Council for Cook Islands foundation?

I am still looking to set up a foundation in the Cook Islands and as of today have one trusted person with EU citizenship/residence willing to serve as a protector or councillor and show up in a public UBO register if necessary.

The problem is that I can't find a company willing to provide a professional councillor for a decent fee, at least compared to the work involved - or lack thereof. For example, a CSP that can provide one charges almost twice as much for the registration itself compared to others. I could of course appoint my friend as a councillor but the foundation might become tax resident in my friend's country of tax residence due to POEM rules.

The other issue is that I would like to set it up in a way which would allow me to use it in combination with potential future residencies such as Cyprus, Switzerland, