World-Leading International Financial Services

The Cook Islands’ financial services credentials are second to none and have been brought into sharp focus by the global Covid-19 pandemic. Overseen by the venerable Financial Services Development Authority (FSDA) with its new CEO, Marie Francis, the sector is evolving to make it even more fit for purpose than ever, thanks to a five year strategic plan, implementation of which is fully on track. The jurisdiction’s distinguishing characteristics are centred upon the key watchwords of experience, expertise and integrity. Moreover, the Cook Islands’ suite of products and services for its discerning international clientele are more in demand than ever and the sector continues to thrive, driving valuable revenue for the island nation at a time when its tourism industry is challenged due to restrictions on international travel.

“For its part, the Cook Islands IFC space has adapted and evolved to accommodate the requirement for higher levels of service and advice that Chinese clients expect, compared to those from many other markets.”

With the merits of the Cook Islands international financial services offer having been brought into sharp focus when looked at through a Covid-19 lens, coupled with wealth preservation being prioritised in the face of volatile markets and sharp contractions, not to mention the psychological allure of the Cook Islands having a clean bill of health, it is an opportune moment to remind prospects and incumbents about why considering the Cook Islands for their financial needs makes eminent sense. Those from China and Special Administrative Regions of Hong Kong and Macao looking for wealth management solutions are particularly well served, as, for that matter, is anyone who has prioritised wealth preservation, or has long-dated investment horizons.

Best of both worlds
Recent changes to the tax laws of the Cook Islands are designed to ensure that the jurisdiction avoids being listed as a non-cooperative tax jurisdiction and illustrate its commitment to meet all of its international obligations. Importantly, however, the transparency they speak to in no way diminishes the relevance, competitiveness, attractiveness, or effectiveness of what the Cook Islands offers for those wishing to do business there.

The aforementioned five year strategic plan is central to the evolution of the Cook Islands’ international financial services sector. At its heart is an understanding that the industry need not be constrained by the nation’s remoteness, for if anything, COVID-19  has taught us that economic development can transcend geography, through leveraging advances in technology and digital solutions. The Cook Islands has an inherent advantage over much of the rest of the world on this front, for it understands there is no requirement for its customers to set foot on its shores to avail themselves of its services. This is always how it has operated and its portfolio of products and services are already fundamentally informed by this notion. It is part of the reason why the Cook Islands financial sector has proved so enduringly resilient over recent decades to the ups and downs of the global economy and to ever-changing international political winds.

Evolution
With innovative new trust products on the horizon and other exciting wealth management developments around companies, foundations and licensed trustee companies to follow, there has never been a better time for interested parties to study the Cook Islands’ benevolent legislative and regulatory landscape.

With a fine pedigree stretching back over 30 years of providing wealth management to individuals and families, the Cook Islands offers’ legal frameworks are complemented by a growing body of skilled and experienced service providers that bring the finer detail to and facilitate the structuring and management of private wealth. This encompasses the full spectrum of straightforward standalone vehicles, to more comprehensive and complex wealth management plans, dependent upon the needs of the client in question.

The Cook Islands is in tune with the requirements of the wealth management market and its representatives, be they from civil or common law jurisdictions, or with connections to multiple countries and systems of law, in so doing, striking the right balance between a person’s right to privacy and confidentiality, with more exacting regulation and exchange of information.

This serves to evidence the concrete recognition now afforded the Cook Islands and the high esteem in which its anti-money laundering/combating the financing of terrorism (AML/CFT) regime is held. As well as this recognition not having come at the expense of confidentiality or privacy, neither has it been achieved through any watering down of product, such that the heart and soul of the Cook Islands’ asset holding and investment vehicles – namely its international trust and foundation – remain as fit for purpose as ever.

China-friendly
Meanwhile, macro socio-economic developments in China are accelerating the ongoing momentum towards full internationalisation of RMB, the One Belt One Road initiative gathers pace, and there is exponential growth in the levels of private wealth held by Chinese citizens. It all means the Cook Islands, with its Pacific proximity, is perfectly placed to assist Chinese nationals prioritise wealth preservation and seek an international wealth management plan to reflect the increasingly global nature of their personal and business holdings.

For its part, the Cook Islands IFC space has adapted and evolved to accommodate the requirement for higher levels of service and advice that Chinese clients expect, compared to those from many other markets.

As a jurisdiction, the Cook Islands is aware that China is, essentially, a civil law jurisdiction and therefore more pre-disposed towards foundations, such that its trust offering is marked by its flexibility and ability to be used for a variety of planning purposes. These include succession, wealth protection, avoidance of probate, tax and pre-migration, illustrating that the trust can be the cornerstone of a wealth management plan.

In truth, the Cook Islands provides the fiscal maturity and regulatory environment China currently lacks for the legal protection and secure investment of the wealth its HNWIs now increasingly hold.