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COOK ISLANDS
OFFSHORE COMPANY FORMATION
COOK ISLANDS OFFSHORE COMPANIES INCORPORATIONS FEES AND PROCEDURES
GUIDE TO COOK ISLANDS COMPANIES
INTRODUCTION
In the early 1980’s, the Cook Islands government passed a raft
of legislation including the International Trusts Act and the
International Companies Act that established the offshore regime
of the Cook Islands. Entities established within the offshore
regime were given special exemption from taxation and other
obligations, duties and responsibilities imposed by Cook Island
domestic law. This enabled entities established within the
offshore regime to carry out their business activities with
maximum freedom and flexibility.
Entities established within the offshore jurisdiction are exempt
from any form of taxation in the Cook Islands including stamp
duty, capital gains tax, capital duty and withholding tax. There
is also no exchange control.
Strong confidentiality provisions apply in the Cook Islands,
requiring government officials as well as trustee company and
bank employees to observe strict secrecy. These provisions are
backed by penal sanctions. The statutory records of the
Registrar of International & Foreign Companies are not open for
general search - even by government officials.
COOK ISLANDS INTERNATIONAL COMPANIES (IC)
The International Companies Act 1981-82 ("the Act") outlines the
law in relation to Cook Islands international companies
(“companies”). The Act allows a great deal of flexibility in the
structure of these companies with provisions to ensure ease of
administration.
INCORPORATION
Incorporation can be processed within 24 hours once company
order checklist details are received together with incorporation
costs and due diligence requirements.
Once the Memorandum and Articles of Association are filed with
the Registrar together with payment of the prescribed fee,
incorporation can be completed. The Registrar will issue a
Certificate of Incorporation valid for 12 months which is
automatically renewed on payment of the prescribed fee.
STATUTORY PROVISIONS
Shares and Share Capital
There is no minimum share capital requirement and shares may
have no par value and designated in any value and in any
currencies. Redemption of shares and reduction of share capital
is simple and can be effected without the necessity of a court
order. A company may finance the purchase of its own shares, and
repurchase and cancel its own shares from surplus.
A minimum of one subscriber is required to the Memorandum of
Association. There is no obligation to disclose to the Registrar
(or any other government authority) the name of the beneficial
owner of the company.
Statutory Registers
The registers of directors, secretaries and members must be
maintained at the registered office. The Registrar can grant
approval to keep the register of members at a location other
than the registered office.
Registered Office/Registered Agent
The registered office is required to be at the principal office
of a trustee company. There is no requirement to appoint a
registered agent.
Directors and Company Secretary
There must be a minimum of one director, whose details are filed
with the Registrar. Every company must have a minimum of one
secretary who must be resident in the Cook Islands. Details of
the resident secretary and any other secretaries are required to
be filed with the Registrar.
Shareholders’ Meetings
Members can agree in writing to waive the requirement to hold
Annual General Meetings.
Books, Records and Common Seal
The company has to maintain accurate records and accounts. The
company has to keep minutes of all general meetings and director
meetings in a minute book. The minute book must then be kept at
the registered office, but the Registrar can grant approval to
keep the minutes at any location outside the Cook Islands. An
annual return must be filed annually when the company
registration is renewed
Accounts for the company must be kept at the registered office,
but again approval from the Registrar can be obtained to keep
the accounts at a location outside the Cook Islands. There is no
formal requirement to file accounts with the Registrar. The
members of a company that does not invite subscriptions or
deposits from the public can waive the requirement to appoint a
registered auditor. A company does not need a common seal, but
if the choice is made to have a seal then it may be kept at a
location other than the registered office.
Name
The Registrar may reserve a name for up to 6 months on request.
The name must have a recognised word or abbreviation signifying
its corporate status and this must be approved by the Registrar.
The Registrar has discretion to decline any name he considers
undesirable.
Memorandum and Articles of Association
The Memorandum must indicate the name of the company, what type
of company e.g. limited liability or unlimited liability, the
authorised share capital and the name and address of the
subscriber and the number of shares subscribed for. The company
automatically has the powers specified in the First Schedule to
the Act unless modified in the Memorandum.
The company can adopt the Articles in the Second Schedule or
adopt its own. The Memorandum and Articles must be filed with
the Registrar.
Registration of Charges
An optional register of charges is kept by the Registrar. Any
unregistered charge shall be unenforceable against a liquidator
or creditor.
Redomiciliation
Under the Act, non-Cook Islands companies can be re-domiciled to
the Cook Islands as international companies. In the reverse,
international companies can be re-domiciled to other
jurisdictions.
