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Geographical Info
Background: Named after Captain Cook, who sighted them in 1770, the islands became a British protectorate
in 1888. By 1900, administrative control was transferred to New Zealand. Residents chose self-government with free
association with New Zealand in 1965. The emigration of Cook Islanders to New Zealand in large numbers and resulting
loss of skilled labor and government deficits are continuing problems.
Location: Oceania, group of islands in the South Pacific Ocean, about one-half of the way from Hawaii
to New Zealand.
Climate: tropical; moderated by trade winds.
Communications
Rarontonga has a continuous international telephone, telex and facsimile service via satellite. Direct dialling
to Rarotonga is available from most countries. There are also good international postal and courier services.
Air New Zealand operates a twice weekly Boeing 767 flight Auckland/Rarotonga/Auckland and a weekly Boeing 767
flight between Nandi (Fiji)/Rarotonga /Papeete and return connecting with Los Angeles. Cook Islands International
has one flight a week from Sydney and from Auckland while Hawaiian Airlines and Polynesian Airlines operate flights
to and from Rarotonga to Western Samoa and Hawaii. These flights provide direct access to Australia and New Zealand
and connections to continental USA.
Population
Total population of the island group is approximately 20,200 (July 1999 est.) with half living on Rarontonga. The
indigenous population is Polynesian but English is spoken by most of the islanders and is the official language
of the Cook Islands.
Political Structure
Great Britain proclaimed a Protectorate over the Cook Islands in 1888 and in 1901 the islands were ceded to New
Zealand. The Cook Islands became fully self-governing in 1965 under the Cook Islands Constitution Act 1964 which
gave them a Westminster-model written constitution. Subsequent amendments to the Constitution have been enacted,
the most significant being the Constitution Amendment (No 9) Act 1980-81 which introduced a form of Bill of Rights.
In the special relationship that has been retained with New Zealand, Cook Islanders have retained New Zealand citizenship,
providing them with free access to New Zealand. There is no reciprocal arrangement giving free access to the Cook
Islands for New Zealand residents.
The Government has re-affirmed continuing support and encouragement for the development of Rarotonga as a financial
centre. There are two main political parties; the Democratic Party and the Cook Islands Party, which between them
hold all 24 seats in Parliament. Both parties support the Cook Islands status as an offshore financial centre.
Executive authority is vested in Her Majesty The Queen. The Queen's Representative is appointed upon the advice
of the Cook Islands Government. Executive Government lies with a cabinet comprising the Prime Minister and six
other Ministers appointed by the Prime Minister.
The Cook Islands has growing international stature and is a member of the South Pacific Forum, the Economic
Commission for Asia and the Pacific and the Asian Development Bank.
Legal System
The superior court of the Cook Islands is the High Court of the Cook Islands which was established under the Cook
Islands Constitution Act 1964. The legal system is based upon the principles of English common law and equity.
Appeals are to the Cook Islands Court of Appeal (which must include a current or former Judge of the Court of Appeal
of New Zealand) and to the Privy Council in England.
Taxation
Entities established within the offshore jurisdiction are exempt under the International Companies Act 1981-82
from any form of taxation, including stamp duties, capital gains tax, capital issue tax and withholding tax. The
legislation also provides such entities with a guarantee that the Crown will not compulsorily acquire or expropriate
their property situated in the Cook Islands except under specified circumstances defined by law. The Cook Islands
are not a party to any double taxation treaty.
Monetary System and Exchange Controls
New Zealand currency is used in the Islands. Exchange control exists only on certain dealings designated in New
Zealand dollars. There are no local restrictions on the movement of funds to or from the Cook Islands in other
currencies and funds may be held and business transacted in the Cook Islands in any currency. As New Zealand has
now removed its exchange controls international entities have no restraints on dealing in New Zealand dollars.
Type of Company Available
The regulation of companies in the Cook Islands and their taxation status is governed by whether they seek registration
as domestic companies under the Cook Islands Companies Act 1970-71 or as 'International Companies' under the Cook
Islands International Companies Act 1981-82.
i] International Companies
A Company can be incorporated as an international company if its shareholders are non-resident of the Cook Islands,
however, a trustee company registered under the Trustee Companies Act 1981-82 may hold shares in an international
company and may be the sole shareholder.
There are no minimum capital requirements and shares may be of no par value. Shares may be designated in all major
currencies and bearer shares may be issued and registered shares that have been fully paid may be exchanged for
bearer shares unless this is prohibited by its Articles of Association.
