If you’re in the market for a Cook Islands bank account, or you just want to know how financial institutions support clients from Rarotonga, you’re in the right place.
But before diving into the account opening particulars, let’s pull back the curtain on this tiny South Pacific nation so you can make an informed decision on whether the advantages of offshore accounts in Cook Islands are best for you.
Chances are, you already know the Cook Islands are renowned for asset protection and international trusts. And if you know anything about internationalization, you know the Cooks have some of the strongest trust laws in the world.
KEY TAKEAWAYS
- The Cook Islands is not a suitable banking option for just any foreign non-resident
- Opening accounts here can be challenging and time-consuming
- Banks here have struggled to keep corresponding banking relationships
- Non-residents will need to provide proof of ties to the jurisdiction
It’s no surprise that international media outlets have aimed to cast a sinister shadow over the islands.
The New York Times, Forbes and the ICIJ have all run features demonizing the protections offered to the wealthy through the asset protection laws introduced by the Cook Islands.
But mainstream media aren’t the only ones shining a spotlight…
The internet abounds with references to the Cook Islands being an “international financial center” or an “international banking hub.”
But, the Cook Islands aren’t really a financial center at all.
Instead, this country is a hub for asset protection.
In fact, while this article is about banking, it’s worth mentioning that the Cook Islands offer solid international asset protection for many people…
But, banking is a completely different ball game.
According to the Ministry of Finance in the Cook Islands, the country’s banking sector has just over US $300 million in assets.
Compare that to Andorra (~$16 billion), Bermuda (~$21 billion), Cyprus (~$68 billion), or Jersey (~$180 billion), and you start to wonder who is actually banking in the Cook Islands.
You see, no matter how great a country’s asset protection laws are, it can still have an unattractive banking sector.
And, with all the de-risking that’s been taking place in recent years, small island nations are particularly vulnerable.
And that’s exactly what many people discover when they open an offshore account with a bank in Rarotonga and start banking in the Cook Islands…
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Should You Open an Offshore Bank Account in the Cook Islands?
- Reasons for Opening Accounts With Cook Islands Banks
- Opening a Cook Islands International Bank Account
- Warning: Before Opening a Cook Islands Bank Account
- Frequently Asked Cook Islands Banking Questions
- Do You Want Help Opening Bank Accounts?
Should You Open an Offshore Bank Account in the Cook Islands?
Opening a bank account in the Cook Islands is something that many people consider. However, those people are usually tied to the Cook Islands in one way or another. Let’s take a look…
Do You Have a Cook Islands Trust?
If you’ve set up a Cook Islands trust, you might realize that opening an international bank account isn’t going to be as easy as your lawyer promised.
But, you already paid for a trust, and set up some LLCs or IBCs to hold assets, and now you’re wondering how to open a bank account.
In most cases, after tapping out all other options, people start to look at options in the Cook Islands. After all, banks in the Cook Islands are familiar with Cook Island trusts, so it should be possible.
Do You Visit the Cook Islands Frequently?
On the other hand, the Cook Islands also play host to around 170,000 visitors each year. Direct flights to Rarotonga take only 4.5 hours from Auckland or 7.5 hours from Sydney.
So maybe (if you’re a frequent visitor), you might decide that it would be good to have a bank account in the Cooks Islands to support your tourism activities.
Everyone Else:
For everyone else, you’re probably not going to find many reasons for banking in the Cook Islands. And, speaking from experience, there are plenty of other banking options you should be considering instead.
But, if you’re struggling to open accounts and think the Cook Islands might be the only destination that’ll work for you, keep reading…
We’re going to dig into banking in the Cook Islands, the banks in Rarotonga, and some of the reasons why you should (and shouldn’t) open bank accounts here.
We’ll also dig into account opening for foreign companies and non-residents, as well as the process to start opening accounts.
Do You Want to Explore All Your Offshore Banking Options?
Reasons for Opening Accounts With Cook Islands Banks
Now, let’s look at some of the reasons that people might choose to bank here.
As we’ve already pointed out, the robust asset protection laws offered by the Cook Islands have long made the country popular among high-net-worth individuals looking for international trusts.
In many cases, these settlors (people who set up a trust) look at the most obvious place to open bank accounts for their new asset protection vehicles, the Cook Islands.
But there are a few other reasons why people and companies are attracted to the Cook Islands, especially when compared to other offshore banking jurisdictions.
