Turks and Caicos Companies and Trusts 

General Introductory and Offshore Tax Information

Having identified the pivotal role that offshore companies play in international trade, commerce and investment, the Turks and Caicos Islands have positioned themselves as a premier market for offshore corporate and financial services. Turks and Caicos offshore companies and entities have served exceptionally as vehicles for reducing taxes, planning estate and tax, as well as holding, managing and protecting assets.

Turks and Caicos offshore companies and business entities offer a suite of other advantages including full exemption from many taxes. As such, Turks and Caicos offshore companies are exempt from tax on capital gain, income tax on corporate tax on profits, estate tax, gift tax, death tax and transfer tax. These tax exemptions are applicable to offshore companies as well as to shareholders. Turks and Caicos offshore banks, offshore trusts and offshore insurance companies are beneficiaries to the same exemptions but are all required to operate in accordance to the rules established by their respective governing laws and meet varying capital and licensing requirements.

Turks and Caicos Offshore Business Entities:

• Turks and Caicos Exempt Company
• Turks and Caicos Offshore insurance
• Turks and Caicos Offshore Trusts
• Turks and Caicos Banking

Turks and Caicos Exempt Company

Main features:

• Legislation for Turks and Caicos offshore companies- Companies Ordinance
• The Companies Ordinance is a comprehensive piece of legislation which defines and regulates all companies in the Turks and Caicos Islands
• Under the Ordinance, Exempt Companies is the generic term used to refer to offshore companies
• Three main types of offshore companies are incorporated in Turks and Caicos Islands, namely, Exempt Company Limited by Guarantee, Exempt Limited Liability Company (or Unlimited Liability), Exempt Limited Life Company
• Turks and Caicos offshore companies operate exclusively as non-resident companies, that is, companies operating only outside the jurisdiction of the Islands
• Offshore companies incorporated and registered in the Islands may be a company continued or redomiciled from another jurisdiction
• A Turks offshore company is able to have both limited and unlimited liability
• To be incorporated a Turks offshore company needs at least two (2) subscribers
• Offshore companies can be administered or setup with one director and one shareholder
• Offshore companies in the Islands are required to have a secretary
• Required to have registered office located within the Islands
• Not subject to filing of annual returns or details of shareholders, directors and officers
• Not subject to filing audits
• Cannot divide nominal capital into both shares of a fixed amount and of no par value
• Shares of a Turks and Caicos offshore company may be issued in bearer form and converted to registered shares afterward and vice versa
• Bearer share certificates are required to be maintained at the office of an agent, company manager, accountant, trustee of licensed bank or a company secretary

Turks and Caicos Exempt Limited Life Company

• Requires at least two (2) members
• Maximum life limit of fifty (50) years from date of incorporation
• May by special resolution life duration to a period or periods adding up to no more than 150 years from the date of formation

Turks and Caicos Exempt Company Limited by Guarantee

• Formed on basis of member being limited to a specified contribution to the company’s assets in the event of the company’s dissolution
• Required to have registered office located within the Islands
• May have a share capital
• May by ordinary resolution increase share capital by issuing new shares
• May by ordinary resolution choose to divide and consolidate all or any of the share capital

Turks and Caicos Exempt Company Limited by Shares

• Formed on the basis of liability of members being limited to the unpaid amount on their shares
• Subject to providing a declaration stating that the liability of members is limited
• Minimum of one share
• May not divide nominal capital into both shares of a fixed amount and shares of no par value
• May by ordinary resolution increase share capital by issuing new shares
• May by ordinary resolution choose to divide and consolidate all or any of the share capital
• Turks and Caicos offshore companies can end as follows: Limited Liability Company: — Limited Liability Company or Ltd.; Limited Life Company — Limited Life Company or LLC; Company Limited by Guarantee — Company Limited by Guarantee or Ltd.; Company Limited by Shares — Limited by Shares or Ltd.

