Population
As of 2023, the population of the Turks and Caicos Islands ("TCI") is approximately 49,000, of whom 80% live on TCI’s commercial and tourism center, the island of Providenciales.

Location
TCI is situated in the Atlantic Ocean, immediately southeast of the Bahamas and about 90 miles to the north of Hispaniola.

Climate and Ecosystems
TCI has a tropical, relatively arid climate with a dry season from January to May and a modestly rainy season from June to November. The islands are coral, relatively low-lying (highest point 195 feet), with flora comprising dry dwarf forest, and with miles of white sand beaches, and ringed by one of the world’s longest coral reefs.

Infrastructure
TCI has seen major development in the last 30 years, and the infrastructure has grown concomitantly. Communications are modern and reliable with fibre optic broadband widely available through two telecommunications operators, Digicel and Flow. Because of TCI’s burgeoning luxury tourism industry, airlift is extensive, with daily flights to Providenciales from several major U.S. cities, and from Toronto, as well as direct flights from London. Direct flights from Miami to the island of South Caicos will commence in February 2025.

Ports and Waterways
The principal port is South Dock on Providenciales, the entry point for most cargo to the Islands.

Airports
Howard Hamilton International Airport ("PLS") on Providenciales is the primary gateway to TCI, with direct daily flights to several major hubs on the eastern seaboard of North America, as well as regional service via InterCaribbean Airways, a Caribbean-wide carrier headquartered in TCI. The airport also houses two private terminals servicing the luxury market. The growth in tourism traffic has led to pressure on the airport’s facilities at weekends and so the Government is now at the advanced stages of a tender process for a private/public partnership on a new terminal.

Water
Water on Providenciales is provided by Provo Water Company, which creates water at its desalination plants.

Electricity
The Canadian company Fortis, via its TCI subsidiary FortisTCI, is the main provider of electrical power throughout the country, typically provided by its diesel generators. The service is expensive but very reliable, and power outages are a rarity. There is growing use of solar energy, both privately and by Fortis, which recently announced that its latest diesel generator addition to its Providenciales power plant will be the last such generator that it will commission.

Tourism
TCI is a major center of luxury tourism. Its development for tourism purposes came late and so it avoided many of the pitfalls of mass development suffered by more advanced regional destinations in the 80s and 90s. The country has become the primary luxury tourism destination in the region, with a mix of upscale European-plan hotels, condominium hotels and private villas catering to a high-end market. The RevPAR (revenue per available room) metric that is widely used in the hospitality market typically shows a TCI figure double that of other countries in the region.

Understanding the Legal Framework

Legal System
TCI's legal system is based on English common law, supplemented by local statutes. The court structure comprises the Magistrate's Court, the Supreme Court, and the Court of Appeal of the Turks and Caicos Islands. There is a final right of appeal to the Privy Council in London. English case law precedents and those of other Commonwealth countries are persuasive, providing a predictable, independent and familiar legal environment for investors and businesses.

The Companies Ordinance 2017
The Companies Ordinance 2017, modeled on the internationally-used and widely-respected International Business Companies Act of the British Virgin Islands, governs all aspects of company law in TCI. It establishes a modern, stream-lined regime for companies established in TCI or redomiciling to TCI from other jurisdictions: the Companies Registry is digitized and the bulk of filings are now online.

Permissible Corporate Structures
The Ordinance allows for the establishment of companies limited by shares, by guarantee and hybrids of those, and unlimited companies. Protected cell companies (attractive in the insurance industry) are also permitted.

A separate statute, the Limited Partnerships Ordinance, allows for the establishment of limited partnerships in TCI.

Incorporation
Incorporation of a TCI company is a quick process and is generally accomplished within 2-3 days of the filing of the incorporation documents.

Not applicable.

As is common in the region, TCI has a worker-friendly employment statute, the Employment Ordinance, covering a range of workplace issues such as contracts, minimum pay, unfair dismissal, redundancy and severance, holidays, and termination procedures.

