If you’re looking to set up a Cook Island trust, chances are you’re looking to create a legal separation of ownership between you and certain assets. Well, there are a few important factors that you should consider, not the least of which are your banking options.
Cook Islands trusts often struggle to find and open bank accounts. Or, they are required to make large initial deposits to be approved.
This is a similar situation faced by other privacy and asset-protection-oriented structures, such as offshore holding companies, trusts, and foundations. All of these entities struggle to establish banking relationships and can have limited foreign options in terms of cross-border financial services.
In this article, we will explore the banking challenges you’ll likely face when setting up a trust in the Cook Islands. We will also outline how these challenges can be overcome.
Feel free to use the table of contents to jump ahead to any sections that are immediately relevant to your search.
Table of Contents
- Cook Island Trust 101
- Does a Cook Islands Trust Offer Asset Protection?
- Is a Cooks Islands Trust Right For You?
- Frequently Asked Questions
- Ready to Explore Your Options
Cook Island Trust 101
If you’re considering a Cook Island trust, there’s a good chance that you are looking for asset protection or long-term estate planning. In both instances, the Cook Islands could be an option worth considering.
That said, it’s important to consider all of the other available options as well. With this in mind, here are a few other offshore trust jurisdictions you might want to consider.
- Jersey
- Guernsey
- Isle of Man
- Cayman Islands
- Switzerland
- British Virgin Islands
- Barbados
- Bermuda
- Cyprus
- Nevis
Of course, there are many other offshore trust jurisdictions for you to consider. Importantly, before deciding where to set up your trust, you should speak with a qualified advisor to ensure that the jurisdiction and trust you set up will help you achieve your objectives, this is true whether you’re registering in the Cayman Islands or the Cook Islands.
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Who Can Set Up a Cook Islands Trust?
As long as you are not a resident of the Cook Islands, you should be eligible to set up a trust here. That said, there are a few other requirements as well, including:
- One of the trusts’ trustees must be an international company or a licensed trustee from the Cook Islands.
- The trusts’ beneficiaries cannot be residents of the Cook Islands at any time.
Of course, the standard requirements such as not having a criminal record or being listed on any sanctions lists apply.
But, other than those specific requirements, most people can set up a trust here.
Why Set Up a Cook Islands Trust?
There are a number of reasons why you might want to set up a trust here. But, when compared to other trust options, most people who consider the Cook Islands are looking for one thing, in particular, asset protection.
With this in mind, the Cook Islands is a popular jurisdiction for individuals involved in highly litigious professions (e.g. doctors, dentists, etc.), seeking prenuptial security, or looking for a secure estate planning option.
Does a Cook Islands Trust Offer Asset Protection?
Yes, a trust in the Cook Islands is one of the most popular asset protection vehicles. In fact, the reason for its popularity is that the Cook Islands disregards foreign claims and court orders. This makes it extremely challenging for foreign creditors to bring a claim against the trust and the assets that it holds.
Is a Cook Islands Trust Right For You?
Whether or not the Cook Islands is the best jurisdiction for you is going to depend on a wide range of factors, not the least of which include your objectives.
With this in mind, before you decide where you want to structure your trust, you should seek qualified advice from someone who understands your personal objectives, your tax residency, nationality, and any other factors that could impact your selection.
Additionally, where possible, it’s best to seek advice from someone who can advise across multiple jurisdictions. Otherwise, you might end up dealing with someone who can only assist you with a trust in one country. This means they won’t be motivated to help you find alternatives that could be better suited to your needs.
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking to open a trust here. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Is It Safe to Have a Trust in Cook Island?
Having a trust in the Cook Islands is considered safe from an asset protection perspective. Likewise, the domestic regulatory environment and related sectors have decades of experience supporting trusts and protecting assets from foreign creditors. With this in mind, if you are looking for a jurisdiction to set up an offshore trust, the Cook Islands could be worth considering.
Is the Cook Islands a Tax Haven?
The Cook Islands is considered a tax haven. However, both resident individuals and resident companies are liable for income tax, at a rate of 20% and 28% respectively. With this in mind, while this jurisdiction does offer attractive advantages to foreign non-residents, including structuring options and a nationwide Exclusive Economic Zone, it does not offer the same level of tax efficiency as other tax havens, such as the Cayman Islands.
How Long Does It Take To Set up a Cook Islands Trust?
The process to set up a trust here will largely depend on how long it takes you to obtain and deliver the necessary due diligence documents. After the necessary due diligence documents arrive in the Cook Islands, the official registration and processing of the trust can be completed within three business days.
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