Offshore bank accounts

Cook Islands company formation

 

Basic facts regarding Cook Islands

The Cook Islands consists of 15 islands scattered over some two million square kilometres of the Pacific Ocean, approximately half way between New Zealand and Hawaii. It lies in the centre of the Polynesian Triangle, flanked to the west by the Kingdom of Tonga and Samoa and to the east by Tahiti and the islands of French Polynesia.

The total land area of the Cook Islands is 240 square kilometres. Its total population, as enumerated in the 2006 census was 19,569, an increase of 1,542 over the 2001 count. However, in that period, the resident population declined from 14,000 to 11,800, indicating an increasing proportion of non-residents.

Cook Islands taxation

Tax rate for all offshore entities is zero.

Offshore business in Cook Islands

The large offshore financial sector developed from legislation enacted in the early 1980s, which allowed the operation of international companies and trusts, including offshore banks and insurance companies. All offshore business conducted from the Cook Islands must be channeled through registered trustee companies. Currently there are six registered trustee companies and four international banks. One of the domestic banks also has an international license.

Main features of Cook Islands entities

International business companies

The International Companies Act provides that the international company is not allowed to deliver bearer instruments to any person other than a Custodian and no Custodian shall hold any bearer instrument unless the Custodian has first received satisfactory evidence on the identity of the bearer of the bearer instrument.

Trusts

Trust law in the Cook Islands is sharply divided into two areas: (i) domestic trust law - the common law of trusts in the Cook Islands is substantially similar to the law of trusts in New Zealand, which is based upon British common law. As in most common law countries, domestic trusts are not required to be registered; and (ii) international trust law - the International Trusts Act 1984 (as amended 2004) applies to international trusts which are defined in the Act as requiring non-resident beneficiaries. This statute makes substantial changes to the otherwise applicable common law of trusts. There are currently six trustee companies authorized under the Trustee Companies Act 1981-82 that may act in the role of trustee or trust and company service provider (TCSP), and, therefore, provide services such as trust formation, registration of international trusts, international partnerships and limited liability companies and other related services.

Offshore banking in Cook Islands

The Cook Islands financial sector is divided into two parts: domestic and offshore. The Financial Supervisory Commission (FSC) regulates and supervises those financial institutions (both domestic and offshore) that fall within the regulatory framework. There is no Central Bank and the country uses New Zealand currency. There is no securities sector in the Cook Islands.

The domestic banking sector comprises three banks, two of which are branches of Australian banks, and one government-owned bank. The Australian banks account for more than 85% of the banking sector. Total domestic bank assets at 31 December 2008 were NZ$445.2 million.

The offshore banking sector comprises four international banks, plus one of the domestic banks that also has an international licence. Total offshore bank assets at 31 December 2008 were NZ$448.5 million.

International cooperation

Cook Islands have executed Tax Information Exchange Agreements with Australia, Denmark, Faroe Islands, Finland, France, Greece, Greenland, Netherlands, Iceland, Ireland, Italy, New Zealand, Norway, Republic of Korea, Sweden.

[Sources: United States Department of State Bureau for International Narcotics and Law Enforcement Affairs; Asia/Pacific Group on Money Laundering; Organisation for Economic Co-operation and Development]

 

Bank accounts

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