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Company and Jurisdictions

Turks and Caicos Islands

Exempt Company

Legislation: Standard capital:
Companies Ordinance 1981 (as amended). USD 5,000 is the maximum capital for which minimum registration fees apply.
Annual government fees: Corporate Taxation:
USD 300 for one year; USD 1,000 for five years; USD 1,500 for 10 years; and USD 2000 for 20 years. Zero
Time to incorporate: Ready-made companies:
24 hours Available.
Minimum members: Registered office required:
One, individual or corporate. Yes, must be maintained in Turks & Caicos.
Local registered agent: Minimum number directors:
Yes. One, individual or corporate. Details of directors do not appear on the public file, except when filed voluntarily.
Officer to be locally resident: AGM required:
No. No.
Annual return required: Financial statements to be prepared and/or audited:
Each company must file a short statement indicating that it has traded mainly outside the islands and has complied with the various statutory requirements. No audit required Company is required to keep financial records reflecting financial position of the company but there is no need to lodge or record these with the authorities.
Balance sheets to be filed: Share register required:
No. Yes, at registered office
To be filed with Registrar: Open to public inspection:
No. No, but open to other members
Exchange controls: Redomiciliation permitted:
No. Yes, in and out.
Language of incorporation: Confidentiality:
English. Companies Ordinance and the Confidential Relationships Ordinance 1979 make it an offence anybody to reveal confidential information, including details of the owners and directors, about a TCI exempt company or to threaten to reveal such information.
Bearer shares permitted:  
Yes, but must be immobilised by lodging with an approved custodian.

Advantages

Disadvantages


  • Governing legislation modelled on the law of the Cayman Islands, widely regarded as the premier offshore jurisdiction. TCI therefore provide a similar yet relatively inexpensive alternative to the Cayman Islands.
  • All companies get a twenty-year guarantee of exemption from future taxes and increases in government taxes.
  • Very quick formation procedures.
  • Good name availability.
  • Good legal services.
  • Due to a lack of marketing TCI does not have as high a profile as many other Caribbean jurisdictions.

International Agreements

OECD Harmful Tax Practices

The TCI was among 35 jurisdictions identified by the OECD in June 2000 as meeting the technical criteria for being a tax haven. On 8 March 2002, the TCI government signed a commitment to improve the transparency of its tax and regulatory systems and establish effective exchange of information for tax matters with OECD countries by 31 December 2005.

Tax Information Exchange Agreement (TIEA)

None

EU Savings Tax Directive

The TCI Government has committed to implementing the EU Savings Directive. It will apply a withholding tax in respect of savings income in the form of interest payments to EU citizens during the transitional period that commences on 1 July 2005, subject to equivalent compliance from Switzerland, Liechtenstein, San Marino, Monaco and Andorra.

Financial Action Task Force (FATF)

TCI’s regulatory regime was reviewed by the FATF in 2001. It was found to have a “comprehensive” anti-money-laundering system and was not therefore identified by the FATF as a non-cooperative country or territory (NCCT) in the fight against money laundering. The TCI is a member of the Caribbean Financial Action Task Force, and is subject to the 1988 UN Drug Convention.

Mutual Legal Assistance Treaties (MLATs)

The Treaty between the USA and the UK concerning the Cayman Islands relating to Mutual Legal Assistance in Criminal Matters was extended to the TCI on 9 November 1990.

The Overseas Regulatory Authority (Assistance) Ordinance 2001, allows the TCI to further assist foreign regulatory agencies. This assistance includes search and seizure powers and the power to compel the production of documents. The Financial Crimes Unit (FCU) of the Royal TCI Police Force also shares information with other law enforcement and regulatory authorities inside and outside of the TCI.

Tax Treaties

Not having any taxes other than customs duties and stamp duty, the TCI has not entered into any double tax treaties with other countries.


General Info

Full Country Name: Turks & Caicos Islands
Status: British Overseas Territory
Area: 430 sq km (193 sq miles)
Population: 20,556 (2005 est.)
Capital City: Grand Turk
Nationality: Turks & Caicos Islander
People: Afro-Caribbean 90%, mixed, European, or North American 10%
Languages: English (official), some Creole spoken
Currency: US Dollar
Government: internal self-governing British Overseas Territory with a ministerial system of government
Legal system: based on English common law, with a few adopted from Jamaica and The Bahamas
Head of State: HM Queen Elizabeth II

Geography

The Turks & Caicos Islands (TCI) forms the south-eastern extremity of the Bahamas chain and lie 90 miles north of Haiti and the Dominican Republic and 575 miles southeast of Miami in the Caribbean. The territory comprises some 40 islands and cays (pronounced keys) split into two groups by a deep-water channel. Only six of the islands are permanently inhabited: Grand Turk (where the capital Cockburn Town is situated); Salt Cay; South Caicos; Middle Caicos; North Caicos and Providenciales (known as Provo, where the majority of the tourism development is). There are a number of hotel developments and holiday homes on smaller cays. The climate is warm throughout the year but tempered by constant trade winds. The islands are rocky, semi-barren and covered with cacti and thorny acacia trees.


History

Juan Ponce De Leon first discovered these uninhabited islands in 1512. Locals claim that the islands were the first landfall of Christopher Columbus in 1492. For several centuries the islands changed hands between the French, Spanish and British. They remained virtually uninhabited until 1678 when they were settled by a group of Bermudians who started to extract salt and timber. Loyalists established Cotton plantations after the American Revolution. But this was short lived. By 1820 the cotton crop had failed and the majority of planters moved on.

