A Cook Islands company cannot technically own a trust, since a trust is a legal arrangement rather than a legal entity.
However, many investors ask this question, and the answer is nuanced: while a company cannot own a trust, it can play a crucial role by acting as the settlor, trustee, or protector in its creation and management.
In this guide, we’ll explain what a Cook Islands company is and how it can be used with trusts and foundations.
We’ll cover:
- What is a Cook Islands International Company and how does it work?
- How can a Cook Islands company be used in managing a trust?
- Can a Cook Islands company establish or control a foundation?
- What are the benefits of combining companies with trusts or foundations?
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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.
What is a Cook Islands Company?
A Cook Islands International Company (CIC) is a corporate entity established under the International Companies Act.
It is a popular vehicle for foreign investors due to its:
- Confidential ownership and management structures
- Strong asset protection features
- Ability to conduct international business free of local taxation
- Flexibility to hold investments, real estate, and financial assets globally
This company type is frequently paired with trusts and foundations to create layered asset protection strategies.
Can a Cook Islands Company Own a Trust?
No. A Cook Islands company cannot literally own a trust because a trust is not a legal entity that can be owned.
Instead, a trust is a legal arrangement where assets are held by a trustee for the benefit of beneficiaries.
However, a Cook Islands company can be:
- The Settlor: The company contributes assets into the trust.
- The Trustee: The company manages the trust and holds legal title to assets.
- The Protector: The company oversees the trustee’s actions to ensure the trust is properly managed.
In practice, many high-net-worth individuals and family offices use a Cook Islands company as the trustee of a Cook Islands International Trust for maximum privacy and asset protection.
Can a Cook Islands Company Own a Foundation?
Unlike a trust, a foundation is a legal entity and can technically be owned by its founder or controlled by a legal person such as a company.
A Cook Islands company can therefore act as:
- The Founder of a Foundation: Establishing the foundation and transferring assets into it.
- The Council Member or Board Controller: Managing and making decisions for the foundation.
This structure allows investors to combine the perpetual existence and legal personality of a foundation with the corporate flexibility of a Cook Islands company.
Why Combine a Cook Islands Company with a Trust or Foundation?
High-net-worth individuals and expats often combine these structures to achieve layered benefits:
- Asset Protection: The Cook Islands has some of the world’s strongest asset protection laws, shielding trusts and foundations from foreign judgments.
- Estate Planning: Families can ensure smooth succession across generations.
- Privacy: Company ownership records and trust arrangements are not publicly accessible.
- Tax Planning (depending on jurisdiction): While Cook Islands does not impose taxes on international structures, residents of other countries must consider reporting and tax obligations.
- Control with Flexibility: Using a Cook Islands company as trustee or founder allows greater control while maintaining legal separation of assets.
Legal Considerations for Using a Cook Islands Company with Trusts or Foundations
When structuring these entities, investors should be aware of:
- Compliance Requirements: Companies must adhere to Cook Islands incorporation and reporting rules.
- Cross-Border Taxation: US, UK, and EU residents may face FATCA, CRS, or other reporting obligations.
- Choice of Trustee or Foundation Council: Selecting a professional licensed agent in the Cook Islands ensures compliance with local laws.
- Jurisdictional Conflicts: Some countries may not recognize Cook Islands structures, requiring careful international planning.
Conclusion
Using a Cook Islands company alongside trusts and foundations is ultimately about building stronger, more resilient structures for wealth preservation.
Rather than focusing on ownership, the real benefit lies in the company’s ability to serve key roles within a trust or to establish and control a foundation.
This layered approach enhances asset protection, ensures continuity in estate planning, and provides expats and high-net-worth families with flexibility across multiple jurisdictions.
With careful structuring and professional guidance, these tools can be tailored to safeguard assets for both present needs and future generations.
FAQs
Can a Cook Islands trust own a company?
Yes. A Cook Islands trust can hold shares in a Cook Islands International Company or even foreign companies, making it a flexible vehicle for asset protection and succession planning.
What is the difference between a Cook Islands trust and a foundation?
A trust is a private arrangement without legal personality, while a foundation is a legal entity with independent status.
Trusts are better for flexible asset protection, while foundations are preferred for governance and philanthropic purposes.
Is a Cook Islands company subject to taxes?
No, a Cook Islands International Company is exempt from local taxes if it conducts business outside the Cook Islands.
However, tax reporting obligations may apply in the investor’s home country.
Why is Cook Islands popular for asset protection?
The jurisdiction is famous for strong trust laws, limited recognition of foreign judgments, and robust privacy protections.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
