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The T & C islands are a self ruled,
English speaking enclave under the Protectorate of the
United Kingdom. Located just 575 miles southeast of
Miami, there is more than one attraction here for business
minded Americans.
T & C has one of the younger financial
industries in the Caribbean. Realizing this, along with
the huge economic potential, has made their legislation
pertaining to privacy and protection that much more
aggressive.
. . . They
have a common law duty to keep the details of a client's
affairs strictly confidential.
The Islands are presently ruled by a
Governor appointed by Britain with an Advisory Council
composed of four nominated members. There is also a
17 strong elected Legislative Council with Britain maintaining
responsibility for defense and foreign affairs. The
legal system is based upon the English common law with
local statutory modifications. Local legal services
are excellent and accountancy firms, trust companies
and company managers are becoming abundant.
There are not many banking institutions
on the islands yet, the primary banking currently being
done by Barclays and Scotia Bank. However, between the
appointment of a Superintendent of the Offshore Finance
Centre Unit (OFCU) and new legislation introduced in
1989 and 1990 to update company, insurance and banking
laws, more institutions are beginning to establish operations
there. This has been increasing the range and sophistication
of its offshore services.
Having put into place new trust and
other financial legislation, the OFCU feels that, "next
to the Cayman Islands we have the most sophisticated
regulatory regime in the Caribbean."
The islands are not obligated under
any tax treaties to exchange information with any other
jurisdictions. To the contrary, they have a common law
duty to keep the details of a client's affairs strictly
confidential. This is supported by the Confidential
Relations Ordinance which provides penalties of up to
US$10,000 and imprisonment of up to 3 years for an unauthorized
disclosure of confidential information with corporate
bodies in breach of the ordinance subject to penalties
of up to US$50,000.
The Companies Ordinance of 1981 allows
registered companies which generate their income off
the islands the flexibility of being `Exempt' from filing
annual returns or paying any tax other than the annual
exemption fee of US$300. |
`Exempt' companies receive a Governor's
undertaking against the imposition of future taxation
for a period of 20 years.
The Companies Ordinance set the stage
for establishing T & C as a haven that imposes no
income tax, corporation tax, capital gains tax, profit
tax, gift tax or death duties. It is also unlikely that
any of these taxes will be introduced in the near future,
for as with the longer established Caymans, the future
prosperity of the islands greatly depends upon the success
of the financial sector. This is a huge sector of the
economy, along with tourism and they will surely protect
it.
The islands have legislation which makes
them an attractive base for trusts also. Not only are
they tax free, but also are an exchange control free
jurisdiction. The Trusts Ordinance of 1990 is based
upon Jersey-type law although in many respects it goes
further and introduces a number of innovations.
The assistance comes by
way of establishing certain definitions of terms used
in relation to trusts, and thus legal recognition. For
example:
"DURATION"
- In a radical and sensible move, the legislation provides
no limitation on the duration of a trust nor upon its
accumulations.
"PROTECTORS"
- Protectors are now given recognition as being persons
whose consent the trustees must obtain before exercising
a power or discretion.
"PROTECTIVE
TRUSTS" - The terms of a trust may make
the interest of a beneficiary subject to termination
so that depending upon the terms there might be diminution
or termination of interest in the event of the beneficiary
becoming insolvent or any of his property becoming liable
to sequestration for the benefit of his creditors.
This is just a sampling
of some of the `friendly' legislation which is in place,
giving businesspeople good reason to establish themselves
here. Having excellent telecommunications and air connections,
thanks to the tourism industry, makes this a beautiful
and friendly venue for business and pleasure alike!
There are many other interesting
and important considerations which deserve attention
that we can't get into here due to space considerations.
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