Company Formation and Management Services
The Companies Ordinance 1981 is one of the foundations upon which the TCI’s success as a financial services centre has been built (which has since been superseded by the Companies Ordinance 2017). The Companies Ordinance provides a choice between the Exempted Company as an offshore vehicle and the Ordinary Company as the standard vehicle for business conducted within the TCI.
The attraction of the TCI Exempted Company is the combination of its tax-exempt status and minimal disclosure and administrative requirements. It does not have to use the term “Limited” in its name and may include such corporate titles as “Inc.”, “S.A.” and “A.G.”.
To obtain exempt status, the subscribers must submit to the Companies Registry at the time of incorporation a signed declaration stating that the business of the company will be mainly carried on outside the TCI. Exempted Companies will receive a certificate issued in the name of the governor that guarantees that the company will be exempt from all forms of taxation, both income and gains, for a period of 20 years from its date of incorporation.
Other key features 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. 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.
Exempted 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. The register of members must be made available for inspection by members, as with an Ordinary Company.
Where a company intends to do business within TCI, the company is registered as an Ordinary 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 Ordinary Company.
Both Ordinary Companies and Exempted Companies may be registered as limited liability companies such that the liabilities of the shareholders are limited to the extent of their paid up 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. Thus 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.
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.
Note: Ancillary services
In addition to providing incorporation, domiciliary and management (directorship) services, a range of ancillary services at competitive prices is available on request. These services include, but are not limited to: provision of dedicated telephone lines; office and personnel assistance; designated staff members (temporary or permanent availability); assistance with office relocation, introduction to real estate agents, government agencies and other third parties.
Trust Formation and Trustee Services
Trusts have many applications and advantages, including the protection and preserving of assets, tax planning or just avoiding the expense and delays of obtaining probate under a will. They also provide a high degree of confidentiality. Trusts are recognised in TCI and the territory’s Trusts Ordinance (1990) (based on a Jersey model) is comprehensive. In addition to a codification of various principles of the common law and equity, the ordinance contains specific anti-forced heirship provisions, the effective abolition of the rule against perpetuities, and solvency-based creditor protection provisions.