Below, are a few reasons why someone might opt to open offshore accounts with banks in Rarotonga:
Why Open a Cook Islands Bank Account
- The official language of the Cook Islands is English
- The Cook Islands use the New Zealand dollar
- The legal system is based on British Common Law
- In 2020, the Cook Islands graduated to the OECD white-list
- You can open accounts remotely
- Minimum balance requirements are low compared to other banking hubs
- Opening an account should take less than two weeks
Opening a Cook Islands International Bank Account
Today, there are a handful of banks operating in the Cook Islands, including ANZ Banking Group (ANZ), Bank of South Pacific (BSP), Bank of the Cook Islands (BCI), and Capital Security Bank (CSB).
But, if you’re like most people looking to bank in Rarotonga, chances are you want an international (or offshore) bank account…
In that case, your options are limited.
While ANZ, BSP, and CSB all have international banking licenses, only one of them actually offers banking services to international clients, and that’s CSB.
In fact, since 2014, CSB has been the only bank in the Cook Islands to actually use it’s international banking license to offer asset management and custodian services to international clients.
[If you’re a GlobalBanks Insider and believe that this is the right choice for you, just submit a request form and we’ll share direct contact information with you.]
Some of the requirements for opening a bank account as a foreigner include a certified copy of the account holder’s passport, proof of address, and a detailed curriculum vitae, etc.
In other words, to open an account here, you’ll need to be ready to jump through the normal account opening processes that you will face in any other country.
Additionally, there are some challenges that you should be aware of…
Challenges of Opening a Cook Islands Bank Account
Banks in Rarotonga are still relatively unknown outside of the offshore industry and international trust experts. So, transferring money in and out of the country could raise a few eyebrows with your foreign bank.
And while the Cook Islands are on the OECD white list right now, the country has been on black lists and grey lists in the past. Depending on how things go in the future, there’s a risk that such appearances could be repeated.
There’s also a severe shortage of professional talent in the Cook Islands. And, the talent pool shrinks every year. With New Zealand passports, many qualified locals find more opportunities abroad than in the middle of the South Pacific.
This mass exodus of local professionals is expected to get worse in the future. Not surprisingly, that will put a strain on both the private and public sectors. So, when it comes to banking, you might find customer service lacking compared to what you’ll find elsewhere.
But more than anything, the biggest challenge facing Cook Islands bank accounts and banks in Rarotonga has nothing to do with the islands at all…
Warning: Before Opening a Cook Islands Bank Account
There have been instances within the last few years where Cook Islands banks have actually lost their ability to send and receive certain currencies, including US dollars.
This happens when their correspondent banking relationships (CBRs) are terminated. Causes for this include breaching the rules of that relationship or (more often than not) de-risking. De-risking is the result of pressure from foreign governments (e.g., the US or EU) where these CBRs are based.
When CBRs are terminated, banks can no longer send international transfers. You can’t access your money, and your cash is effectively frozen.
Basically, if you have any assets tied up in a Cook Islands bank that loses its correspondent banking relationship, you’ll have to wait until they find another correspondent bank to access your cash… and that can take months.
This is an increasingly important consideration for people opening international accounts in small banking jurisdictions.
Global regulatory bodies (e.g., FATF, OECD, EU) are all stepping up pressure on foreign jurisdictions known for asset protection and low (or no) tax… and their weapons of choice are adding countries to blacklists followed by cutting correspondent bank access.
As always, when opening bank accounts abroad, we encourage you to do your due diligence. That means making sure you’re choosing a bank that’s capable of protecting your money for the long haul. And that means making sure you can access your money no matter what happens.
Frequently Asked Cook Islands Banking Questions
Below are a few of the most common questions that we receive from people exploring how to open a Cook Islands bank account. If you have any further questions, don’t hesitate to get in touch with us directly.
How Do I Open a Bank Account in the Cook Islands?
How you open a bank account in the Cook Islands will depend on your client profile. While this is true elsewhere, it is especially important in the Cook Islands because foreign non-residents only have one choice. In terms of the account opening requirements, applicants will need to provide proof of identification, proof of address, proof of income, bank reference letters, and a qualifying deposit.
What Is the Best Bank in the Cook Islands?
The best bank in the Cook Islands will depend on the person applying for the account. This is because most banks in the Cook Islands do not accept foreign non-residents. With this in mind, it’s important to choose the bank that meets your requirements and banking needs and offers the services you’re after.
How Many Banks Are There in the Cook Islands?
There are four banks that operate in the Cook Islands. That said, there is only one international bank. The other three banks are domestic banks serving the local population and economy. With this in mind, the banks available to you will depend on your citizenship, residency, deposit level, banking needs, and much more.
Do You Want Help Opening Bank Accounts?
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