Disclaimer: 

This General overview has been obtained from Government Sources so: Is not our responsibility if any part of Local Legislation or Rules has been changed by Authorities without advice us.-

This overview is only for information and if wish to obtain more, please, consult directly to each Local Authority and/or Experts.-

The Turks and Caicos Islands emergence as a major corporate domicile dates from the enactment of the Companies Ordinance 1981. The legislation was regarded as highly innovative and has been duplicated by other jurisdictions.

The Ordinance continues to be amended to meet the changing demands of the international business community.

Currently there are five types of companies which can be incorporated under the Ordinance, namely the Ordinary company, the Exempt company (also known as the International Business Company), the Foreign company, the Limited Life company, and the Hybrid company. All the companies can be limited by share or guarantee.

An existing overseas company may transfer its domicile to the Turks and Caicos Islands where the laws of the overseas country do not prohibit such a transfer. A Turks and Caicos company can transfer its domicile to an overseas country where the overseas country laws allow for such a transfer. Once a company is redomiciled to the Islands it is deemed to have been incorporated there under the 1981 Companies Ordinance.

The companies registry offers same day clearance of names, same day registration and extremely competitive registration rates. All names of companies require the prior approval of the Financial Services Commission to ensure that no name gives the impression of providing a public financial service without due licensing.

The law on ultra vires need not apply to Turks and Caicos Islands companies since there is no requirement under the Ordinance for a company to have an objects clause in its Memorandum. The legal consequence of this provision is that if no objects are specified then the company has power to carry on any business not prohibited by law.

There is no distinction between a private and public company under the law. However the shares of an exempted company cannot be offered to the public unless a prospectus is approved by the registrar of companies.

Ordinary companies are generally used by those wishing to purchase real estate or otherwise carry on business within the Turks and Caicos Islands (in contrast to Exempt companies which are used by those wishing to carry on business outside the Islands).

The company must include the word 'limited' in its name.

For public record purposes the Ordinary company must file an annual return with the names, addresses and occupations of shareholders, directors and corporate officers. An Ordinary company must also declare on an annual basis that there has been no change in its beneficial ownership.

An Ordinary company must conduct a shareholders general meeting at least once annually.

Fees on incorporation depend on the level of authorised capital:

For capital up to $50,000 the fee is $275;

For capital over $50,000 and up to $100,000 the fee is $450;

For capital over $100,000 and up to $750,000 the fee is $550;

For capital over $750,000 and up to $2m the fee is $1,050;

Capital over $2m is charged at $2,050.

The annual filing fee to accompany the annual return is $250; these fees can be paid in advance at a discounted rate.

The attraction of the Exempt Company lies in a combination of its tax exempt status and minimal disclosure and administrative requirements. In order to obtain tax exempt status the subscribers must at the time of incorporation lodge at the Companies Registry a signed declaration stating that the business of the company will be mainly carried on outside the Turks and Caicos Islands.

The subscribers are not required to inform the Registrar of the identity of the beneficial owners. An exempt company must nominate a representative resident in the Islands for the purpose of service of legal process.

By the end of 1998 there were over 13,000 International Business Companies registered in the Turks and Caicos Islands of which over 3000 had been incorporated in that year alone.

Bearer shares or shares of no par value are permitted;

A sole shareholder, director or subscriber: is permitted;

Resident or non-resident corporate directors, shareholders or secretary are permitted;

Only the registered office and articles of association are available on the public file; the only other reporting is an annual declaration of compliance with Exempt company conditions;

The company must keep its corporate seal at its registered office but need not maintain there any record of the shareholders, directors, secretary, mortgages or charges;

The company need not hold any annual meetings and such as are held need not be held in the Turks and Caicos Islands;

Subject to certain solvency requirements the company may purchase or redeem its own shares;

The company can use a foreign name and need not use or include the word limited in its name;

The company's capital may be registered in a foreign currency;

Accounts need not be filed or audited.

Fees on incorporation depend on the level of authorised capital:

For capital up to $5,000 the fee is $100;

For capital up to $50,000 the fee is $100 plus 1% of the excess of capital over $5,000;

For capital over $50,000 and up to $100,000 the fee is $550 plus 0.5% of the excess of capital over $50,000;

For capital over $100,000 and up to $1m the fee is $800 plus 0.1% of the excess of capital over $100,000;

Capital over $1m is charged at $1,700.

The annual filing fee to accompany the annual return is $300; these fees can be paid in advance at a discounted rate.

The Limited Life Company (LLC) was designed to combine the benefits of a partnership with the advantages of a corporate entity.

The legislation was drafted primarily to comply with the United States Internal Revenue Service criteria for treating the entity as a partnership for tax purposes meaning that profits and losses are treated as attributable to the shareholders rather than the company itself.

