The Companies Ordinance 2017 provides for the formation of companies TCIs. The Ordinance allows for unlimited companies as well as companies limited by shares or by guarantee. The most common form of company is that limited by shares. The TCI has several different categories of company, including:
- Domestic company – a company incorporated in the TCI that carries on business in the TCI.
- International company – a company incorporated in the TCI that carries on business outside the TCI.
- Foreign company – a company incorporated outside the TCI that carries on business inside the TCI.
- Non-profit company – a company limited by guarantee that are incorporated in the TCI and established solely for religious, cultural, educational, social purposes, etc.
- Protected Cell Company – a company formed under Part XI of the Ordinance whose assets are segregated into cells.
Where a company intends to do business within TCI, the company is registered as a Domestic Company. A company incorporated in a foreign jurisdiction that wishes to carry on business or hold land in the TCI must register as a Foreign Company with the Registrar of Companies within a month of undertaking such activities. Its status will then be similar to that of the Domestic Company.
Other key features of the TCI companies regime include:
- Single shareholders and directors are permitted.
- Resident or non-resident corporate directors, shareholders or secretary are permitted.
- A representative resident in the TCI must be appointed for the purpose of service of legal process.
- A company’s objects may be unrestricted.
- Annual general meetings are not required, and meetings can be held outside the TCI.
- An annual return must be filed specifying details of shareholders, directors, officers and capital structure.
- An annual declaration of compliance with exempt company conditions must also be made.
- There is no obligation to file financial statements, and accounts need not be audited.
- Subject to solvency requirements, the company may purchase or redeem its own shares.
- Companies may be incorporated with a translation of the English name appearing on the Certificate of Incorporation. The name may be represented in any foreign language or characters.
- A foreign language translation of the Memorandum and Articles of Association may be officially registered alongside the English version.
- The company’s capital may be registered in a foreign currency.
Companies may be registered as limited liability companies such that the liabilities of the shareholders are limited to the extent unpaid on their shareholdings. Hybrid Companies, which are limited both by shares and by guarantee, are also permitted.
Hybrids have two classes of member – shareholders and guarantee members – which provide great flexibility in the financing and distribution of profits within the company. The different rights and obligations that attach to each class of membership can be arranged to create structures that are precisely tailored to the different needs of the client.
Typically, a Hybrid will be structured so that the shares are issued on terms that each carries one vote but no rights to dividends or to participate in the capital or income of the company in any other way. The guarantee memberships are issued on terms that they carry no rights to vote but all the rights to participate in the income and capital of the company. In this way all control rests with the shareholders but all benefits flow to the guarantee members.
This ‘quasi trust’ structure, generally with professional managers acting as shareholders, offers many advantages to a guarantee member, including absence of ownership and control, enhanced confidentiality and the potential for straightforward transmission of assets upon death.
Companies must maintain a register of members and a register of directors and secretary. It is permitted to keep the registers at a location other than the registered office of the company on condition that a record of the location and a true copy of the registers are kept at the registered office and that changes made to the registers are entered on that copy within one week of the date of any change. Details of the members and directors are now recorded at the Companies Registry.
Once a TCI entity is incorporated, we provide a domiciliary service, which includes the provision of company secretary, registered office and resident agent. Full management services from our licensed corporate directors and nominee shareholders are also available and highly advisable in most cases. Re-mailing services are available at modest cost for all companies established by Sovereign.