TCI’s construction and tourism boom in the last 30 years has transformed not just the economy of the country, but also its demography. The islander population is of modest size, and the activities driving the boom, tourism and its by-product construction, are very labor-intensive. That has led to very substantial levels of immigration, with the foreign-born population of TCI now amounting to approximately 2/3 of all residents. TC Islanders, TCI citizens, and permanent residents with the right to work are the only people who do not require a work permit to work lawfully in TCI. The work permit and residency regime is complex and the application process is time-consuming. Though permits can be issued for up to three-year terms, they are typically annual.

Not applicable.

TCI produces little. Customs duties and fees (along with tourism and accommodation taxes, and stamp duties) on imports are a major source of tax revenue for the Government and are charged on almost all imported goods, at varying rates, in accordance with a customs tariff.

As is common in the region, TCI has a worker-friendly employment statute, the Employment Ordinance, covering a range of workplace issues such as contracts, minimum pay, unfair dismissal, redundancy and severance, holidays, and termination procedures.

TCI’s construction and tourism boom in the last 30 years has transformed not just the economy of the country, but also its demography. The islander population is of modest size, and the activities driving the boom, tourism and its by-product construction, are very labor-intensive. That has led to very substantial levels of immigration, with the foreign-born population of TCI now amounting to approximately 2/3 of all residents. TC Islanders, TCI citizens, and permanent residents with the right to work are the only people who do not require a work permit to work lawfully in TCI. The work permit and residency regime is complex and the application process is time-consuming. Though permits can be issued for up to three-year terms, they are typically annual.

Not applicable.

There are no restrictions on foreign ownership of TCI real estate, and this open-door policy has contributed greatly to TCI’s development as the Caribbean region’s preeminent luxury tourism destination, with wide-scale foreign ownership of TCI villas and condominiums.

There is no annual property tax in TCI, instead, there is a one-off 10% stamp duty on most properties on transfer (the rate is less for lower-value properties, and on islands in TCI other than Providenciales and its cays).

TCI companies are widely used to hold TCI real estate. To avoid the use of the transfer or issuance of shares in TCI companies as a stamp duty avoidance mechanism, there is also a duty on the transfer of shares of TCI landholding companies, at 8% of the fair market value.

Not applicable.

Not applicable.

Advantages of Forming a Company in TCI/ Compliance Requirements

Tax Benefits
TCI has no direct taxes, whether income, capital or corporate, and so TCI companies incur no direct tax liabilities in TCI in relation to their TCI activities.

Freedom from Bureaucracy
The corporate reporting requirements applied to TCI companies are modest, allowing business operations free from much of the red tape that applies elsewhere. While there is an annual secretarial filing with the Companies Registry, there is no requirement for an AGM, and no requirement to file financial reports or accounts (though accounts and financial records must be maintained).

Directors, Shareholders and Beneficial Owners
TCI companies require at least one director and one shareholder or member. Directors and shareholders/members can be individuals or corporate entities. There are no TCI residency requirements for directors or shareholders. Details of directors are public. Details of shareholders can be disclosed by the Registry only with the consent of the company (subject to certain police/regulatory exceptions). Details of beneficial owners are filed but are not currently disclosable (except pursuant to court orders or in the course of specified police or regulatory inquiry).

Registered Agent and Registered Office
All TCI companies must maintain a registered office and appoint a registered agent in TCI. The registered office serves as the official address for legal documents, and the agent facilitates communication with regulatory authorities. A registered agent assists in organizing and documenting board meetings, resolutions, and other matters of corporate governance including the maintenance of corporate records mandated by the Companies Ordinance. Companies must pay annual Government fees, and filing fees in connection with documents filed at the Companies Registry.

Economic Substance
In common with many other financial centers, TCI now has economic substance rules requiring companies carrying out certain types of business to maintain a physical presence in the country. As this article relates to doing business in TCI and therefore contemplates entities with a physical presence in the country, those rules are not material to this note.

