Answer ... (a) Commercial/corporate
A buyer should inspect the usual corporate documents, including:
- the target’s certificate of incorporation;
- its articles of incorporation;
- statutory registers (eg, registers of directors and officers, members, beneficial ownership, and charges); and
- any shareholders’ agreement in place.
A buyer should also inspect any material commercial contracts to check for any change of control provisions.
The register of members of a Turks & Caicos Islands (TCI) company is not publicly available to a third party when enquiring with the Financial Services Commission and the Companies Registry, so it should be provided by the target as part of the due diligence process.
(b) Financial
A buyer should inspect all relevant accounting books and records in order to enquire as to the financial position of the target.
(c) Litigation
Searches of the Supreme Court’s cause book and winding-up book are usually carried out to ensure that the target was or is not involved in any local litigation or liquidation/winding up procedure. It is typical to look back between three and five years in the context of these searches.
(d) Tax
The TCI is tax neutral as there is currently no income, corporate or capital gains tax, and no estate duty, inheritance tax or gift tax. Other than stamp duty on transfers of land, no registration, documentary or any similar taxes or duties of any kind are payable in the TCI in connection with the signature, performance, or enforcement by legal proceedings of any TCI law-governed documents.
The TCI is compliant with the requirements of the Organisation for Economic Co-operation and Development and the EU Code of Conduct Group for Business Taxation.
(e) Employment
Employment contracts for employees must comply with minimum protections under the TCI Employment Ordinance (CAP 17.08).
(f) Intellectual property and IT
The Trademarks Ordinance (CAP 17.04) establishes a TCI Register of Trademarks and the Patents Ordinance (CAP 17.03) provides for a TCI Register of Patents.
(g) Data protection
There is no legislation or regime regulating data protection in the TCI. The TCI courts recognise and subscribe to the common law duties of confidentiality and privacy, and English common law is persuasive, although not binding. Although there is no overriding local personal data protection legislation, all TCI entities that manage and maintain personal data are subject to the common law duty of confidentiality.
(h) Cybersecurity
There is no legislation or regime regulating cybersecurity in the TCI.
(i) Real estate
Transfers of real estate must be registered with the TCI Land Registry, which is open to public inspection. Title is acquired, and only perfected, upon registration. The land register is conclusive as to ownership, appurtenant rights and matters encumbering the title (with the exception of certain ‘overriding interests’), and it is state guaranteed (although it can be rectified to deal with matters such as error and fraud). Title insurance is neither necessary nor available in the domestic market.