholders, as well as from the funds of the insurance company itself. This allows multiple parties to be brought within one corporate structure, preserving individual direction of fund management, and removing the risk of their funds being pooled. This structuring has uses extending beyond insurance.

The Act requires an offshore insurance company to have a paid up capital of a minimum of $100,000. The insurance company must transact its business through a trustee company unless special approval is obtained to set up a permanent establishment.

No part of the paid up capital or any other funds of an offshore insurance company is required to be held within the Cook Islands, nor maintained in any particular kind of investment.

There is no requirement for any director to be resident within the Cook Islands.

An offshore insurance company is required to submit audited annual accounts to the Financial Supervisory Commission. The auditor must be approved by the Commissioner and registered as a company auditor in the Cook Islands.

No Cook Islands tax of any kind is payable by an offshore insurance company, its policyholders, or any parties dealing with it.

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Private Placement Variable Life Insurance

In the United States, earnings within a life insurance policy grow tax free, cash values can be withdrawn without penalty, and death benefits may be paid out tax free upon the death of the insured. When combined with an asset protection trust the investment retains its high level of flexibility while also receiving the benefit of premium protection from creditors.

CIT can assist with structuring an APT and its investments, and with structuring the life insurance component to ensure that the maximum tax and asset protection advantages are attained. For further information please click here

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Ship and Yacht registration

Maritime Cook Islands Limited (Maritime) is the corporate administrator of the Cook Islands vessel Registry.  The Registry caters to the needs of  vessel owners by creating a flexible, user-friendly and responsive environment that upholds the highest standards of safety and accountability. It caters to a wide variety of shipping, from private yachts to fishing vessels, sailing upon all of the seven seas.

CIT can assist with all aspects of the vessel registration process, and of course can incorporate the international company to hold ownership of the vessel being registered.

For detailed information on the Cook Islands Registry visit the Maritime website at www.maritimecookislands.com

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