Time to take a look at a British Overseas Territory: Turks and Caicos Islands (often just Turks and Caicos, or shortened TCI), a group of eight large and several smaller islands south of The Bahamas.

Turks and Caicos have quite an interesting history which sheds light on the history of The Bahamas and Bermuda as well, and is worth reading more in-depth about. “Turks Islands Landfall” and “A History of the Turks & Caicos Islands” are two very good book on the subject. Below will just be a quick summary.

History

As with much of the Caribbean, there isn’t a lot of known history prior to European arrival. Some evidence, in the form of pottery and utensils, suggests that Turks and Caicos were first inhabited in the first couple of centuries AD by settlers (Taínos) from South America exploring the Caribbean.

There is some dispute over who discovered the Turks and Caicos. While it is recorded that Spanish conquistador Juan Ponce de León sighted the island in 1512, some historians claim Christopher Columbus did so in 1492.

With the arrival of the Europeans, the Taíno people quickly perished to diseases brought by the new settlers. The islands changed hands between the Spanish, the French, and the British. Since the islands lacked good anchoring and it didn’t get enough rain to yield any worthwhile sugar harvests, they were mostly left unattended.

Bermudans arrived in the islands in 1678, setting up salt-raking operations and tree logging. The salt was sold to fisheries on both sides of the Atlantic Ocean. This initiated a period of growth in the islands and made many salt merchants very wealthy, which over time of course attracted pirates from The Bahamas to the poorly defended islands.

By 1753, the piracy had become bad enough that it prompted an offensive by the French, who claimed the islands as their own after driving out the pirates. The British drove out the French the following year and it remained British except for a brief French occupation between 1778 to 1783.

In the aftermath of the American war of independence, cotton planters set sail for Turks and Caicos. The cotton plantations were initially successful but in the long-term did not yield satisfactory harvests and by 1820, the planters had left, leaving most of their slaves behind. The former slaves eventually joined the salt-raking industry instead.

While under British rule since 1783, the precise nature thereof varied over the centuries. Turks and Caicos joined The Bahamas in 1799 but a petition in 1848 saw the islands gain self-governance under supervision of Jamaica. In 1872, the Turks and Caicos became a part of Jamaica. This lasted for 90 years, until 1962 when Turks and Caicos again became a part of The Bahamas.

However, in 1973, Turks and Caicos Islands became a separate crown colony of Great Britain (since 2002 called British Overseas Territory).

There have been several attempts in both Canada and Turks and Caicos for TCI to join Canada, though none successful so far. A poll in the late 1980s showed 90% support among TCI voters to join Canada as a province or a special relationship. The support had decreased to 60% to 2003. Canadians make up the largest group of tourist nationalities to visit Turks and Caicos most years.

In 2008, the British parliament received multiple reports on corruption in the Turks and Caicos government. By March 2009, the British threatened to suspend self-governance and instate a governor. Later the same month, governance of Turks and Caicos was transferred to a new governor: Gordon Wetherell.

The sitting prime minister resigned in late March 2009.

As of May 2014, the Turks and Caicos have still not regained their self-governance. It is unlikely that it will before 2016. This is all done in accordance with TCI constitution and its relationship with Great Britain. The population of the islands are reportedly satisfied with the new governor and complaints from the deposed government have not found support outside of its own circles.

Aside from that however, Turks and Caicos Islands are today one of the most wealthy Caribbean jurisdictions. Its economy is based on tourism, financial services, and construction.

The corruption controversy and change to direct British rule has not changed the country’s status as an international financial services center.

Overview Data

[ws_table id=”55″] [google-map-v3 width=”100%” height=”250″ zoom=”8″ maptype=”roadmap” mapalign=”center” directionhint=”false” language=”default” poweredby=”false” maptypecontrol=”true” pancontrol=”true” zoomcontrol=”true” scalecontrol=”true” streetviewcontrol=”true” scrollwheelcontrol=”false” draggable=”true” tiltfourtyfive=”false” addmarkermashupbubble=”false” addmarkermashupbubble=”false” addmarkerlist=”21.459 N, 71.139 W{}1-default.png” bubbleautopan=”false” showbike=”false” showtraffic=”false” showpanoramio=”false”]

Turks and Caicos incorporation

Turks and Caicos first appeared as a tax haven in 1981 with the Companies Ordinance 1981. There are today five types of companies available in TCI:

Ordinary company
Exempt company (sometimes incorrectly referred to as IBC)
Limited Partnership
Foreign Ordinary
Foreign Exempt
Limited Life Company

There is no direct corporate tax, even for resident companies.