Turks and Caicos Offshore Insurance

Main Features:

• Legislation - Insurance Ordinance 1998 (as amended)
• The Ordinance governs domestic and offshore insurance
• Six main offshore insurance licenses are issued under the Act: Insurer, agents, sub-agents, brokers principal representatives and managers
• Annual fees required to be paid on or before March 31 of every year of operation
• All insurers are subject to filing audited accounts on an annual basis, within 3 months of the end of the insurer’s financial year
• Required to notify the Permanent Secretary of Finance of any company name change
• General offshore insurance businesses are subject to preparing a statement of solvency required to be certified by an auditor
• Long term offshore insurance businesses are subject to preparing an actuarial valuation of assets and liabilities at least every three years. The report is required to be certified by an actuary

Insurer’s License

• Enables an insurer to do insurance business in or from within Turks and Caicos; that is, domestic or offshore insurance
• Subject to appointing at least one Turks and Caicos resident for processing legal proceedings within the Islands on the insurer’s behalf
• An insurer whose main office is based abroad may be licensed within the Islands provided that the company is under effective supervision of its own domestic supervisory authority.
• Insurers conducting both general and long term insurance are required to keep separate accounts with regard to its long term business.
• Receipts of long term insurance business are required to be maintained in a separate long term insurance business fund.
• External and locally based insurers are not required to appoint an insurance manager. All other classes of insurers, however, are required to do so.

Principal Insurance Representative License

• Must only do insurance and reinsurance business with insurers of good repute
• Must be licensed for each business activity undertaken if acting as an insurance agent

Insurance Manager’s License

• Granted only to insurance management companies or persons who are experienced experts as insurance managers
• Required to employ a at least one individual qualified as a member or associate of the Chartered Insurance Institute of London or the Society of Chartered Property and Casualty Underwriters
• Requires managers to report any suspicions regarding the solvency or integrity of insurers with whom they work

Insurance Agent’s License

• Granted to persons requesting insurance business locally on behalf of a single insurer
• An agency agreement is required between locally based agent and insurer

Sub-agent’s License

• Granted to sub-agents requesting insurance business locally on behalf of a broker or agent
• Must solicit and conduct insurance business for only one insurance broker

Insurance Broker License

• Granted to agents acting on behalf of multiple insurers

Turks and Caicos Offshore Trust

Main Features:

• Legislated under the Trusts Ordinance, 1998
• The Act governs both domestic and offshore trusts
• The Act allows the establishment of ordinary trusts, unit trusts, protective trusts and charitable trusts
• All Turks and Caicos trusts consist of a settlor, a trustee and a beneficiary
• Property held in a trust must be separate and able to be identified from that of the trustee
• A unit trust may only be established by a written instrument
• The records and accounts of a trustee must be accurate
• The settlor or trustee can be the or a beneficiary
• The rule against perpetuities is non-applicable
• The duration or date of termination of a trust can be provided for in a written instrument
• Turks and Caicos has jurisdiction over trusts which are Turks and Caicos trusts, the resident trustees of foreign trusts, locally situated trust property of a foreign trust, any foreign trust which administered in the Islands Offshore Charitable Trust
• Offshore trust established specifically for charitable purposes
• Can only come into existence by a written instrument Offshore Spendthrift or Protective Trust
• Offshore trust established specifically to protect against spendthrift tendencies Offshore Unit Trust
• Setup to provide persons with investment funds or facilities that would enable those persons to participate in those funds as.

Turks and Caicos Banking

• Main Features:
• Legislation — Banking Ordinance 1998
• Two main banking licenses are granted under the Ordinance for the conduct of domestic and offshore banking

National Banking License

• Issued for the purpose of conducting banking business in and from within the Islands with citizens and persons ordinarily or temporarily residing in the Islands

Oversea Banking Licence

• Issued for the purpose of carrying on banking business from within the Islands but not with citizens or persons ordinarily or temporarily residing in the Islands
• Issued under the provision that the bank is granted both an Oversea Banking Licence and a National Banking Licence if the Governor is satisfied that the business conducted is accounted for under the separate accounting arrangements.
• Business carried out under each licence is required to be carried out via separate subsidiaries or branches
• The applicable licenced fees must be paid on or before March 31 annually for holders of only oversea banking licenses as well as holders of both oversea and domestic licenses