Cook Islands: Country and Foreign Investment
Business licenses are required to operate domestically, but not by offshore companies. Certain domestic activities are reserved to Cook Islanders.
Unless the entity falls within one of the stated exceptions the general rule is that all foreign companies or organizations that wish to set up a commercial operation on the Islands must first obtain approval from the Government and register their planned activities. A foreign enterprise is a business of which more than one third of the equity is owned by foreigners.
The investment code strongly encouraged joint venture participation with Cook Islanders but this requirement will be waived where such participation is not a practical proposition.
Under the Leases Restrictions Act 1976 a foreigner may lease land for up to 5 years without obtaining special permission. A foreigner wishing to lease land for more than 5 years needs to obtain the approval of a Government committee set up under the Act. A foreigner cannot lease land for more than 60 years and is forbidden from owing a freehold. A foreigner is defined as anyone who is not a permanent resident or a citizen of the Cook Islands.
Confidentiality is tight in the Cook Islands. The offshore registries are not open to a search by the general public and may be searched only by persons showing to the registrar a good and cogent reason for doing so. Fraud constitutes one such reason. Although under the International Trusts Act 1984 an International Trust must be registered annually for the first 5 years after its creation the registration requirements do not include disclosure to the registry of the names or details of the beneficiaries or settlor or the provision of a copy of the trust deed setting out the terms under which property was settled. Likewise under the International Companies Act 1981 a company is not required to file details of the beneficial owners either at the date of incorporation or in any subsequent annual returns.
Government officials and the employees of banks, insurance companies, trust & corporate entities are compelled to observe secrecy and failure to do so leading to an unauthorized disclosure will result in penal sanctions. There are some exceptions where criminal activity is involved, but this does not include fiscal crime.