The Cook Islands are situated in the south pacific ocean and are officially an associated state and a part of the “Realm of New Zealand”. Cook Islands Offshore Foundations are useful offshore financial vehicles, most commonly used for estate planning and asset protection. The islands are more popularly known for their Cook Islands Trust, which is one of the most respected and ironclad structures in the world.
However, the foundation does provide an appealing alternative if cost is a factor, as the trust can cost upwards of 10,000USD the Foundation is much more reasonably priced at 3,000-5,000USD. The Cook Islands Foundation offers all the features of a typical foundation, with some additional benefits which are unique to the jurisdiction which will be discussed below.
Cook Island foundations are governed by the Foundation Act of 2012, which provides a number of favorable clauses and protective measures for foundations.
Foundations can be entirely foreign-owned, are easy and affordable to form, and offer a very high degree of privacy, asset protection, and tax efficiency.
Other Cook Islands structures that are popular on the islands are the:
The use of the above structures will be slightly different than the Foundation, however, there is a lot of overlap. Get in touch to know more.
Go here, for more information on the Cook Islands as an offshore tax haven.
Cook Islands foundations are governed by the Foundation Act of 2012.
Cook Islands Foundations provide the utmost privacy. Although nominee founders are not permitted, the names and information of the founders, the beneficiaries and the council members are not published in any public records. There are even provisions in the Act that make it illegal to disclose unauthorized information about the foundation and the identities of its associated parties.
In addition, information pertaining to the foundation’s assets is very well protected, and so are the assets themselves. The following stipulations make it extremely difficult for claims to be made against the foundation’s assets:
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There is only one legal document, the “foundation instrument”, which needs to be filed with the Registrar for the formation of a foundation. This document contains basic information such as the foundation’s name, its purpose, and the name and address of the local registered agent.
Cook Islands foundations are not subjected to any form of taxation. This does not mean that one is completely relieved of all taxes though, as some jurisdictions (like the US) may impose taxes on their citizens’ global income.
A foundation resembles a combination of a company and a trust. In many ways, it operates like a company, but it does not have shareholders and other distinct features of a company. Its governance is similar to a trust and, like a trust, it has beneficiaries. However, it does not have a limited lifespan and is regarded as a separate legal entity.
Cook Islands foundations are divided into Founders, Council Members and Beneficiaries. Beneficiaries are not strictly required, but each foundation must have a specified purpose which can be either charitable or non-charitable. The purpose can also be to benefit a specific natural person or persons.
Founders are those who create the foundation rules and provide funds and assets to the foundation. They can be natural persons or legal entities from any country.
Cook Island foundations are managed by their respective council. Only one council member is officially required. The manager of the foundation is known as the enforcer. Council members may be natural persons or legal entities from any country.
A Cook Islands Foundation may specify beneficiaries of the foundation, but they are not mandatory. They may be citizens/residents of any country. The beneficiaries do not have any legal or beneficial interest in the foundation’s assets. The council does not have any fudicial duties towards the beneficiaries.
The foundation should appoint an enforcer who is responsible for ensuring that the council fulfills its stipulated duties which are described in the foundation rules. These rules should also describe the duties and powers of the enforcer.
There are no minimum capital requirements; however the founder/s is required to contribute assets and/or funds to the foundation. Assets can also be provided by any third party, but this will not automatically make them a founder.
English common law.
A Cook Islands foundation is regarded as a separate legal entity (similar to a company/corporation), and can therefore exercise the same powers as a natural person. Founders’ liabilities are limited to the amount which they have invested/endowed to the foundation.
The foundation must appoint a local registered agent and maintain a local registered office. The address of the office can be the same as that of the local agent. The registered agent/office must keep the following in its possession:
None of the above documents are publicly accessible.
Foundations are required to maintain financial statements which accurately reflect their financial position, but these do not require auditing, nor do they need to be filed.
It can take approximately 3-5 working days to form and register a foundation.
The name of the foundation must be unique, i.e. it cannot be the same or very similar to any other legal entities in the Cook Islands. The name should end with the word “Foundation”. The name should not be deemed “offensive, misleading or otherwise undesirable”.
The primary purpose of a foundation is not generally to engage in regular commercial/trade activities. However, a foundation may engage in such commercial activities provided they are related to its stated purpose.
Disclaimer: Offshore Protection strives to keep information on this website updated, however, laws and circumstances are subject to change. All information on this website is for reference purposes only and does not constitute legal or tax advice. Contact Offshore Protection for specific advice regarding your situation.