Provision is made for bearer debentures, conversion of bearer debentures to registered debentures, perpetual debentures
and for the re-issue of redeemed debentures. There is also provision for voting rights of shareholders to be suspended
while certain types of debentures are in issue.
Only one director of an international company need be appointed and there is no obligation to appoint a resident
director. It is obligatory to have a resident secretary who must be an officer of a registered trustee company.
additional secretaries may be appointed who need not be residents.
An international company may be incorporated for any lawful purpose, other than that of a trustee company, but
shall not carry on the business of banking or insurance, unless it is licensed under the relevant Act. It cannot
carry on business in the Cook Islands unless it is registered under the Development Investment Act 1977.
Special Features
Transfer of Corporate Domicile:
One of the essential criteria for international tax planning is flexibility. There should by an ability to modify
promptly an offshore structure as a consequence of change in circumstances and the Cook Islands legislation permits
such flexibility through provisions which enable a company to transfer its domicile:
The International Companies Act enables:-
 companies incorporated in other
jurisdictions to transfer their registration to the Cook Islands as international companies
international companies to transfer
their registration to other jurisdictions.
Anonymity and Secrecy
Principals or promoters of international companies may remain anonymous as there is no obligation to disclose any
details of beneficial ownership of shares. Such anonymity is further guaranteed by virtue of the provisions of
Section 8(5) of the Act which imposes penal sanctions on any person who discloses information derived from an inspection
of the records of the international company. The documents lodged with the Registrar of International Companies
are only available for inspection by directors, members and debenture holders.
Court proceedings relating to the rights or obligations of officers of members or debenture holders must be heard
in camera, unless the Court orders otherwise.
ii] Foreign Companies:
A foreign company incorporated outside the Cook Islands may register under the International Companies Act 1981-82
(if it has a place of business or is carrying on business within the Cook Islands) or under the Companies Act 1970-71.
Registration under either Act does not exempt a foreign company from compliance with the requirements of registration
under the Development Investment Act if it is a 'foreign enterprise', as defined under that Act.
iii] Domestic Companies;
Domestic companies are incorporated under the provision of the Companies Act 1970-71. A domestic company which
is a 'foreign enterprise' under the provisions of the Development Investment Act 1977 can only carry on business
in the Cook Islands if it is registered under the Act.
A domestic company is not exempted from any income or other tax, duty or excise and would normally be subject to
income tax at the prevailing rate of 20 per cent.
Accounts
The Company must maintain proper books and accounts.
Annual General Meetings:
Annual General Meetings must be held or written resolution passed in lieu thereof, such resolutions must be signed
by all the members of the Company entitled to vote at an AGM. Such meetings need not be held in the Cook Islands
if all the members so agree.
Annual Return
All companies must lodge annual returns accompanied by audited accounts unless the members of the Company (being
a private company) resolve at each annual general meeting that auditors should not be appointed.
Summary
The attractions of the Cook Islands as an offshore financial centre can be summarised as:-
 Exemption from all Cook
Islands taxes
A long history of social and
political stability
Excellent communications
Economic stability
Modern offshore legislation
providing maximum flexibility
Exemption from exchange controls
An established domestic banking
system with proven international connections
A well developed economic and
commercial infrastructure
Immediate company availability
Key Features Table
| General |
|
| Political Stability |
Good |
| British Based Legal System: |
Yes |
| Type of Company: |
Intl. |
| Disclosure of Beneficial Owner: |
No |
| Migration of Domicile Permitted: |
Yes |
| Tax on Offshore Profits: |
Nil |
| Chinese Names Allowed: |
Yes |
| Corporate Requirements |
|
| Minimum number of shareholders: |
1 |
| Minimum number of Directors: |
1 |
| Bearer shares common: |
Yes |
| Corporate Directors permitted: |
Yes |
| Secretary required: |
Yes |
| Standard authorised capital: |
US$1,000 |
| Local Requirements |
|
| Regd Office/Agent: |
Yes |
| Company Secretary: |
Yes |
| Local Directors: |
No |
| Local Meetings: |
No |
| Gov't Register of Directors: |
Yes |
| Gov't Register of Shareholders |
No |
| Annual Requirements |
|
| Annual Return: |
Yes |
| Audited Accounts: |
No |
| Recurring Costs |
|
| Annual tax/licence fees: |
US$500 |
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