The demand for LLCs comes primarily from the United States where they are known as limited liability companies.

The LLC has the following characteristics

The memorandum of association of the company must limit the life of the company to a period of 50 years which may by a special resolution be extended to 150 years;

Automatic dissolution of the company will occur upon one of several events specified under the law; it is possible to override these provisions by providing otherwise in the articles of association;

The LLC may be managed by its members or by a designated manager (thus the corporate characteristic of centralised management is absent; instead management of the LLC more closely resembles management of the common law partnership;

The law expressly contemplates the cessation of membership upon the occurrence of prescribed events e.g. death, bankruptcy or transfer of ownership where the same is specified or prohibited in the Articles;

The Articles may be drafted so as to prohibit or restrict the transfer of any shares or interest in the company and may provide for the consequent cessation of membership;

The law allows for a variety of capital structures and for members to have different levels of liability on winding up.

The company must describe itself as a Limited Life Company.

The Hybrid company turns accepted concepts of company law on their head. It has 2 classes of members:

The shareholders who have voting control but no right to dividends or to share in any distribution of capital upon winding up;

The guarantor members who have no voting control but who have a right to dividends and to any distribution of capital on winding up.

The Hybrid has been described as a quasi trust with the shareholders (the controlling members) effectively constituting the trustees and the guarantor members (the participating members) effectively constituting the beneficiaries.

It may be particularly useful for persons from civil law jurisdictions where the concept of a trust is not legally recognised but the concept of a company is and who can therefore use a company to avail themselves of all the benefits of a trust. 

Furthermore, difficult questions affecting a trust such as the governing law can be avoided since most jurisdictions accept that the law governing an incorporated body is the place of its incorporation.

A company incorporated in a foreign jurisdiction that wishes to carry on business or hold land in the Turks and Caicos Islands must register as a foreign company with the Registrar of Companies within a month of undertaking such activities.

Its status will then be similar to that of the Ordinary Resident Company (see above). Registration costs and an annual fee are payable thereafter.

When filing its annual application for re-registration the foreign company must give details of a resident who can accept legal process on its behalf and must file information on the names, addresses and occupations of its shareholders, directors and officers

The annual filing fee to accompany the annual return is $250; these fees can be paid in advance at a discounted rate.

The law is contained in the Limited Partnerships Ordinance (1992). Every Limited Partnership must have at least one general and one or more limited partners. A Limited Partnership cannot have more than 100 partners. A general partner's liability is unlimited whereas the limited partners liability is limited to the amount of unpaid capital unless the partnership agreement specifies a different amount.

A general partner manages the firm; a limited partner who manages the firm will lose his exemption from limited liability. A general partner can be both a general partner and a limited partner at the same time. A partner may be an individual, a company or a partnership in itself .

At least one general partner must be resident or incorporated in the Islands or if the partner is a partnership then at least one of the partners of the partnership must be resident or incorporated in the Islands.

Every Limited Partnership must have the words Limited Partnership in its name and must have a registered office on the Islands for the service of process and delivery of notices.

To register as a Limited Partnership the general partner must pay the prescribed fee and file at the companies registry a statement specifying the name of the partnership, the general nature of its business, the address on the islands of its registered office, the duration of the partnership and the full name and address of each general partner.

A Limited Partnership must file an annual return and pay an annual fee.

A Limited Partnership doing business outside the Islands can apply to the Governor for tax exempt status which if granted will exempt it from paying any Island taxes for a period of 50 years. An Exempt Limited Partnership is not required to file details of its limited partners at the Companies Registry although a requirement to maintain proper details at the firm's registered office still applies.

An Exempt Limited Partnership must both file an annual declaration of compliance with the law and pay an annual fee.

The Trust Ordinance (1990) sets out the law relating to trusts. The Ordinance is not exhaustive and English principles of law apply unless overridden by the specific statutory provisions. The Ordinance was drafted with a view to making the Turks and Caicos Island a more attractive jurisdiction in which to settle a trust and to this end contains features from other jurisdictions and recommendations from eminent English counsel.

The Ordinance defines a professional trustee as someone who receives remuneration for his services as a trustee, sets out the general requirements for licensing professional trustees, the powers and duties of the Superintendent of Trustees, and has miscellaneous provisions regarding liability, confidentiality and the non application of the Recording of Deeds Ordinance, which improves privacy.

The Ordinance has been approved for the purposes of the Hague Convention.

Characteristics of the trusts regime in the Turks and Caicos Islands are as follows:

There is strict regulation of licensed professional trustees

There is no requirement to register trust deed or the beneficiaries;

There is no rule against perpetuities;

The trust deed may specify one proper law for interpretation of the terms of the trust deed and another to apply to the administration of the trust assets;

Foreign judgements are excluded;

The Voidable Dispositions Ordinance 1998 sharply circumscribes the circumstances in which a "disposition" can be set aside by a creditor;

Trustees have wide investment powers;

Re-domiciliation of a trust is permitted.