Strike-off and Restoration
If a company fails to pay its annual fees on or before the due
date, then it would be struck-off from the Companies Registry
but may be restored in certain circumstances.
COOK ISLANDS ASSET PROTECTION TRUSTS
Under Cook Islands law, an Asset Protection Trust or
International Trust (“the trust”) is a trust that is registered
under the International Trusts Act 1984 ("the ITA"). The ITA did
not replace the essential requirements under common law for the
establishment of trusts, rather it enhanced through legislation
aspects of common law to strengthen wealth preservation or asset
protection.
Under the ITA, the trust has its connection with the Cook
Islands through a Cook Islands trustee company or an
international company registered under the International
Companies Act 1981-82. The beneficiaries must not be resident in
the Cook Islands.
CREATION
To create a trust, a written application is required to be filed
with the Registrar of International Trusts detailing the name of
the trust, trustees, date of the trust instrument and the
registered office of the trust. The trustee company filing the
application must then confirm that the beneficiaries are
non-resident. Subject to approval, the Registrar will then issue
a certificate of registration. There is an annual renewal
process of registration and if this is not adhered to then the
trust reverts to being governed by common law.
STATUTORY PROVISIONS
Exclusion of Foreign Judgments
Foreign judgments are not enforceable against a trust. Under
Cook Islands law, the claimant must commence new proceedings in
the Cook Islands and be subject to Cook Islands law. A trust
governed by the ITA or disposition of property held by the trust
will not be void, liable to be set aside or defective by reason
that the laws of any foreign jurisdiction prohibit or do not
recognise the concept of a trust, or that the laws of the Cook
Islands are inconsistent with any foreign law.
Common Law Position
The ITA modifies the common law rules relating to the rules
against: accumulations, double possibilities, perpetuities,
restricting the extent of charitable purposes and purpose
trusts.
Revocation
A trust will be deemed to be irrevocable unless it has an
express power of revocation.
Settlor Control and Benefit
A trust is not invalid or disposition void or affected in any
way if the settlor retains or acquires: a power of revocation; a
power to amend the deed; a power of disposition over trust
property or any interest in the trust property.
Heirship Rights
In the case of a disinherited heir, he/she cannot challenge a
trust on the grounds it interferes with his or her right to
succeed to assets or property.
Spendthrift Trusts
A trust can provide that an interest in property given to a
beneficiary for life or a lesser period shall not be alienated
or pass from the trust by bankruptcy or be taken in execution by
process of law.
Fraud
The ITA provides that a disposition to a trust is not deemed to
be fraudulent against a creditor of a settlor;
• if the settlement or disposition takes place after the expiry
of 2 years from the time the creditor's cause of action arose;
or
• the creditor fails to bring his action before the expiry of 1
year from the date of such settlement or disposition; or
• the settlement or disposition takes place before the
creditor’s cause of action arose.
Even if the above can be established a creditor must prove
beyond reasonable doubt (as opposed to the balance of
probability onus of proof) that a trust was settled:
• with the principal intent of defrauding a creditor, and
• the settlement rendered the settlor insolvent or without
property by which the creditor's claim could have been
satisfied.
Once the above has been satisfied, the settlement is not void or
voidable but the trust is liable to satisfy the claim of the
creditor out of property, which, but for the settlement, would
have been available to the creditor.
Bankruptcy
In the event of a settlor’s bankruptcy, a trust is not void or
voidable notwithstanding any law of the settlor's domicile or
place of residence and that the trust is voluntary, without
valuable consideration and made for the benefit of the settlor,
the settlor’s spouse or children.
Commencement of Proceedings
Any proceedings to be commenced in the High Court of the Cook
Islands to set aside the settlement of a trust or disposition
relating to the trust must be brought within 2 years of the
settlement or disposition.
Delegation
A trustee has statutory rights to delegate powers and functions
such as management of trust property, investment management and
to employ professionals to act in relation to the affairs of the
trust.
Custodian and Advisory Trustees
A Custodian or Advisory trustee can be appointed to hold trust
property and to advise in relation to the trust property.
Confidentiality
It is a serious offence for any person to divulge information
about a trust to any other person.
Guarantee Against Compulsory Acquisition
The Cook Islands government guarantees that there will be no
compulsory acquisition or expropriation of trust property unless
in accordance with the due process of law.
Governing Law
A term of a trust selecting Cook Islands law to govern the trust
is valid, effective and conclusive regardless of any other
circumstances.
