Limited Liability Company
The Cook Islands’ Limited Liability Companies Act was enacted in 2008 to enhance its offshore sector offer. Following the model adopted in several U.S. States, a Cook Islands LLC is a flexible entity that allows to form its structure according to its operating agreement, rather than dictated by rigid legal statutory mandates.
A Cook Islands LLC is a hybrid of both partnership and corporate structures, protecting LLC members from the debts incurred by the entity and separating the rights of its members and that of the LLC.
Besides the aforementioned structural flexibility, Cook Islands LLCs benefits from confidentiality, no reporting requirements, and tax-exemption.
The Cook Islands are an offshore financial destination distinguished for its asset protection laws, ensuring the assets of foreign Cook Island investors.
A creditor cannot issue a charging order or interfere with the operations of an LLC nor seize, liquidate or force the dissolution of the company, any member of a Cook Islands LLC with a charging order can still act and exercise their rights as a member and any order that is a result of judgment in another location outside of the Cook Islands will not be enforced or recognized in the courts of Cook Island.
All in all, the Cook Islands LLC used in conjunction with a Cook Islands International Trust, may be one of the best asset protection tools available worldwide.
Legal
Country code – CK
Legal basis – Common law
Legal framework – Limited Liability Companies Act 2008
Company form – Limited Liability Company (LLC)
Liability - The liability of members is limited to the extent of their capital contributions.
Capital – There is no need to register a minimum or maximum capital contribution and there are no restrictions on capital contributions subsequent to formation.
Members – A Cook Islands LLC may be set up by one or more members, who may be natural or legal persons, resident or non-resident, without limitations. There is no public LLC Registry. The identity of the LLC registered members is not available to the public.
Manager – LLC members may act as managers, or alternatively, they may appoint a manager. Corporate managers are allowed. Details are not available to the public.
Registered Address – LLCs require to appoint a Cook Islands Trustee company as a registered agent.
General Meeting – There is no statutory requirement for any formal meetings of members.
Electronic Signature – Permitted.
Re-domiciliation – LLCs may transfer their domicile from the Cook Islands to another jurisdiction and LLCs from other jurisdictions may seek registration in the Cook Islands under the legislation.
Compliance – An LLC is required to keep accounting records that are sufficient to show the position of the LLCs transactions with reasonable accuracy; these records must be retained by the resident agent within the Cook Islands.
No requirement to file annual accounts, appoint auditor or disclose any information to any Cook Islands authority. The only information that is given is through an annual return with the Registrar, giving the name of the LLC and address of the Registered Agent.
- Members not disclosed
- Members not disclosed
- Corporate members permitted
- Corporate manager permitted
- Local manager required
- Registered office or agent required
- Annual meeting required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum members
- - Minimum registered capital
- - Minimum paid up capital
- USDAny Capital currency
- 100% Foreign-ownership allowed
- 2018 AEOI
Taxes
Corporate income tax – LLCs are fully exempt from taxes as long as they do not offer their goods or services to residents of the Cook Islands, do not generate income from assets situated in the Cook Islands, and are not registered under the under the Development Investment Act.
(1) Subject to subsection (2), no enactment of the Cook Islands other than this Act and the enactments set out in the First Schedule to this Act, or any regulation, by-law or rule made thereunder shall -
(a) impose –
(i) any liability, duty, responsibility, obligation or restriction;
(ii) any fee, impost, tax, levy, dues, duty or excise; or
(iii) any fine or penalty on a limited liability company; or
(b) require –
(i) the deposit of any moneys in any public account by;
(ii) the filing of any accounts, returns, reports or records by; or
(iii) the licensing or registration of a limited liability company.
Subsection (2) provides that (2) Notwithstanding subsection (1), a limited liability company shall not be required to register as a foreign enterprise pursuant to the provisions of the Development Investment Act 1995-96 and shall not be subject to that Act by reason only that it –
(a) carries on business with another limited liability company;
(b) carries on business with an international company incorporated pursuant to the International Companies Act 1981-82;
(c) carries on business with a foreign company registered pursuant to the International Companies Act 1981-82;
(d) carries on business with an international partnership formed pursuant to the International Partnership Act 1984;
(e) carries on business with an international trust registered pursuant the International Trusts Act 1984;
(f) obtains legal or other professional or specialist advice or services;
(g) obtains accounting advice or has its accounts audited;
(h) operates a bank account for the purposes of investment or depositing, receiving or transmitting money due or owing by the company, or undertakes transactions with a bank for purposes associated with the company;
(i) utilises the services of a trustee company;
(j) undertakes such other activity as may be prescribed by regulation.
Other taxes – In the Cook Islands, there is no capital gains tax, inheritance tax or estate duty, capital transfer tax, gifts tax or wealth tax. The main tax on resident individuals is an income tax at a maximum rate of 30% on income exceeding NZD 24,000.
There is VAT at 12.5 and stamp duty on some official transactions. There are import duties ranging from 0%–150% percent, with an average effective rate of slightly over 10% on the CIF value of all imported goods. However, the aforementioned is not generally relevant for LLCs, as LLCs generally conduct business outside of the Cook Islands only.
- Tax transparent entity
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- - Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- 30% Personal Income Tax Rate
- 12.5% VAT Rate
- 20 Tax Treaties
Country details
The Cook Islands is an archipelago of fifteen small islands, located in the South Pacific Ocean, between Hawaii and New Zealand. It is a member of the Commonwealth and it is freely associated with New Zealand. Cook Islands citizens are also New Zealand citizens.
The islands have a combined area of 236 sq. km, but the Exclusive Economic Zone occupies more than 1,800,000 square kilometers of ocean.
It is populated by about 21,000 inhabitants. Most of them living in Rarotonga Island, where is found its capital Avarua and its international airport.
Its official languages are the Cook Islands Māori and English. Its official currency is the Cook Islands dollar and the New Zealand dollar, the first pegged to the second.
The Cook Islands is a dependency with a representative parliamentary democracy, where the Chief Minister is the Head of State. The islands are self-governing in free association with New Zealand and are fully responsible for internal affairs. New Zealand retains some external affairs responsibilities, in consultation with the Cook Islands.
Its economy, like other South Pacific islands economies, is hampered by its isolation, lack of exploitable natural resources, a natural disaster-prone location, and poor infrastructure. Tourism is the main source of income and, to a lesser extent, the cultivation of tropical fruits and their processing, manufacture of clothing and handicrafts.
In addition to tourism, the other main economic sector is the offshore industry. The Cook Islands has attractive legislation that makes it possible to set up tax-free international companies, offshore banks, insurance companies, and asset protection trusts.