The Turks and Caicos Islands emergence as a major corporate domicile dates from the enactment of the Companies Ordinance 1981.The legislation is regarded as highly innovative and has been duplicated by other jurisdictions. The Ordinance continues to be amended to meet the changing demands of the international business community.

In common with many other offshore jurisdictions, the Turks and Caicos Islands are responding to pressure from the OECD by tightening up regulation. Specifically, the Turks and Caicos are responding to the recommendations of the November 2000 KPMG Independent Review of Financial Sectors in the Caribbean Overseas Territories.

Legislative changes to tighten the regulatory regime can be expected during 2001.

In recent years in line with international banking guidelines the Turks and Caicos Islands have adopted a policy of accepting only established banks or the treasury operations of listed corporations. In 1998 Belize Bank selected the Turks and Caicos Islands as the venue for its first venture outside Belize making Belize Bank only the 4th bank ever to be licensed in the Turks and Caicos Island for domestic purposes.

The recent introduction of mutual funds legislation is expected to attract further applications for banking licences.

National Banking Licence:

This licence is granted for banking activities to be carried out locally with islanders and other residents and will only be granted to the branches or subsidiaries of banks which have an established track record and which are subject to effective consolidated supervision by their home supervisory authority. Exceptionally a national banking licence may also be granted where the bank is predominantly locally owned.

Overseas Banking Licence: This licence is granted for banking activities which are to be carried on outside the Turks and Caicos Islands. The holder of such a licence cannot accept deposits from or lend to residents of the Islands. An application for such a licence will only be considered from:

The branches or subsidiaries of banks with an established track record and which are subject to effective consolidated supervision by the overseas banks home supervisory authority

Banks which although not subsidiaries are closely associated with an overseas bank and which by agreement will be included within the consolidated supervision exercised over the overseas bank by the overseas banks home supervisory authority

Wholly owned subsidiaries of major corporations where the objective of the subsidiary is to undertake in house treasury operations which are fully consolidated within the published financial statements of the parent company

All banking licences are subject to continual detailed review. Whilst there are no published guidelines as to the minimum capital, two of the main requirements are the submission of a detailed business plan and the written consent of the home supervisory banking authority. A national banking licensee holder must file monthly and quarterly statements.

An overseas banking licensee holder is required to file less detailed returns on a quarterly basis. All banks must submit annual audited accounts

In 1998 there were more than 20 licensed companies offering professional trustee services making trusts one of the most active areas of the Turks and Caicos Islands offshore centre. Most functions relating to the licensing, review and regulation of trusts are carried out by the Superintendent of Trustees based at the Financial Services Commission.

The Trustees (Licensing) Ordinance 1992 provides for the licensing and regulation of trust companies and other professional trustees. The Trustees (Licensing) Regulations 1992 set out the form of the application for obtaining a trustee licence, the categories of trust licences, the details required in an application for a trustee licence, reporting requirements and the rules governing the conduct of licensed trustees. Licensed trustees are required to submit financial returns, appoint auditors and maintain professional indemnity insurance.

The Trust Ordinance (1990) defines a professional trustee as someone who receives remuneration for his services as a trustee, sets out the general requirements for licensing professional trustees, the powers and duties of the Superintendent of Trustees, and miscellaneous provisions regarding liability, confidentiality and the non- application of the Recording of Deeds Ordinance.

Licenses can be restricted or unrestricted

A restricted Trustee Licence is issued on the basis of an undertaking by the trustee that it will act as a professional trustee only in respect of a named trust or trusts. An annual fee of $750 is payable for this licence. In 1998 there were 5 restricted trust licensees operating in the Islands. Restricted Trustee Licences are normally used in connection with family trusts.

An unrestricted Trustee Licence is issued without any restriction on which trust or trusts the trustee can act for. An annual fee of $3000 is payable to the Financial Services Commission. In 1998 there were 16 unrestricted trust licensees operating in the Islands. An important requirement in the licensing process is the submission of a Business plan together with full financial disclosure and business references on both the principals and managers of the proposed licensee .The minimum capital requirement is $250,000. Many professional firms consider a trustee licence to be an appropriate and cost effective alternative to a banking licence.

The Trustees Licensing Exemption Order 1992 exempts the following entities from...

A company which is the trustee of a single trust and the issued share capital of which company is entirely beneficially owned by one or more of the beneficiaries, the settlor or by a combination of the beneficiaries and settlor. Family trust companies sometimes fall under this category;

A company which is the trustee of a single trust and which has its registered office in an approved jurisdiction;

A company which acts as a bare trustee with no interest in or duty to the trust property except to convey it when directed by the beneficial owner.