Details of Services BY Colake Consultant
In general, our fees for registration of a company in the jurisdictions listed above will include the following services:
(1) Search for the availability of the proposed company name;
(2) Prepare and apply to relevant authority for Certificate of Incorporation and payment of official registration fee and /or first year licence fee;
(3) Printing of Memorandum and Articles of Association
(4) Printing of share certificates
(5) Manufacturing of company chop and common seal
(6) Filing of notice of first secretary and director, if required; location of registered office
Note: Delivery charge is in addition to the fees quoted above.
OFFSHORE COMPANIES REGISTRATIONS PROCEDURES
General Procedures for Registration of a Tailor-made company through Colvass
Step 1
You confirm and engage Colvass to register an offshore company by either sending Colvass an email or fax. If so requested, Colvass will prepare and sign an engagement letter with you.
Step 2
You provide to Colvass either by fax or scan and email the following materials:
1 Proposed company name, either in English only or Chinese only or both;
2 One photocopy of passport (only the page showing the particulars of the holder) and residential address of each shareholder; if any shareholder is another corporation, please provide Certificate of Incorporation and Registered Office of that corporation;
3 One photocopy of passport (only the page showing the particulars of the holder) and residential address of each director; if any director is another corporation, please provide Certificate of Incorporation and Registered Office of that corporation;
4 Amounts of authorized share capital and issued capital, percentage of shareholdings if more than one shareholder.
Step 3
Colvass check the availability of the proposed company name. If available, Colvass proceed to registration; if not available, Colvass will go back to you for more company names and perform the availability search again.
Step 4
Colvass receive the Certificate of Incorporation from the Registrar of Companies.
Step 5
Colvass attend to the followings:
1. Printing Memorandum and Articles of Association
2. Prepare minutes of First Board Meeting
3. Prepare Application for Allotment of Share(s) for each shareholder
4. Prepare Consent to Act as Director for each director
5. Update Register of Members
6. Update Register of Directors
7. Prepare Share Certificate
8. Carve Common Seal and rubber chop
Step 6
Colvass arrange to deliver the above documents/materials (together known as Company Kit) to you.
Step 7
Upon receipt of the Company Kit, you sign the following documents:-
1. Application for allotment of shares
2. Minutes of First Board Meeting
3. Consent to Act as Director
4. Share Certificate
and then either fax or scan and email a copy of the duly signed documents as listed above to Colvass. Registration procedures completed.
General Procedures for Purchase of a Readymade Company from Colvass
Step 1
You confirm and engage Colvass to register an offshore company by either sending Colvass an email or fax. If so requested, Colvass will prepare and sign an engagement letter with you.
Step 2
Colvass email, fax or post the Readymade Companies List to you and you select at least two names in priority preference and confirm with Colvass your selection.
At the same time, you provide to Colvass either by fax or scan and email the following materials:
1 One photocopy of passport (only the page showing the particulars of the holder) and residential address of each shareholder; if any shareholder is another corporation, please provide Certificate of Incorporation and Registered Office of that corporation;
2 One photocopy of passport (only the page showing the particulars of the holder) and residential address of each director; if any director is another corporation, please provide Certificate of Incorporation and Registered Office of that corporation;
3 Amounts of authorized share capital and issued capital, percentage of shareholdings if more than one shareholder.
Step 3
Colvass check the availability of the selected readymade companies. If available, Colvass proceed to registration; if not available, Colvass will go back to you for more company names and perform the availability search again.
Step 4
Colvass attend to the followings:
1. Printing Memorandum and Articles of Association
2. Prepare minutes of First Board Meeting
3. Prepare Application for Allotment of Share(s) for each shareholder
4. Prepare Consent to Act as Director for each director
5. Update Register of Members
6. Update Register of Directors
7. Prepare Share Certificate
8. Carve Common Seal and rubber chop
Step 5
Colvass arrange to deliver the above documents/materials (together known as Company Kit) to you.
Step 6
Upon receipt of the Company Kit, you sign the following documents:-
1. Application for allotment of shares
2. Minutes of First Board Meeting
3. Consent to Act as Director
4. Share Certificate
and then either fax or scan and email a copy of the duly signed documents as listed above to Colvass. Registration procedures completed.
The procedures described above are for general reference only. Please refer to the specific jurisdiction of interest for detailed procedures for incorporating a company in that jusridiction.
For further information or placement of order, please contact our offices or send email to info@ahkcpa.com
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