The TCI is a well-regulated jurisdiction within the international financial services community. It commenced automatic exchange of financial information with other jurisdictions on an annual basis under the OECD/G20 Common Reporting Standard (CRS) in 2018. It is also rated ‘Largely Compliant’ by the OECD Global Forum for Exchange of Information on Request.
A member of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) since 2017, the TCI has also signed the signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the Multilateral Competent Authority Agreement (MCAA).
In 2019, the TCI was removed from European Union’s ‘grey list’ (Annex II) of non-cooperative tax jurisdictions that have made a high-level commitment to comply with the required criteria within an agreed timeframe. A country is removed from this list when it has addressed the issues of concern for the EU and brought its tax system fully into line with the required good governance criteria.
The Companies Ordinance 2017 requires all companies to file, via a licensed resident agent, relevant beneficial ownership information with the FSC’s Beneficial Ownership Register. The legal framework is also in place for country-by-country reporting of profit or losses of entities incorporated or resident within the TCI that are a part of a multinational group with consolidated group revenue of €750 million or more during the previous fiscal year.
The Companies and Limited Partnership (Economic Substance) Ordinance 2018 and accompanying Regulations, which came into force on 1 July 2019, provide for substantial economic presence and annual reporting of entities carrying on certain activities that are incorporated, registered or continued under the Companies Ordinance.
The Companies Ordinance 2017 addressed the ‘harmful tax’ practice known as ‘ring-fencing’ by removing preferential tax exemptions that were available to non-residents – companies and other entities established in the TCI but carrying out activities outside the TCI and not authorised to conduct business in the TCI – but not available to residents.
The TCI Financial Services Commission (TCIFSC) is an independent statutory body with responsibility for the regulation of all financial services businesses operating in or from the TCI, and the supervision of designated non-financial business and persons (DNFBPs) and not-for-profit entities operating in or from the TCI. The TCIFSC, through the Commercial Registry, is also responsible for the administration of company formation, registration, patents, trademarks and business names.