Home » The Cook Islands. Information on Residency for tax purposes

The Cook Islands. Information on Residency for tax purposes

The Cook Islands are a group of 15 islands located in the central part of the Pacific Ocean, northeast of New Zealand, between French Polynesia and American Samoa. This self-governing island country has a high-income economy, a GDP per capita of $21,884, and a population of about 16,994 people. Since the Cook Islands have limited natural resources, they regularly receive financial support from New Zealand. Due to the geographical location of the Cook Islands, the economy is based on tourism, agricultural production, and the financial sector. The jurisdiction is also popular among those interested in forming an offshore company there. 

Ease of Doing Business in the Cook Islands

The Cook Islands are known for their highly innovative services and ability to adapt quickly to the changes of the global marketplace. Due to recent changes in the global banking industry, the Cook Islands have been rated extremely high for regulating the financial sector. In 2003, the Cook Islands’ economy bloomed thanks to taxes, which have doubled the budget in the last five years. In turn, the offshore sector in the Cook Islands began its development early, in 1981-1982. Today, it is the most profitable branch of the economy, after tourism.

What advantages do entrepreneurs get when starting a company in the Cook Islands? First of all, the legislation provides a high level of confidentiality and there are no requirements for share capital. Secondly, the Cook Islands can be considered as a tax-free jurisdiction and, moreover, the company registration, as well as its annual maintenance, is relatively cheap. Finally, shareholders and managers can avoid the need to hold an annual shareholders’ meeting.

Business Taxes in the Cook Islands

There are about 16,000 offshore companies registered in the Cook Islands today, and this sector is rapidly growing. It is clear why it is so: international business companies will be exempt from income taxes if it is generated from doing business in other countries. Moreover, the dividend tax rate is 0%, and there is no capital gains tax as well as VAT tax.

In addition, the Cook Islands have Tax Treaties concerning information on tax matters with the Netherlands, Ireland, France, New Zealand, Sweden, Mexico, Germany, Canada, etc. However, there are no Double Tax Treaties.

There are tax payments, also known as the total number of taxes, paid by businesses (plus electronic filing). This tax is counted as paid once a year even if payments are more often. However, there was no research performed in the Cook Islands in 2019, so the World Bank research has no results for that year.

Income tax

An income tax is a tax imposed on individuals or business entities (taxpayers) in respect of their income or profits earned. Income tax rates may vary by the types or characteristics of the taxpayer and the type of income.

As for the Personal Income Tax Rate in the Cook Islands, it is no more than 30%.

Corporate tax

A corporate tax (also called corporation tax or company tax) is a direct tax imposed on the profits of a corporation. The corporate income tax (CIT) rate in the Cook Islands is 30% (the highest rate) and 20% (the lowest rate).