The jurisdiction

The Turks and Caicos Islands (TCI) are situated to the south of The Bahamas and approximately 500 miles southeast of Miami Florida. TCI is a British Overseas Territory and free of corporate, inheritance and capital taxes and of personal income tax. TCI has demonstrated significant corporate and financial law stability over many decades and continues to do so. TCI law is based upon English common law, with a significant number of locally-enacted TCI-specific statutes, including several in the areas of corporate law and financial services. Similarly, the TCI court system is based upon English law and English civil and criminal procedure. The ultimate court of appeal from the TCI Supreme Court is the Privy Council in London.

Companies and similar entities

Company registrations in TCI occur under the TCI Companies Ordinance. A new Companies Ordinance has just been enacted and will be coming into full force at the end of September 2017, along with a wholly-new Insolvency Ordinance. Both are based substantially on the internationally-popular BVI model.
The preferred TCI corporate vehicle for conducting international business is the international company limited by shares. These companies are for doing business mainly outside TCI. TCI, in common with most reputable offshore jurisdictions, has abandoned ring-fencing: the Ordinance applies equally to domestic and international TCI companies, with the international entities free from certain stamp duties and other local levies.

Companies limited by guarantee, companies limited by guarantee but having a share capital, unlimited companies and protected cell companies are also permissible.
Incorporation of TCI companies is essentially straightforward and the issued share capital may be from one US dollar upwards.
TCI has recently enacted legislation to comply with its obligation to the UK to implement a register of beneficial ownership interests in respect of companies incorporated or domiciled in the TCI. The register will not be open to the public and will be accessible to regulatory authorities only under strict rules.

Partnerships

General partnerships have been recognised in TCI since 1799 when the common law of England was applied to and became part of the laws of TCI. Much of the English common law concerning general partnerships has been codified by the enactment of the TCI Partnership Ordinance (2011).
Limited partnerships are also permitted pursuant to the Limited Partnership Ordinance. TCI limited partnerships are similar to those in many other jurisdictions but retain the TCI no-tax benefits.

Trusts

TCI has long been an attractive domicile for trust establishment by high-net-worth individuals and their advisers for many years and a new trusts statute, The Trusts Ordinance 2016, came into force in late 2016. The new law significantly modernizes TCI’s trusts offering such that it is in every respect as modern and attractive as the law in competing jurisdictions.
In essence, the new statute extends settlors’ powers, allows trusts for purposes, allows for special trusts of company shares, limits the Saunders v Vautier rule and revises the trustees licensing regime.

Regulation

In terms of financial services, TCI has an extensive regulatory scheme which governs most aspects of the TCI financial industry including banks, insurance companies, brokers, agents, company administration managers, trust companies, investment dealers, mutual funds administrators and money transmitters.
Since 2007, the TCI Financial Services Commission (FSC) has been independent of the TCI government. The FSC was initially created pursuant to the TCI Financial Services Commission Ordinance and FSC functions incorporate the supervision and regulation of licensees under the financial services regulatory ordinances and the monitoring of financial services business.

TCI’s anti-money laundering regime is to international best practices. Anti-money laundering and anti-terrorist financing is a priority of both the TCI Government and the FSC and all local service providers are obliged to comply with the regulations and are subject to FSC compliance audits.
Consequently, any individual or corporation seeking to register a legal entity or obtain TCI licensing needs to comply with the relevant regulations. The TCI anti-money laundering regulations have continued to be upgraded in line with international and FATF standards.
The bulk of these regulations are set out in the TCI Proceeds of Crime Ordinance and its subsidiary regulations and guidelines.

Luxury tourism

Luxury tourism is a major plank of TCI’s economy. The TCI continue to experience heavy levels of foreign direct investment, primarily in five-star hotel, condominium resorts and managed luxury villa communities. These areas continue to grow and the increase in the managed villas in 2016 and 2017 has re-ignited low density upscale development in the Islands.