The islands became a formal part of the Bahamas in 1799. In 1848 the islanders petitioned for and were granted separate colonial status with an elected Legislative Board and an administrative President. In 1872 the islands were annexed by Jamaica and remained tied to them until Jamaica became independent in 1962. The TCI then became a Crown colony with an Administrator rather than a Governor. In 1965 the Governor of the Bahamas also became the Governor of TCI. When the Bahamas became independent in 1973 TCI finally got its own Governor.


Government and Politics

Executive branch
Head of State: Queen Elizabeth II (since 6 February 1953), represented by Governor Jim POSTON (since 16 December 2002)
Head of Government: Chief Minister Michael Eugene Misick (since 15 August 2003)
Cabinet: Executive Council consists of three ex officio members (The governor, Chief Secretary and the Attorney General) and six appointed by the governor from among the members of the Legislative Council (The Chief Minister and his five Ministers)
Elections: none; the monarch is hereditary; governor appointed by the monarch; following legislative elections, the leader of the majority party is appointed chief minister by the governor
Legislative branch

Unicameral Legislative Council (19 seats of which 13 are popularly elected; members serve four-year terms)

Elections: last held 24 April 2003 (next to be held in 2007)

Election results:seats by party - PDM 7, PNP 6; note - in by-elections held 7 August 2003, the PNP gained two seats for a majority of 8 seats; PDM now has 5

Judicial branch

Supreme Court

Political parties and leaders

People's Democratic Movement or PDM (Derek H. Taylor); Progressive National Party or PNP (Michael Eugene Misick)

The Governor is responsible for external affairs, defence, internal security, offshore finance and certain other matters but is otherwise normally required to act on the advice of Exco.

The General Election on 24 April 2003 saw the ruling PDM returned for a third term, but the opposition PNP filed election petitions against the results in two of the 13 constituencies. On 19 June 2003, the Chief Justice declared the results in both districts void and the Governor, acting in accordance with the TCI Constitution, issued writs for by-elections in the two constituencies affected to be held on 7 August 2003.

The PNP won both seats in the by-elections giving them a majority of 8-5 in the Legislative Council. Derek Taylor resigned as Chief Minister on 15 August 2003. Michael Misick was sworn in as Chief Minister on the same day.


Economy

Basis economic facts

GDP (2002): US $216 million

Growth rate (2002): 4.9%

Per capita GDP (2002): USD 11,500

Main industries: Tourism, real estate, international finance and fishing

The economy is dependent on tourism, fishing and financial services. The Government encourages tourism, which attracts more than 100,000 visitors a year, and has also created TCInvest, to encourage inward investment with incentives. Financial services developed rapidly during the 1990s, and the key offshore sectors are banking, insurance and trust management. The TCI also has a popular yacht registry. There is a reasonable level of professional expertise on the Islands and costs are low by comparison with many jurisdictions. The TCI has no direct taxes such as income tax, corporation tax, capital gains tax, profit tax, gift tax or death duties. Government revenue is derived mainly from import duties, stamp duty and business licences; there are some taxes on tourism.

As of 2003, the TCI’s offshore sector had eight banks (five of which also deal with onshore clientele), approximately 2,500 insurance companies, 1,000 trusts, and 13,000 "exempt companies" that are IBCs. The Financial Services Commission (FSC) licenses and supervises banks, trusts, insurance companies, and company managers; it also licenses IBCs and acts as the Company Registry for the TCI. The FSC became a statutory body under the Financial Services Commission Ordinance 2001 and became operational in March 2002, and now reports directly to the Governor.

The Companies Ordinance 1981 was closely modelled on the equivalent Cayman Islands law and is extremely flexible and provides in the shape of an exempted company for a minimum of disclosure. Meetings need not take place in the TCI, the objects may be unrestricted and details of shareholders and directors need not appear on any public record. An exempt TCI company receives a certificate issued in the name of the Governor that guarantees that the company will be exempt from all forms of taxation, both in respect of its own operations and on the shares in the company, for a period of 20 years from its date of incorporation.

Companies may be incorporated with a translation of the English name appearing on the Certificate of Incorporation. The name may be represented in any foreign language or characters. Additionally, a foreign language translation of the Memorandum and Articles of Association may be officially registered alongside the English version. Thus, for example, the Certificate of Incorporation could bear both an English name and a translation of that name in Chinese characters. A Chinese character version of the Memorandum and Articles of Association could also be registered.

The offshore sector offers "shelf company" IBCs, and all IBCs are permitted to issue bearer shares; however, the Companies (Amendment) Ordinance 2001 requires that bearer shares be immobilised by depositing them, along with information on the share owners, with a defined custodian. This applies to all shares issued after enactment and allows for a phase-in period for existing bearer shares of two years. Trust legislation allows establishment of asset protection trusts inoculating assets from civil adjudication by foreign governments; however, the Superintendent of Trustees has investigative powers and may assist overseas regulators.

The 1998 Proceeds of Crime Ordinance criminalised money laundering related to all crimes and established asset forfeiture provisions and "safe harbour" protection for good faith compliance with reporting requirements. The Law also establishes a Money Laundering Reporting Authority (MLRA), chaired by the Attorney General, to receive, analyse, and disseminate financial disclosures such as suspicious activity reports (SARs). The MLRA is authorised to disclose information it receives to domestic law enforcement and foreign governments

Historically TCI has had strong links with Jamaica, to which it remained tied until well into the twentieth century. Foreign investors, mainly from Canada, the UK and the US play a significant role in the islands’ economic life. More than half of the tourists to TCI come from the US.

There are no tax treaties and the TCI’s mutual assistance arrangements with other countries do not include fiscal crime.





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