Choosing A Jurisdiction

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Turks & Caicos

The Turks & Caicos Islands are a group of 30 tropical islands situated in the North Atlantic Ocean, southeast of the archipelago of the Bahamas. Six of the islands are inhabited, those being, Grand Turk, South Caicos, Middle Caicos, North Caicos, Providenciales and Salt Cay. The population of the Turks and Caicos Islands is approximately 19,000, of which nearly 80% are of African descent. In 1973, the Islands became a British Crown Protectorate, with HM queen Elizabeth the second as acting Head of State. A Lt. Governor represents the Queen.

The economy is based primarily on fishing. The only farming undertaken is subsistence farming of corn, cassava, citrus and beans. Most other produce is imported. Tourism has become an important source of foreign exchange. In 1984, the Turks and Caicos Islands introduced the Companies Ordinance, which was the foundation of the Island’s finance center. In 1989 the ordinance was amended to provide for the Exempt Company. There are frequent flights to neighboring islands and to the US. The official and spoken language is English although French Creole is also spoken.

SALIENT FEATURES

Turks and Caicos companies are widely used for a variety of purposes including asset protection, investment or property holding companies, international trading and re-invoicing activities, international service companies and generally for the purposes of tax efficiency. A good geographical position, the US dollar as the legal currency, political stability, well established infrastructure and regulatory system, a wide range of professional services and a high degree of confidentiality, makes Turks and Caicos companies an attractive option.

Since the enactment of the Companies Amendment Act No. 2 of 1992, the Exempt Company is the most commonly used body corporate for international trade and investment purposes. Exempt companies (IBCs) are exempt from all forms of taxation for a period of twenty years from the date of incorporation. Such companies cannot trade within the Turks and Caicos Islands and may not own real estate there. They also cannot undertake the business of banking, Insurance, Assurance, Re-Insurance, Fund Management, collective Investment Schemes, the rendering of investment advice or any other activity which may suggest an association with the banking and insurance industries. The company may not solicit funds from the public or offer its shares for sale to the public. The company incorporated in the Turks and Caicos Islands has all the power of a natural person. Shelf companies are available and incorporation normally takes about two days.

The company may buy back its own shares. The islands are not pay to any tax treaties and there are no provisions for the exchange of tax information with or enforcement of tax judgments by another government.

CORPORATE REQUIREMENTS

Name: There are restrictions on the use of names, which in the opinion of the Registrar are undesirable or obscene. It is also prohibited to register a company name that is similar or identical to the name of a company already in existence, or any name that suggests royal or government patronage. The name can be in any language using the Latin alphabet or Chinese (a translation is required). Certain names require consent or a license, including, Bank, Building Society, Insurance, Assurance, Re-Insurance, Fund Management, Investment Funds, Friendly Society, Trust, Trustee, Guarantee, Indemnity, Underwriters, Co-operative, Commonwealth or their foreign language equivalents.

Shareholders / Secretary: The minimum number of shareholders is one. All companies incorporated in the Turks and Caicos Islands are required to appoint a company secretary. The company secretary may be a natural person or body corporate, be of any nationality and need not resident in the Turks and Caicos Islands.

Capital/Shares: There is no minimum authorized or paid up capital. It is normal to incorporate an exempt company with an authorized share capital of $5,000 divided into 5,000 common voting shares of US$1.00 each, this being the maximum capital for the minimum duty payable at the time of incorporation. Thereafter, if the authorized share capital exceeds $5,000, the capital duty is increased by 1% of any increase up to $50,000, by 0.5% of any increase over $50,000 and by 0.5% of any amount over and above $50,000 and by the 0.1% of any amount over and above US$100,000. The minimum issued capital is one share with no par value or one share with par value.

Classes of Shares Permitted: Registered shares, shares with our without a par value, preference shares, redeemable shares and shares with or without voting rights. Turks and Caicos have recently enacted an amendment to the Companies Ordinance in relation to bearer shares, where the mobility of the shares has been restricted. Bearer shares should be maintained within the island, unless the agent produces to the Registrar a certificate issued by an authority equivalent to the financial services commission stating that the custodian of the bearer shares is licensed and supervised by an authority in the jurisdiction of domicile and is subject to a legislation acceptable by the Proceeds of Crime Ordinance 1998. The beneficial ownership of bearer shares should be disclosed to the company agent.

Registered Office/Agent: A registered office must be maintained in the Turks and Caicos Islands at the address of a licensed management company.

Directors & Officers: The minimum number of directors is one. The directors may be natural persons or bodies corporate. They may be of any nationality and need not be residents of the Turks and Caicos Islands. There is no obligation to hold an annual general meeting.

Register of Members: There is no requirement to file with either the government or the Companies Registry the names of the shareholders; directors or officers of an exempt company and no information relative to it may be disclosed by the Registry.

Books, Records and Seals: The Companies Ordinance 1981 requires that Exempted Companies file a statutory annual declaration during the month of January in each year and at that time pay their prescribed Government Fee.

Time to incorporate: two days

CONFIDENTIALITY

There is no requirement of disclosure of beneficial ownership to the authorities. The country is not party to any double taxation agreement could obligate the disclosure of information on clients to tax authorities in other countries.

EXEMPTION FROM TAX

The Turks & Caicos Islands has no direct taxation in the form of income tax, corporation tax, capital gains tax and inheritance tax or gift tax. No double taxation agreements.

A $300 annual license fee is payable in January of each year.

TRANSFER OF FUNDS

The currency in use is the US Dollar. Companies may transfer funds in and out of the Islands without any exchange control or restrictions.


Disclaimer:

Every effort has been made to ensure the material contained in this document is correct at time of publishing. However, this information should be interpreted as information only and does not constitute any legal or tax advice from Sequestra Corporation or any of its subsidiaries.