Turks & Caicos To Revamp Financial Legislation

The Turks & Caicos Islands (TCI) have experienced a significant boom in the luxury tourism sector since the late 1990s. This has led to substantial levels of foreign direct investment and an explosion of 4 and 5 star tourism construction.
Turks and Caicos Islands Wealth Management
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Introduction

The Turks & Caicos Islands (TCI) have experienced a significant boom in the luxury tourism sector since the late 1990s. This has led to substantial levels of foreign direct investment and an explosion of 4 and 5 star tourism construction.

One of the unwanted by-products of the boom has been that the TCI government has paid less attention to the needs of financial services sector. TCI has had continuing success in the captive insurance sector both in producer-owned reinsurance companies (a niche in which the Territory is the market leader) and in recent years in pure captives. Nevertheless the insurance and other sectors of TCI’s finance industry have been neglected by successive governments captivated by the country’s stellar performance in attracting tourism and construction investment, and the result has been a marked absence of any new non-regulatory financial legislation.

Change in the air

Following a change of government in late 2003, the TCI’s new finance minister indicated, in early 2004, that there would be a renewed commitment to the financial sector. The government has since added new expert financial legislative drafting capacity and has now announced its intention to introduce, in short term, the following legislation:

  • Protected Cell Companies. Draft PCC legislation has now been circulated to the industry for comment and ought to be enacted in the next 1-2 months.
  • Mutual Funds. An overhaul of the Mutual Funds Ordinance, to make it much more user-friendly and to include an "expert funds" regime similar to the Jersey model, is being drafted.
  • Insurance. Input from the industry has been canvassed with a view to an amendment of TCI’s enduringly popular Insurance Ordinance.
  • Charitable Foundations. A charitable foundations law will be introduced later this year to facilitate the recognition in major onshore jurisdictions of charitable foundations incorporated or established in TCI.

In the medium term, the Government has promised that there will be a restructuring and modernisation of TCI’s Companies Ordinance and of its Trusts Ordinance, and that the legislative framework will be kept under ongoing review to ensure that the jurisdiction’s financial sector continues to develop and to provide an alternative plank of the Territory’s burgeoning economy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Turks & Caicos To Revamp Financial Legislation

Turks and Caicos Islands Wealth Management
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