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1.1.1. Main Forms of Doing Business

The Cook Islands provides several business forms for investors, of which the main forms include:

  • Company (Limited Liability Company or Public Limited Company);
  • International Business Company;
  • International Trusts;
  • Sole Proprietorship;
  • Partnership (General or Limited); and
  • Foreign Business (Subsidiary or Branch or Representative Office).


Companies can be formed as Limited Liability Companies (‘LLC’).

The key aspects of Limited Liability Company include:

  • Shareholders’ liability is limited to their contribution in the company;
  • Minimum 1 shareholder and 1 director, of any nationality, are required;
  • Shareholders and directors can be individuals or companies;
  • Permitted to form a single member LLC;
  • Mandatory to appoint a registered local agent;
  • Permitted to re-domicile to another jurisdiction; and
  • Mandatory to suffix ‘Limited Liability Company’ or ‘LLC’ in the company name.

International Business Company ('IBC')

An IBC is a company (other than a domestic company) incorporated, registered and regulated under the International Companies Act, 1981-82. An IBC can be wholly owned by a foreign company, but may not be held beneficially by a natural person who is a citizen or a resident of or domiciled in the Cook Islands; or by any company incorporated or registered under the Companies Act 1970-71. An IBC need not obtain an operating business license under the Development Investment Act, unless it conducts a banking or insurance business or acts as a trustee company, in which case a license is required.

The key aspects of International Business Company include:

  • No minimum capital requirement;
  • Minimum 1 shareholder and 1 director, of any nationality, are required;
  • Shareholders and directors can be individual or companies;
  • Mandatory to appoint a resident company secretary;
  • Foreign companies can re-domicile as IBC in the Cook Islands; and
  • Shares can be issued in foreign currency.

IBCs were classified as a harmful tax regime by the EU Code of Conduct Group based on their corporate tax exemption, ring-fencing and the absence of any economic substance tests. This has led the Cook Islands to modify the regime with the adoption on 17 December 2020 of the International Companies (Removal of Tax Exemption) Amendment Act 2019. The Act inter alia removed the corporate exemption for IBCs effective 17 December 2019, and IBCs are henceforth subject to the standard corporate tax rate. Pursuant to a grandfathering rule, however, pre-existing IBCs continue to qualify for the corporate tax exemption until 31 December 2021 (see Sec. 8.1.1.). Following the change, the EU Code of Conduct Group reassessed the IBC regime as compliant.

Further, the Cook Islands Ministry of Finance and Economic Management issued a media release which provides guidance on the new tax obligations for the IBCs.

International Trusts

Trusts established in the Cook Islands, also known as International Trusts, are governed by the provisions of the International Trusts Act, 1984. All International Trusts are required to have non-resident beneficiaries and a resident licensed trustee. Under the Trust Law, trustees can delegate all trust fund investment related decisions to an investment company.

The key aspects of International Trust include:

  • Minimum 1 resident licensed trustee is required; and
  • Trusts are permitted to be re-domiciled outside the Cook Islands and vice-versa.

Sole Proprietorship

It is formed by an individual and trades in his/ her own. A sole proprietor is personally responsible for all taxes and debts of the firm. A sole proprietor is not considered separate from its owner.


A partnership is where two or more people join together to run a common business. It can be formed as a general partnership or limited partnership. A Limited partnership can be an International Partnership.

General partners have unlimited liability, whereas the limited partners’ liability is limited to their capital contribution in the firm. Under limited partnership, one of the partners is a general partner and others are limited partners. All general partners are jointly and severally liable for all the obligations of the firm.

Under international partnership, partners can be a foreign company or an IBC or a trustee and every partner is a non-resident.

Foreign Business (Subsidiary, Branch, Representative Office)

Foreign companies can conduct their operations in the Cook Islands through the constitution of a subsidiary, partnership firm, trust, branch office, or a representative office.

A Subsidiary can be formed as an LLC or an IBC.

Generally, branch and representative office are not considered as separate legal entities in the Cook Islands. A representative office cannot engage in commercial or business activity, whereas a branch, being able to carry out all or part of a legal entity’s functions, may engage in business or commercial activity.

Further information on the general investment, tax, and regulatory regime about the country is available at the following external references: