Cook Islands


ESSENTIAL FACTS

LOCATION: 1 14 S, 159 46 W
Comprised of 15 atolls and islands halfway between Hawaii and new Zealand, most Cook Islanders live on the southern islands, which have a volcanic terrain.

POPULATION: 21,750

CURRENCY: NZ dollar (NZD)

LANGUAGE: English (official), Maori

CLIMATE: The Cook Islands have tropical oceanic climate. The wet season is from December to March.

EDUCATION: Of the total population, 95% can read and write.

PUBLIC HOLIDAYS: Constitution Day, first Monday in August (1965)

HISTORY AND GOVERNMENT

HISTORY
The Cook Islands were claimed by Britain in 1888, over 100 years after Captain Cook first found them. New Zealand gained ownership just 12 years later. In the 1965, the Cook Islands became a self-governing entity.

POLITICAL SYSTEM
The self-governing parliamentary democracy of the Cook Islands recognizes Queen Elizabeth II as their chief of state. In turn there is appointed a Governor who represents the Crown, and a High Commissioner. The people elect a Prime Minster, who then chooses the Cabinet. All answer to Parliament, which includes a Legislative Assembly and a House of Ariki.

JUDICIAL SYSTEM
The Cook Islands legal system is based on New Zealand law and English common law, with the High Court being the judicial branch.

COMMERCE AND TRADE

COMMERCIAL ACTIVITY
Agriculture: Copra, citrus, pineapples, tomatoes, beans, pawpaws, bananas, yams, taro, coffee; pigs, poultry
Industry: Fruit processing, tourism, fishing, clothing, handicrafts

TRADE PRACTICES
Exports: Copra, papayas, fresh and canned citrus fruit, coffee; fish; pearls and pearl shells; clothing to Australia, Japan, New Zealand, US
Imports: Foodstuffs, textiles, fuels, timber, capital goods from New Zealand, Fiji, US, Australia, Japan

BANKING, FINANCE AND INVESTMENT

FINANCIAL FACTS
The Cook Islands had made its way onto the OECD blacklist several years ago, and has since passed a slew of laws and regulations to improve international financial cooperation, financial reporting, money laundering detection and a host other activity. In 2005 the Cook Islands was taken off that list.

Fiscal year: 1 April - 31 March

BANKING
Banking privacy at every level - from bank employees to government authorities - is taken very seriously in the Cook Islands. Identifying details are often not required on trusts and incorporation registration documents, and access to private account information requires a mountain of paperwork as well as substantial proof of need.

Cook Islands banking law requires that offshore corporation names are approved, as words such as Assurance, Bank, Building Society, Chamber of Commerce, Chartered, Cooperative, Imperial, Insurance, Municipal and Royal cannot be used in the name of the company unless specifically approved before registration.

MEMBERSHIPS
ACP, ADB, FAO, ICAO, ICRM, IFAD, IFRCS, IOC, ITUC, OPCW, PIF, Sparteca, SPC, UNESCO, UPU, WHO, WMO

FOREIGN INVESTMENT
The Cook Islands Monetary Board is the controlling authority over all foreign investment. If a company has more than one-third foreign interest, it must establish its business through the Monetary Board.

Foreign investment incentives include import tax exemption, corporate tax relief, work permits, no customs duty and other incentives.

REAL ESTATE
Land leases must be approved by the proper Cook Islands government authority only if the interested party is foreign, and only if the intended lease is over 5 years in duration.

IMMIGRATION

IMMIGRATION FACTS
The Cook Islands is facing a severe shortage of skilled workers, mostly due to its low population and remote location.

VISAS
All trips over 31 days require a visa. Otherwise, a passport, a return ticket and proof of means are necessary.

EMPLOYMENT
All foreigners MUST have a work permit AND a residence permit for employment and housing. Recently, the application process was placed online for improved efficiency. Work permits are issued in one-year durations.

BUSINESS

BUSINESS ENTITIES
The type of incorporation that offshore businesses use the most is the International Business Company. An International Business Company allows for foreign-currency shares.

Shareholder information does not have to be registered with government authorities; it is not necessary to name any details of the annual shareholder or board meetings, nor is it necessary to hold them at all; there is no stamp duty on documents regarding the corporation.

A Cook Islands company that offers trust services must be named as secretary, although residents may not hold any interest.

For companies that want to perform local financial transactions, or for those who want their shareholders to be residents of the Cook Islands, A Domestic Limited Company may be the best choice. For tax purposes, this category of company is further broken down into resident and non-resident.

If your company is listed on an internationally recognized stock exchange, you may incorporate as a Registered Listed Company. Other foreign companies may register as a simple Foreign Company.

An International Limited Partnership requires all but one partner to NOT be residents of the Cook Islands. The one partner who must be a resident can be a trustee company.

TRUSTS
A Cook Islands International Trust can be established in perpetuity. The trustee must be licensed and a resident of the Cook Islands, but can work in tandem with a trusteeship in the settlor’s or beneficiary’s home country, or anywhere else in the world.

Recent rulings have made Cook Islands International Trusts more flexible, including regarding redomiciliation, trustee authority and purpose trusts.

TAXATION

PERSONAL TAXATION
The top rate of personal income taxes levied is 30 percent after the first NZ$6,000, with a sliding scale tax rate up to NZ$30,000 at which the 30 percent rate applies.

CORPORATE TAXATION
The VAT is 12.5 percent. There are no taxes levied on inheritance, capital transfers, capital gains or gifts.

OTHER TAXATION/DUTIES
The high amount of debt accrued by the government and the remote location of the Cook Islands means that import duties can be steep. However, in the last few years there has been an increasingly long list of items for which the import duty has been lifted. By later this year, the rate by which the remaining items are taxed will be half than normal.

DOUBLE TAXATION
The Cook Islands are not a part of any double tax treaties.