Skip to main content


In 1982, Southpac Group began working with a range of asset protection professionals to develop new protective trust laws in the Cook Islands. Fast forward over forty years, and today Southpac provides professional trustee services in three jurisdictions: the Cook Islands, Nevis and New Zealand. However, not all jurisdictions offer the same benefits.

Offshore trustee services are desirable to many business professionals in high-risk sectors, business owners or affluent individuals looking to help manage, protect and pass on generational wealth. This is especially the case for United States persons given the high prevalence of litigation in the US. With decades of industry experience, Southpac prides itself on providing high-quality service to clients who are looking to protect their assets and safeguard their legacies.

There are multiple trust jurisdictions around the world and some are better-known than others. The Cook Islands and Nevis are two of the most attractive jurisdictions for asset protection trusts. This article sets out some of the primary differences between Cook Islands and Nevis trusts.


A Cook Islands asset protection trust is deemed one of the “top tier” asset protection trusts on the market. The relevant law was passed in 1984 and is known as the Cook Islands International Trusts Act, as amended (‘ITA’). Ten years later, after the Cook Islands paved the way for the offshore asset protection market, Nevis modelled their trust laws off the ITA and established the Nevis International Exempt Trust Ordinance 1994, as amended (‘NIETO’).

The Cook Islands and Nevis trust laws share substantially similar asset protection benefits. Any assets placed into a trust in either jurisdiction are protected from unknown future creditors. Foreign judgments are not recognised to the extent they are inconsistent with trust legislation, and a court will only allow trust assets to be made available to a creditor where that creditor proves, beyond a reasonable doubt and within the applicable statute of limitations, that the transfer of those assets into the trust was intended to defraud that creditor and rendered the settlor of the trust unable to pay that creditor. However, there are also key differences between the jurisdictions, namely:

I. Nevis Bond Requirement;

II. Statute of Limitations for Fraudulent Conveyance;

III. Available Forms of Trusts;

IV. Compliance Requirements; and

V. Case Law.

Nevis Bond Requirement

A primary legislative difference between the Cook Islands and Nevis is the bond requirement in Nevis. Under section 55 of the NIETO, the bond payable by a creditor seeking to bring proceedings in Nevis relating to an international trust to the Nevis Ministry of Finance is USD 100,000 (ECD 270,000). This must be paid before proceedings commence and is to cover all costs that may be payable by the creditor in the event they are not successful in their proceedings against the trust. Having a bond requirement makes Nevis a very appealing jurisdiction, as it can strongly deter any creditors from commencing any proceedings against the Nevis trust.

Consideration has been given in the Cook Islands to introducing a bond requirement to the ITA, but at the date of writing this has not been implemented.

Statute of Limitations for Fraudulent Conveyance

Under the ITA and NIETO, the limitation period for fraudulent conveyance claims to be brought by a creditor is slightly different. Under section 13B(3) of the ITA a creditor may only bring proceedings in the Cook Islands if the disputed transfer to the trust occurs within two years of the creditor’s cause of action accruing, and if the creditor commences proceedings in relation to that cause of action in any court within one year of the disputed transfer. Section 13B(3) does not apply where a creditor has already commenced proceedings in respect of their cause of action in any court at the date of the disputed transfer.

In comparison, under sections 23(3) and 24(3) of NIETO, a creditor may only bring fraudulent conveyance proceedings if the disputed transfer to the trust occurs before the expiration of one year from the date that such creditor’s cause of action accrued or originated.

Nevis therefore has a shorter statute of limitations where property is transferred to a trust after a creditor’s cause of action has arisen, and does not disapply this where the creditor has already brought proceedings relating to their cause of action at the date of transfer.

Available Forms of Trusts: 

A third key difference between the Cook Islands and Nevis lies in the different types of trusts the jurisdictions offer. Whilst both jurisdictions permit the creation of Charitable Trusts, Non-Charitable Trusts and Spendthrift Trusts, the Cook Islands offers an additional option: on 4 December 2021, the government enacted the International Relationship Property Trusts Act 2021 (the ‘IRPTA’). The IRPTA allows for two individuals (in a relationship) to establish a trust known as an International Relationship Property Trust. If they separate, the IRPTA provides for the relationship property settled on the trust to continue to be held in trust to provide support to trust beneficiaries rather than being distributed to the trust settlors.

More information on this type of International Relationship Property Trusts can be found here

Compliance Requirements

A fourth key difference between the Cook Islands and Nevis, is a due diligence requirement. In Nevis, under the Financial Services (Implementation of Industry Standards) Regulations 2011, as amended, there is a requirement for reference letters to be submitted when establishing an entity through a Nevis registered agent. Thus, the following two reference letters will be required alongside other client due diligence:

1. Banking reference letter – from a recognized banking institution which is on bank letterhead, signed and dated; and

2. Professional reference letter – from a member of a recognized professional body such as an attorney or a CPA, and which is on a professional letterhead, signed and dated.

The  Cook Islands does not require the submission of reference letters by law, although these may be requested for higher-risk clients from time to time.

It is important to mention that both jurisdictions do not have a register of beneficial ownership. The due diligence documents collected from beneficial owners shall only be kept within the registered agent’s office and may not be made available to third parties except in limited circumstances, granting privacy to such persons.

Case Law

Lastly, the Cook Islands boasts a small but important body of case law in which the Cook Islands courts have upheld and applied the terms of ITA. This can be seen in cases like FTC v Affordable Media (1999), where the Cook Islands High Court upheld the validity and protective features of a trust, including its duress and compulsion provisions.

In the nearly thirty years since NIETO’s enactment, the Nevis courts have yet to hand down a judgement on the validity of a Nevis trust. It is expected that a similar outcome would result from those seen in the Cook Islands, due to the similarities between the ITA and NIETO. However, a trust of any kind must be established and operated correctly, retaining its core features as a trust, for a court to deem it valid. This can be seen in the UK Privy Council’s ruling in Webb v Webb [2020] UKPC 22 in which a Cook Islands domestic trust was held to be invalid due to the multiple roles the settlor held and how he had exercised his powers.


While there are many similarities between the ITA and NIETO, there are significant differences between the Cook Islands and Nevis as jurisdictions which must be considered by anyone considering where to establish an offshore trust.

If you wish to discuss the establishment or maintenance of a Cook Islands or Nevis trust by a professional fiduciary, please get in touch with your regular Southpac contact or through our website: Contact Us

Disclaimer: the above contains the opinion of the author and is for information purposes only. It is not intended to constitute legal or tax advice. If you are considering establishing an offshore structure, please consult with legal and tax professionals in your jurisdictions of residence, domicile and tax residence beforehand.

Close Menu


Level 1/399
Cameron Road,
Tauranga 3110
New Zealand