Annual fees to the government vary by share capital and start at a few hundred USD. The actual cost to an end-customer buying a TCI company through a registered trustee varies more than probably most other jurisdictions. You can find prices anywhere between 1,000 USD to 4,000 USD. A list of Company Managers and Agents can be found here: http://www.tcifsc.tc/departments/company-managers-investments/company-managers/company-managers-agents.

Ordinary Company

These are resident companies that can trade within TCI and own property.

Ordinary companies can be limited by shares or by guarantee, or be a Limited Partnership.

Exempt Company

Exempt companies may not trade within TCI or own property in TCI. Bearer shares were abolished in 2014.

While on a high level similar to IBC, exempt companies are different in that they must annually submit a proof of compliance of exemption status. This is usually something the registered agent facilitates at a nominal fee.

Similar to IBC, exempt companies need only one director and one shareholder. The company need not file any annual returns but should keep books. Names of directors and shareholders do not appear in public records.

Exempt companies are normally limited by shares but can be limited by guarantee, mostly in the case of non-profits.

Limited Life Company (LLC)

Essentially a hybrid between a partnership and a private limited company, the TCI LLC is quite similar to some US LLCs and has seen some usage by multinational operations trading with the US.

Exempt companies can opt to be LLCs during registration.

Turks and Caicos LLCs have a standard duration of 50 years which in some cases can be extended to 150 years.

Other

Trust companies are also available in TCI. While they are effectively hindered from trading or doing business, they are often appointed beneficial owners of companies.

This can be done to protect assets or further enhancement of privacy for the company owners.

Banking in Turks and Caicos

There are seven banks licensed in TCI. The two most popular within the offshore sector are BCBTCI (British Caribbean Bank Turks and Caicos) and the Turks and Caicos Banking Company (TCBC).

The other banks open accounts for offshore companies or non-resident persons but not as readily as BCBTCI and TCBC, or only for wealth management.

As of writing, BCBTCI requires a minimum deposit of 1,000 USD whereas TCBC requires 50,000 USD or currency equivalent. I have yet to see any justification for TCBC’s higher minimum. They offer some form of wealth management but chances are you’ll get better services elsewhere.

Frequent readers may be familiar with my criticism of Caribbean banks in general; that they charge high fees for what is basic banking services. BCBTCI and TCBC are no different.

Financial services in Turks and Caicos

TCI is a relatively large offshore jurisdiction for insurance. TCI enjoys a moderately good international reputation and its insurance legislation is attractive to both insurance companies, sub-agents, and brokers.

While the Money Transmitters Ordinance is a very interesting piece of legislation with modest fees, it has not seen much usage yet.

Living in Turks and Caicos

There are very few and overall very low taxes in Turks and Caicos. There is no tax on personal income, capital gains, inheritance, or wealth. The only taxes you’d be likely to notice as a resident are import duties, stamp duties, and some other nominal taxes.

It’s easy to visit TCI as a tourist, with a large number of nationalities being granted an automatic 30-day tourist visa, which can be extended another 30 days. Acquiring a permanent residence permit (PRP) in TCI is subject to various programmes.

Work permits are also quite the hurdle to acquire. While TCI used to have lower fees than most of its neighbours, it has raised them over the last decade or so to be in line with the region.

If you have held a work permit for more than five years during which you have had your ordinary residence in Turks and Caicos, you can acquire a PRP if you can show investments of at least 75,000 or 200,000 USD in a local business (amount depends on which island the business is located).

Retirees can acquire PRP (without the right to work) by investing 50,000, 125,000, or 500,000 USD in real estate. The amount required depends on location of the real estate.

Final words

Turks and Caicos Islands is a somewhat under-utilized offshore jurisdiction. It has a lower profile than Cayman Islands and British Virgin Islands but shares many of the advantages of its more well-known cousins.

For those seeking a lesser known but still well-established and somewhat reputable offshore jurisdiction, TCI may very well be worth a closer look.

The corruption scandal tarnished the jurisdiction’s reputation somewhat, although it does not appear to have affected or involved the offshore financial sector of TCI.

Click here to see other posts in the Jurisdiction Spotlight series.

STREBER Weekly

Offshore banking, incorporations, payments, and compliance.

Jurisdiction Spotlight: Turks and Caicos Islands