| Cook Islands | Cayman Islands | Bahamas | |
| Asset Protection | 1 | 4 | 3 |
| Business Investment | 1 | 2 | 2 |
| Bureaucratic Requirements | 1 | 1 | 1 |
| Catastrophic Events | 2 | 4 | 4 |
| Corporation Laws | 1 | 1 | 1 |
| Exchange Controls/Flexibility | 1 | 1 | 1 |
| Financial Services | 1 | 1 | 1 |
| Infrastructure | 1 | 1 | 1 |
| Independent Jurisdiction | 1 | 5 | 4 |
| Language | 1 | 1 | 1 |
| Legal System | 1 | 1 | 1 |
| Location | 4 | 1 | 1 |
| Perception | 3 | 4 | 4 |
| Political Stability | 1 | 1 | 1 |
| Secrecy & Privacy | 1 | 2 | 1 |
| Standard of Living | 1 | 1 | 1 |
| Tax Structure | 2 | 1 | 2 |
| Telecommunications | 1 | 1 | 1 |
| Transport | 3 | 1 | 1 |
| Work Permit Regulations | 3 | 4 | 3 |
1: very good; 2: good; 3: normal; 4: poor; 5: very poor
Asset Protection: Cook Islands has a highly favorable statutory framework for asset protection trusts and remains on the cutting edge of all offshore tax havens. It has recently amended the Trust Act to further ease administration. Comparisons between statutes of the Bahamas/Cayman Island jurisdictions show that important statutory provisions are left out in these countries. For example, only in the Cook Islands does the law specifically say that the creator of the trust can also serve as protector, in addition to being a beneficiary. This does not in any way decrease the trust's effectiveness. The trust creator or grantor may also be given other negative powers as trust protector. This includes the power to discharge the trustee.
In the Bahamas/Cayman Islands the trust protector must be a third party.
In all three tax havens the burden of proof for fraudulent disposition is on the creditor. However, proving fraudulent conveyance is more difficult under Cook Island law because the creditor must show beyond reasonable doubt actual intent to defraud that particular creditor and the creator of the trust was rendered insolvent by the creation of the trust. Even if the creditor succeeds in showing both an intent to defraud and resultant insolvency, under Cook Island laws the trust is not void but it is liable to satisfy the creditor's claim.
Note: In proving insolvency, regard is paid to fair market value (FMV) of the trust creator's remaining property immediately following the creation of the trust. If FMV exceeded the value of the creditor's claim at that time, then fraudulent intent is deemed absent.
Period of statute: For the Cook Islands the period is two years but in many instances the creditor must commence action within one year. The Bahamas requires action to be commenced within two years of disposition. For the Cayman Islands there is a six-year limitation period from the date of disposition.
Enforcement of foreign judgments: The Cook Islands specifically provides for the non-recognition of a foreign judgment against a trust, its creator, trustee or protector. In the Cayman Islands foreign judgments are permitted by action at common law or in certain circumstances under statute.
The Cook Islands also have a favorable ruling against perpetuities; it can specify periods of up to 100 years. In the other jurisdictions common law applies, i.e., 21 years.
Business Investment: All three have favorable laws for easy setup of businesses. The Caymans however do not allow investment in areas already served by locally owned enterprises or government activity. The bank market is saturated in the Bahamas and the government will not issue bank licenses to individuals or small companies. Similarly the Cayman Islands will only issue bank charters to long established companies and banks with paid up capital of $500,000. The bank market remains available in the Cook Islands.
Bureaucratic Requirements: There is minimum bureaucratic red tape in all three havens.
Catastrophic Events: The probability of storms is more likely in the Cayman Islands and the Bahamas.
Corporation Laws: All three havens offer flexible, simplified incorporation procedures and reasonable incorporation fees. In the Bahamas international business corporations are particularly popular. They are formed within 24 hours, no minimum capital is required, tax exempt for 20 years, there is director/shareholder anonymity and minimum compliance work.
Exchange Controls/Flexibility: All have no exchange controls and there are no restrictions on the repatriation of capital or earnings. Companies are allowed to move to different countries when circumstances change with very little red tape.
Financial Services: All three have a full range of financial services with first rate banks. Lawyers, accountants, bankers and financiers are all highly qualified.
Infrastructure: All three have highly developed sophisticated business infrastructure.
Independent Jurisdiction: The Cayman Islands remains a British colony and the UK retains a right to legislate.
Language: English is the official language in all three countries.
Legal System: In all three countries the legal system is based on English common law which provides for confidentiality, privacy and protection of individual rights and also has protective corporate laws.
Location: The Cayman Islands and the Bahamas are easily reached from the US East Coast. Although the Cook Islands are in the southwest Pacific Ocean they are just 1.5 hours behind PST.
Perception: There has been attention by the media on both the Bahamas and Cayman Islands tax haven status causing a negative image.
Political Stability: All three feature a political stable government and no racial disharmony.
Secrecy & Privacy: All have strict confidentiality laws guaranteeing operational secrecy. In the Cook Islands penal sanctions are imposed on persons who disclose information derived from the inspection of records of an international corporation. The documents are only available for inspection by directors, members and debenture holders. In the Cayman Islands the US has entered an agreement in 1984 where upon the request of the US attorney general Cayman Islands will provide US authorities access to documentary information about offenses connected with drugs. In 1986 this agreement was extended by the mutual Legal Assistant Treaty between the US/Cayman and UK. The treaty says that either party can request information from the other in a criminal matter and the information will be furnished if the request is genuine and conforms to the parameters of the treaty.
Standard of Living: All three have high standards of living comparable to that in the US.
Tax Structure: All three have no direct taxation. There is no tax on income, capital gains, sales, real estate inheritance or gifts. None of them have any tax treaties; however, the Cook Islands may be indirectly affected by the tax treaty between New Zealand and the US. Citizens of the Cook Islands are also citizens of New Zealand. The U.S. - New Zealand income tax treaty excludes the Cook Islands. Also the Bahamas has a business licensing law which mandates a fee on business operations.
Telecommunications: There are excellent telephone and telex facilities in all three countries and all have a positive attitude towards US Americans.
Transport: There are excellent transport services between the US and Cayman Islands and the US/Bahamas. Cayman Islands is only 70 minutes from Miami, FL, while the Bahamas is only 30 minutes from Miami, FL.
Work permit Regulation: A work permit is necessary for foreigners to work in the Cayman Islands. It costs 4,000 Caymanian Dollars per year and it is renewable annually. Also you have to prove that no Caymanian is available for this position.
Infinity Capital Management
1050 E. Flamingo Rd. Suite E227
Las Vegas, Nevada 89119, USA
Email: info@infinitycapital.com
Phone: USA-702-228-3499
Fax: USA-702-383-5079