which also incorporate a number of asset protection features. Limited Liability Companies Act 2008 The Cook Islands Limited Liability Companies Act 2008 (‘LLC Act’) contains several specific features designed to provide and enhance the protection afforded to a client’s wealth when holding, managing and investing assets through a Cook Islands limited liability company (‘CI LLC’). - The sole and exclusive remedy for a creditor against a membership interest in a CI LLC is the right to apply for a charging order. - A charging order only entitles a creditor to distributions, as and when made by the CI LLC, in relation to the membership interest. It is not to be construed as a lien on or assignment of a membership interest or entitle the creditor to exercise any membership rights in relation to that interest. - The person in whose favour a charging order has been issued shall have no right to interfere in the management of the CI LLC, seize or liquidate its assets or effect its dissolution. - Contribution calls made by the CI LLC on members can be paid by the company from capital or income otherwise payable to members as distributions. This is also the case where a charging order has been issued upon a member’s interest. In such circumstances as the distribution will never reach the member, the creditor has no claim to it. - Foreign judgements seeking to deprive a member of a CI LLC of any membership interest or rights will not be recognised in the Cook Islands courts. Foundations Act 2012 The Act incorporates a number of the asset protection features contained in the ITA, including those in relation to foreign judgements and forced heirship rights, but most significantly it has adopted the fraudulent conveyance rules providing dates and events to give certainty to creditors seeking to claim against transfers to the foundation. How has the government of the Cook Islands worked to ensure that the country proves attractive for the preservation and protection of wealth? Whilst supporting the offshore industry by passing laws to develop and enhance wealth protection, the Cook Islands government has also passed laws and regulations to ensure the Cook Islands is not included in the blacklists published by organisations such as the FATF, OECD and EU. The government’s commitment to meet its international obligations and ensure the Cook Islands is not a target for money laundering, tax evasion and other financial crimes, has cemented its international reputation and good standing ensuring the Cook Islands remains open for business and a wealth protection jurisdiction of choice. EXPERT INSIGHT 51 About Alan Taylor Alan Taylor is currently the interim CEO of Cook Islands Finance. He graduated from Auckland University in New Zealand with degrees in law and economics and is admitted to the bar in New Zealand, with working experience in the international financial services industry in the Cook Islands, Jersey and Singapore. Alan has held legal, business development and senior management positions in both public and private organisations and is a member of STEP, the Institute of Leadership and Management and the New Zealand Institute of Directors. About Cook Islands Finance Cook Islands Finance is the operating name of the Financial Services Development Authority, the Cook Islands government agency responsible for the promotion and development of the country’s financial services industry. It seeks to increase awareness of the industry internationally in order to generate and sustain long term professional and client relationships. Contact Alan Taylor CEO Cook Islands Finance P.O. Box 3255, Clarkes Building, Parekura, Rarotonga, Cook Islands Tel: +682 211 75 E: alan.taylor@cookislands.gov.ck www.cookislandsfinance.com 1 13 Elizabeth 1 Ch 5 (1571).
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