Business Licensing
No one can conduct business in TCI without holding a valid TCI business license. Simply owning real estate (raw land, a house, a condominium) is not typically treated as doing business. Pretty much every other commercial activity is doing business.

Business licensing is regulated by the Business Licensing Ordinance. Certain business activities are reserved for TC Islanders, and foreigners will not be granted a license in those categories.

The initial licensing process is time-consuming (allow 3-6 months), though annual renewals after that are straightforward. Corporate applicants must be either incorporated in TCI or, if incorporated elsewhere, must be registered in TCI as a foreign company (effectively, a branch). Different annual fees apply to different categories of licenses, and licenses are renewable annually on April 1.

Not applicable.

Not applicable.

Not applicable.

Voluntary Liquidation
Business insolvency in TCI is beyond the scope of this note and so it is assumed for our purposes that a business termination will be effected by voluntary (solvent) liquidation of the company concerned.

The process required process is set out in the Companies Ordinance, and can be summarised as follows:

• A TCI company may be voluntarily liquidated only if it:
  • has no liabilities;
  • is able to pay its debts as they fall due and the value of its assets exceeds its liabilities.

• If any of the above conditions are not satisfied, there must be a creditors’ liquidation by a qualified insolvency practitioner.
• In order for a company to be voluntarily liquidated, the directors of the company must:
  • make a declaration of solvency stating that, in their opinion-
    • the company is and will continue to be able to discharge, pay or provide for its debts as they fall due; and
    • the value of the company’s assets equals or exceeds its liabilities; and
  • approve a liquidation plan specifying-
    • the reasons for the liquidation of the company;
    • their estimate of the time required to liquidate the company;
    • whether the liquidator is authorized to carry on the business of the company if he determines that to do so would be necessary or in the best interests of the creditors or members of the company;
    • the name and address of each individual to be appointed as liquidator and the remuneration proposed to be paid to each liquidator; and
    • whether the liquidator is required to send to all members a statement of account prepared or caused to be prepared by the liquidator in respect of his actions or transactions.
• The liquidation plan must be approved by the directors no earlier than 6 weeks before the resolution appointing a voluntary liquidator.
• A voluntary liquidator or liquidator may be appointed either by resolution of directors or by resolution of members.
• When appointed a liquidator must:
  • Within fourteen days of the commencement of the liquidation/ date of his appointment, file the following documents:
    • a notice of appointment;
    • the declaration of solvency made by the directors or an extract complying; and
    • a copy of the liquidation plan; and
  • within thirty days of the commencement of the liquidation, advertise notice of his appointment in the TCI Government Gazette and a local TCI newspaper.
• The principal duties of a voluntary liquidator are to:
  • Take possession of, protect and realize the assets of the company;
  • Identify all creditors of and claimants against the company;
  • Pay or provide for the payment of, or discharge, all claims, debts, liabilities and obligations of the company;
  • Distribute the surplus assets of the company to the members in accordance with the articles of the company;
  • Prepare or cause to be prepared a statement of account in respect of the actions and transactions of the liquidators; and
  • Send a copy of the statement of account to all members if so required by the liquidation plan.
• Upon completion of the liquidation, the voluntary liquidator must file a statement that the liquidation has been completed and upon receipt of the statement, the Registrar of Companies will strike the company off the register and issue a certificate of dissolution.

Additional Considerations
In addition to the steps outlined above, companies ought to have regard to their tax, national insurance, and national health insurance obligations, obligations to employees, and termination of government-issued licenses, and related regulatory issues in relation to the business, in the liquidation plan.

Another practical consideration to avoid the inadvertent overlooking of any assets in the liquidation is the execution of a “sweep-up” assignment to the shareholders entitled to the surplus on winding-up of any assets not specifically dealt with in the liquidation. This is easily done and avoids a lot of later difficulty if something is overlooked.

Not applicable.