Three types of banking licenses are issued in the Cook Islands. These are international banking licenses, restricted international banking licenses and domestic banking licenses. International banking licenses are granted to international/offshore banks for the purpose of conducting unrestricted offshore banking from within or in the Cook Islands. Restricted international banking licenses, on the other hand, allows an offshore bank to provide only a specified banking services to which all banking business undertaken is restricted. Applications for offshore banking licenses in the Cook Islands can be made by foreign banks or a bank which is a fully owned subsidiary of another or an approved corporation or legal entity. Any application for an offshore banking license in the Cook Islands must be presented in writing. Anyone to whom a Cook Islands offshore banking license has been granted must be the prescribed offshore banking fee. Cook Island offshore banks are prohibited from accepting deposits and doing banking business with local residents.

An international trust can be organised in the Cook Islands for charity, holding property and other purposes. Cook Islands offshore trusts are executed through a trust instrument by a settlor, trustee or other qualifying person. Cook Islands offshore trusts are usually used for protecting assets from various possible threats such as greedy spouses, creditors and personal spendthrift habits. The International Trusts Act 1984 of the Cook Islands is very clear on matters such as the rule against accumulation, perpetuity period, the rule of law, forced heirship, the rule against double possibilities and the power of revocation.

Cook Island offshore partnerships are incorporated by the Registrar of International and Foreign Companies. To be recognised as an offshore partnership both members must be non-residents of the Cooks Islands, at least one of which must be an international business company, a trustee company or a registered foreign company. The prescribed certificate for incorporating an offshore partnership with the registrar must be submitted by a trustee company. The registration certificates issued to a Cook Island offshore partnership is valid for one year only. Upon expiration, registration certificates are to be renewed annual on or by the date that the partnership is due to celebrate its anniversary. Every offshore partnership that has been established in the Cook Islands must have a registered office which provides a local Cook Island address for the international company, registered foreign company or trustee company that is a partner.

International companies incorporated in the Cook Islands cannot be owned by any citizens or residents of the Islands, or by a company which is registered under the Companies Act. The services of a Cook Islands international company are to be provided solely overseas to foreign countries and residents as the basis of granting tax exemptions to a Cook Islands offshore company is that of not taxing income that does not originate from within the Cook Islands. International companies can undertake almost any type of business activity as long as it is keeping with the laws of the country where business is being done and does not constitute any other business which according to the International Companies Act requires licensing; offshore banking and insurance business, for example. A Cook Islands offshore company can be setup as a an unlimited company, a company limited by guarantee, shares, by shares and guarantee, no liability or a mutual company. A Cook Island offshore company is incorporated by lodging the memorandum and articles of association with the registrar.

Cook Islands Limited Liability Companies are similar to international business companies in many ways, one of those being the limited liability of the company’s officers and the ability to conduct trade globally. Limited Liability Companies, however, are simpler in structure in that the officers are called members and directors and shareholders. Not shares, but contributions are made to accumulate capital and thus, a limited liability company is structured in a manner that if taxes were to be applied in the Cook Islands (although not allowed to conduct busies domestically), tax would be liable on income and profits because of the pass-through setup of a Cook Island Limited Liability Company. To be incorporated, the name of an LLC must end with limited liability company, LLC or L.L.C, and must be approved by the registrar. A Cook Island’s LLC name must not be derogatory or include words that are misleading to the public with respect to the business carried out by the LLC or the disallowed use of words such as insurance, annuity and assurance. Cook Island offshore LLCs are formed by filing the Articles of Organization. A registered office in the Cook Island must be maintained at all times.