Way out in the South Pacific, (some would say, in the middle of nowhere), lie the Cook Islands, home to a very modern set of offshore financial laws that may be just what you need: iron-clad asset protection trusts, international business corporations, limited liability partnerships, and a very strict financial privacy law that keeps private your personal business.
Travels of Capt. James Cook, 1755-1779
Not as well known as some offshore financial centers, in 1981 the Cook Islands government first began adopting (and updating) a series of wealth and asset-friendly laws. Since then these islands have attained a definite role in offshore financial circles, especially when it comes to asset protection trusts.
Named after Captain James Cook, the famous British explorer who visited them in 1773, the islands became a British protectorate in 1888. By 1900, administrative control was transferred to New Zealand; in 1965, residents chose self-government and a free association with New Zealand. A member of the British Commonwealth, the islands have a constitution with a Westminster style parliament elected every four years by universal suffrage. The legal system is based on British common law and English is widely spoken.
Heart of Oceania
A broad net of 15 coral islands in the central heart of the South Pacific, the Cook Islands are spread over 850,000 square miles, southwest of Tahiti and due south of Hawaii. The islands occupy an area the size of India, but have a population (a little over 21,000 people) no larger than a small town in America.
Local time is 10 hours behind GMT, with 9:00 a.m. in Hong Kong is 3:00 p.m. the previous day in the Cook Islands. When it is noon EST in the United States it is 5:00 p.m. in the Cook Islands.
This geographic location gives the Cook Islands, with its excellent modern communications, a strategic advantage in dealing with both the Asian and American markets.
Planned Offshore Center
The development of the Cook Islands as an offshore financial center was the product of the government’s official collaboration with the local financial services industry. It’s no secret that certain American asset protection attorneys played a role in advising the government on asset protection issues, actually drafting statutes for the island’s parliament.
Financial services now rank second to tourism in the economy. Despite some 50,000 visitors a year to the capital island, Rarotonga, (left) the beautiful Cook Islands remain largely unspoiled. The New Zealand dollar is the local currency, but usually offshore transactions are in U.S. dollars. Several major Pacific area banks have offices here.
Tailored Wealth Protection
There is much here to for serious persons of any nationality who want strong asset protection supported by sympathetic government and judicial policies.
Existing statutes provide for IBCs, offshore banks, insurance companies, and trusts. All offshore business conducted in the Cook Islands must be channeled through officially registered and regulated trust companies. A comprehensive range of professional trustee and corporate services is available.
International companies incorporated are allowed great flexibility in corporate structure with provisions to ensure ease of administration. Incorporation can be completed within 24 hours.
The Cook Islands definitely is a tax haven. The government officially guarantees no taxes will be imposed on offshore legal entities. Thousands of foreign trusts, corporations, LLCs and partnerships are registered here, protected by an exceedingly strong financial privacy law. There are no currency controls.
Updated Laws
The Cook Islands systematically has adopted a series of anti-money laundering, financial reporting, and anti-financial-crime laws. These laws were sufficient in 2005 to get them removed from the Financial Action Task Force (FATF) blacklist, which was their stated objective. These laws prohibit "fishing expeditions" and ensure that any information disclosed is done through proper channels with legal justification after a court hearing.
In 1989, an amendment to the International Trusts Act 1984 introduced the asset protection trust (APT). This legislation is considered cutting edge and has since been copied by many offshore financial centers.
An asset protection trust is not required to file any returns, reports, or records. A trust settlor’s bankruptcy does not void the trust. Foreign court judgments are not enforceable against a trust. A foreign claimant must start new proceedings in the Cook Islands subject to local law. All claims are subject to a two year statute of limitations running from the time of the trust creation.
Strict Confidentiality
Strong financial and banking secrecy provisions apply here, requiring government officials, as well as trustee company and bank employees, to observe strict secrecy backed by criminal sanctions.
The official registrar records of foreign companies and of international trusts are not open for general search, with a few defined exceptions. Thus all parties are kept private unless a court releases the information.
In 2009, together with almost every offshore financial center in the world, the Cook Islands government agreed to apply the OECD standards allowing exchange of tax information about foreigners accounts when tax evasion can be shown.
The Anderson Case
In a major American legal case, the U.S. government tried to force the repatriation of funds held by a Cook Island trust and lost, even though the Americans who created the trust for a time were jailed for contempt of court. Not even a federal court could crack the Cook Island trust laws. For more about what is known as the "Anderson case" see FTC vs. Affordable Media LLC, 179 F. 3rd 1228, U.S. Ct. of Appeals, 9th Cir. (1999).
So don’t let those thousands of miles distance scare you.
A good offshore-savvy attorney in any country should know how to use the Cook Islands asset protection laws to your benefit. If you need a U.S. offshore attorney just ask me.
I have a good friend who has had a Cook Islands trust for many years as a protection against possible business liabilities. He is fully satisfied with its operation and protection, with his local American attorney acting as liaison with his Cook Islands trust company.
Or, if you want to go direct, you can contact our man in the Cook Islands: Puai Wichman, Managing Director, Global Consultants and Services (Cook Islands) Ltd., Global House, PO Box 92, Avarua, Rarotonga, Cook Islands, Tel: +682 27 047 Fax: +682 27 046, Email: cookislands@gcsl.info or puai@gcsl.info
You can read all about the Cook Islands and all of the world's offshore financial centers in my just published 4th edition of Where to Stash Your Cash Legally: Offshore Financial Centers of the World. Find out how here.
The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.
Comments