Cook Islands Trusts – Asset Protection
The Cook Islands, with their main island of Rarotonga, is another offshore location that has not been so much the focus of public attention, such as the Cayman Islands or the British Virgin Islands.
The population of the island state, which was only recognized by Germany as an independent state in 2001, is just under 20,000 inhabitants. However, the citizens of the Cook Islands do not have their own citizenship; rather, citizens are citizens of New Zealand. English is the official language next to Rarotongan.
The Cook Islands as an offshore location
Remarkably, with regard to the Cook Islands as an offshore location, it is first of all that the financial and tax legislation in the early 1980s (keyword: “International Companies Act 1981-1982”) was decisively co-developed by US business lawyers. Accordingly, the Cook Islands have become an interesting offshore financial center.
But what exactly is the incentive for offshore activities in the Cook Islands?
The focus of most well-known offshore locations is usually on tax optimization, tax reduction or even avoiding all taxation. The Cook Islands, however, have not focused primarily on setting such an incentive. The focus of the Cook Islands is on asset protection (keyword “asset protection”). The establishment of Offshore Asset Protection Trusts in the Cook Islands provides a very high level of asset protection against access by creditors, lenders or claimants.
In general, the Cook Islands do not recognize foreign judgments and titles. This means in practice that any creditors actually have to travel to the Cook Islands on-site and have their lawsuit pending and enforced there.
Especially for wealthy Americans, who are always living in fear of sprawling lawsuits and claims for damages in their homeland, the Trust of the Cook Islands (keyword: “Wealth Preservation Trust”) as a means to escape the access of their national judiciary.
Extended privacy protection
A public register of registrations does not exist for international companies and information about them is available only with the consent of the Company itself. The register also contains only the names and addresses of the managing directors. The information regarding the shareholders is exclusively available at the registered office of the company. Penalties and sanctions for violations of these privacy rules are extremely stringent.
The ability to protect assets through the creation of a Trust in the Cook Islands is extremely broad, according to the intention of the Cook Islands Government. If your specific situation or planning should go in this direction, it may well be better to look into the Wealth Preservation Trust and the Cook Islands.