BY NICOLE SILVER
An International Business Company (IBC) can be established in the Cook Islands under the International Companies Act 1981-1982.
The Cook Islands is an ideal IBC jurisdiction because it is a politically and economically stable country. The Cook Islands has enacted strict privacy laws and only provides a closed registry where the names of directors and shareholders are not made public. IBC’s can be formed quickly and operated with flexibility and administrative ease thanks to progressive legislation in the Cook Islands.
Unlike a Limited Liability Company, an IBC is much like a traditional company or corporation. It is governed by a document called the Memorandum and Articles of Association which sets out the rules for how the company is managed and how shares may be transferred or sold for exampled.
Some potential uses of an IBC are international investment activities, forex and stock trading, professional service company, commercial transactions, international banking, tax and wealth planning as well as asset protection.
An IBC in the Cook Islands may also act as a private trustee company for a Cook Islands Trust. This is a unique opportunity for clients with an understanding of Trusts to manage their own Trusts with the protection of the Cook Islands Legislation. The IBC can be the Sole Trustee, the registered agent provides a registered office for the company and the Trust.
There is no minimum share capital requirement for Cook Islands IBCs, meaning the share capital can be any selected number. Shares can be issued with no par value which can make transferring shares a simple exercise. Shares can also be designated in most major currencies.
There are three main roles involved in the operation of a Cook Islands IBC; the shareholder, director and resident secretary.
There must be at least one shareholder. The shareholder can be an individual or a company from any country. This provides maximum opportunity should you ever sell the shares in your company.
There is only one director required and they need not be a resident of the Cook Islands. The director can, like a shareholder, be an individual or company from any country around the world. The powers afforded to the director/s are outlined in the Memorandum and Articles of Association.
The resident secretary is a legislative requirement. This position is normally filled by the registered agent, a licensed Trustee Company in the Cook Islands. The resident secretary also provides the principal office or registered office for the company.
IBCs do not acquire any tax liability for commercial activity and transactions made outside of the Cook Islands making them an invaluable asset for wealth and tax planning.