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Cook Islands

Trust

The Cook Islands was one of the first jurisdictions to enact explicit asset protection and international trusts law, being one of the most popular for such matters.

Trust laws in the Cook Islands limit fraudulent transfer claims for 2 years and in some circumstances, it may be less than one year.

If the assets are transferred in a period in which the settlor is solvent, the transfer of funds cannot be set aside.

The legal provisions in force also establish certain conditions for a person to be able to be considered as the creditor and able to file a lawsuit before a court in the Cook Islands.

These provisions raise the burden of proof beyond reasonable doubt, for such reason, confidentiality laws prohibit the disclosure of banking information, except if there is the consent of the client.

The Government of the Cook Islands requires compliance with certain provisions that must be met in order to ensure the honesty and integrity of the funds transferred to the rust. Therefore, the assets that make up the trust cannot come from the exercise of illegal and fraudulent activities such as drug trafficking and money laundering.

Foreign judgments are not enforceable. If any person wants to file suit against the trust, he must hire an attorney in the Cook Islands to initiate the action, which is subject to strict compliance with requirements for him to proceed.

The settlor can maintain control over the trust and its property if it so provides.

Foreign bankruptcy rules are excluded.

The law specifies that fraudulent transfers are understood to require compliance with requirements to be assessed by a court.

The trust cannot be affected by the rules regarding heirs or spendthrift beneficiaries in the settlor’s jurisdiction.

Trusts may hold shares in underlying companies, without concern about the financial benefits of retaining such shares. Likewise, in relation to the foregoing, the ability of the settlor to supervise and intervene in the affairs of an underlying company may be limited.

Taxes

A trust established in the Cook Islands may not be subject to local taxes applicable to the assets and income of the trust, provided that no residents of the Cook Islands benefit from the trust and no physical assets are located there.

It must be noted that the choice of law of the trust would not be applicable to tax matters, which would be governed by the respective jurisdiction where the settlor, beneficiaries, assets or trustee are located, as applicable.

You should consult with your tax advisor or accountant to know the tax implications in your jurisdiction of residence when establishing a trust in the Cook Islands , transfer assets to it and receive profits from said assets.

  • 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
  • - 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

Cook Islands
NZD
Avarua
Oceania
en-CK, mi
21,388

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.

Tax treaties

Country Type Date Signed
Netherlands TIEA 2009-10-23
Ireland TIEA 2009-12-08
Greenland TIEA 2009-12-16
Norway TIEA 2009-12-16
South Africa TIEA 2013-10-25
Iceland TIEA 2009-12-16
France TIEA 2010-09-15
New Zealand TIEA 2009-07-09
Faroe Islands TIEA 2009-12-16
Finland TIEA 2009-12-16
Denmark TIEA 2009-12-16
Sweden TIEA 2009-12-16
Korea, Republic of TIEA 2011-05-31
Mexico TIEA 2010-11-22
Czech Republic TIEA 2015-02-04
Australia TIEA 2009-10-27
Germany TIEA 2012-04-03
Greece TIEA 2013-02-12
Canada TIEA 2015-06-15
Italy TIEA 2011-05-17

Tax treaties Map

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Services

We can help you incorporate a Trust in Cook Islands.
Please, contact us to request a free, no obligation consultation.

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