Tax Haven Turks and Caicos

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Tax haven Turks and Caicos is a leading international centre for business and financial services. As a tax haven, Turks and Caicos stands out a regulated offshore jurisdiction which serves as the domicile of many international financial institutions, trusts, mutual and hedge funds, investment companies, insurances and offshore companies. The success of the Turks and Caicos as a tax haven is largely attributed to the country’s stable government, economic growth and trained professionals in the legal and financial fields.

Country Overview

Tax haven Turks and Caicos are known for their beautiful beaches and serene tropical weather. The islands are located in the Caribbean basin, southeast of the Bahamas and Miami, with an estimated population of 30,000. The islands are divided into two groupings, with the group of Caicos Islands accounting for a larger number of the islands and the Turks, a fewer number. Some of these islands include Providenciales, Middle Caicos, Ambergris cay, East Cay, North Caicos, Parrot Cay and Pine Cay.

In 1799, tax haven Turks and Caicos were annexed by the British and were included into the group of Bahama Islands, but after time became a separate political entity, with the Bahamas gaining its independence in 1973, while the Turks and Caicos tax havens remained British Overseas Territories.

The economy of tax haven Turks and Caicos depend on mainly the tourism sector as the main income earner whilst the offshore financial sector contributes roughly 7% to the economy. Other economic activities on tax haven Turks and Caicos are manufacturing, agriculture, fishing and mariculture.

Turks and Caicos Fiscal Incentives and Advantages

Tax haven Turks and Caicos has many features that make it a very attractive offshore jurisdiction. An important advantage of the Turks and Caicos is the fact that the official currency used is the US Dollar, which facilitates business and makes investing and trade much easier for foreign nationals. As tax havens Turks and Caicos are often described as more economical than the Cayman Islands, a leading offshore jurisdiction, in terms of the costs for incorporating international business companies and the fess involved.

Some of the advantages of Turks and Caicos as tax havens are as follows:

  • 20 year tax exemption for offshore companies
  • Political stability
  • Friendly business environment
  • Proactive government
  • No direct tax
  • No capital gains tax
  • No withholding tax
  • No stamp duty or transfer tax
  • No exchange controls

Turks and Caicos Offshore Financial Services

The Turks and Caicos Islands a comprehensive list of trust and banking services that specially cater to the business and personal needs of its international clients. Tax haven Turks and Caicos has a total of 6 licensed entities offering banking services and 5 companies that dedicate themselves to carrying out both domestic and international financial services. As a tax haven Turks and Caicos does not impose any direct taxes. This also applies for banks which enjoy exemption from corporate tax as well, and thus are better able to place funds at competitive rates with lower margins.

In tax haven Turks and Caicos the insurance sector is equally important and an area of steady expansion. A niche market was created for ‘credit life’ or ‘producer owned reinsurance companies’ (name used for captive insurance companies in the Turks and Caicos). This form of cost-effective reinsurance company is governed by the relevant insurance legislation which allows for the licensing of insurance companies and their usage by direct writers which are regulated by the US regulatory authorities.

Offshore activities carried out in tax haven Turks and Caicos include:

  • Trust services and formation
  • Insurance business establishement, similar to Seychelles company formation, and services
  • International Business Company (IBC) registration
  • Banking
  • Asset management
  • Company management

Turks and Caicos Offshore Legislative Framework

The TCI Companies Ordinance provides for the formation of Exempted Companies (International Business Companies). The formation of these companies has been mainly for use as vehicles for establishing reinsurance companies and for real estate transactions. In March 2002 the Turks and Caicos Islands committed to the OECD Harmful Tax competition initiative with the proviso that there exists a level playing field. To this end the Turks and Caicos continues with its colleagues in the region to engage in dialogue with the OECD on issues pertaining to achieving a level playing field.

The existing offshore legislation in tax haven Turks and Caicos include:

  • Trustees Act
  • Companies Ordinance
  • Confidential Relationships Ordinance of 1979
  • Insurance Ordinance
  • Trusts Ordinance
  • Investment Dealers Licensing Fees
  • Proceed of Crime Ordinance
  • Anti-Money Laundering Regulations
  • Banking Ordinance

The Financial Services Commission (FSC)

The Financial Services Commission is the regulating and supervising body for financial services in Turks and Caicos as a tax haven. The incorporation of international companies, registration of trademarks, patents and partnerships in Turks and Caicos are carried out by the FSC in a cost-effective and centralized manner.

New Developments

In the recent G20 summit, Prime Minister called for reform in several of the UKs dependencies including the Turks and Caicos. Like other Crown Dependencies, tax haven Turks and Caicos was placed on the OECD’s ‘grey list’ of jurisdictions that had expressed their commitment to work along with the relevant government agencies in the fight against tax evasion and illicit financial activities.

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