Geography, Population, Languages
The Turks and Caicos Islands (“TCI”) are a group of 30 islands in the North Atlantic, 575 miles south-east of Miami, with the Bahamas some 30 miles to the north-west. The total land area is about 430 sq. km. There are 6 inhabited islands (Grand Turk, South Caicos, Middle Caicos, North Caicos, Providenciales and Salt Cay. The estimated population of the TCI is about 32,000. The population is mainly of African descent. The capital is Grand Turk. The population speaks English and the official language is also English.
History, Political Structure and Law
It is believed that the islands were first discovered by Columbus on his first voyage in 1492. Officially it is claimed that the islands were visited by Spanish seamen in 1512, at a time when they were occupied by Arawak Indians. However, they remained practically uninhabited until British settlers from Bermuda founded the salt panning plants there in 1678. The British secured the islands in 1766 against Spanish and French claims.
From 1874-1962 the islands were a dependency of Jamaica. In 1962 Jamaica withdrew from the Federation of West Indies and the islands, which were then annexed by the Bahamas. In 1973 they became a self-governing British Crown Protectorate, and Britain maintains responsibility for defence and foreign affairs. The islands are ruled by a Governor appointed by Britain with an Advisory Council of 4 nominated members.
The Government consists of a Lower and Upper House. The Lower House is the Legislative Council with 17 seats. The Upper House (the Executive Council) consists of a Chief Minister, 4 members appointed by the Governor and 3 ex-officio members, including the Governor.
The legal system is based on English Common Law with local statutory modifications. Local legal services are excellent.
Economy and Infrastructure
The Turks and Caicos Islands are a stable financial zone for offshore business, with company, insurance and banking systems that have developed rapidly since 1989-1990. The infrastructure is very highly developed. There is a state-of-the-art telecommunications system, including fax, telex and direct-dial telephone communications, as well as international courier services. There are frequent flights to neighbouring islands and the US.
The economy of the TCI is based on fishing and farming, which includes corn, beans, cassava and citrus. Tourism has also become an important source of foreign exchange.
The currency used on the TCI is the US Dollar. There are no currency exchange controls for non-residents.
The TCI’s principal corporate legislation is the Companies Ordinance, 1981. This legislation was closely modelled on Cayman Islands legislation and is very flexible. Two types of Companies may be incorporated: the Resident Company and the Exempt Company. Most foreign investors opt for Exempt Companies, which are free of taxes because the main business of such companies is conducted outside the islands. The Companies Ordinance provides for minimum disclosure in the case of an exempted company. An exempt TCI company receives a certificate that guarantees that the company will be exempt from all taxation for a period of 20 years from its date of incorporation.
Trading and business activities are subject to the following restrictions:
- An Exempt Company cannot trade within the TCI, and has no right to own real estate there.
- An Exempt Company cannot engage in the business of banking, insurance, assurance, re-insurance, fund management, collective investment schemes, offering investment advice, or any other activity that may suggest an association with the banking and insurance industries.
- The Company may not solicit funds from the public or offer its shares for sale to the public.
A company’s incorporation documents contain its name, information on its authorised share capital, the registered office address, the purpose and types of activity and an indication of whether it is a Resident or an Exempt Company. Additionally, a foreign language translation of the Memorandum and Articles of Association may be officially registered alongside the English version. Thus, for example, the Certificate of Incorporation could bear both an English name and a translation of that name in Chinese characters, and a Chinese character version of the Memorandum and Articles of Association could also be registered.
As a matter of local company law the company must maintain a registered office address within the TCI and must also appoint a TCI resident as registered agent. Both the Companies Ordinance and the Confidential Relationships Ordinance of 1979 make it an offence punishable by a maximum fine of US$50,000 and/or a prison sentence of up to 3 years for anybody to reveal confidential information about a TCI exempt company or to threaten to reveal such information, including details of the owners and directors. A company incorporated in the TCI has all the powers of a natural person. The language of legislation is English. Corporate documents can be in any language with the attached translation into English or may be accompanied by a foreign language translation which may also be filed at the Registry. Off-the-shelf companies are available.
Company names are subject to the following requirements:
- The name may be represented in any foreign language or characters.
- A company name must not contain the following words or their derivatives, either in English or any other language, without the written consent of the Financial Secretary: Assurance, Bank, Building Society, Commonwealth, Co-operative Society, Fidelity, Friendly Society, Guarantee, Indemnity, Insurance, Re-insurance, Trust, Trustee, Underwriter, Royal, Imperial, Empire, Municipal, Chartered.
- The name of an exempt company need NOT indicate that it is a limited company.
A minimum of one director is required and corporate directors are permitted. An exempted company need only have one shareholder, and shares can be issued in bearer or registered form. Meetings need not take place on the islands, the objects may be unrestricted and details of shareholders and directors need not appear on public record.
It is normal to incorporate an exempt company with an authorised share capital of US$5,000 divided into 5,000 common voting shares of US$1 each, which is the maximum capital to qualify for the minimum duty, which is payable at the time of incorporation. If the authorised share capital is more than US$5,000, capital duty is increased by 1 per cent of any amount over US$50,000; by 0.5 per cent of any amount over US$50,000, and by 0.1 per cent of any amount exceeding US$100,000. The minimum issued capital is one share with no par value or one share with par value. The classes of shares permitted are as follows: registered, bearer and preference shares, shares with/without par value or with/without voting rights.
Under the Turks and Caicos Island Companies (Amendment) Ordinance 2001, if bearer shares are issued they must be held by the company manager or the registered agent licensed according to Company management (Licensing) Ordinance 1999.
Annual Taxation and Fees
There are no direct taxes such as income tax, corporation tax, capital gains tax, profit tax, gift or inheritance tax. An Exempt TCI company is exempt from all taxation for a period of 20 years from its date of incorporation, both on its own operations and on the Company’s shares.
The annual fee of US$300 must be paid in January.
There is no requirement to file accounts or a detailed annual return. Each company must file a short statement indicating that it has traded mainly outside the islands and that the company has complied with various statutory requirements.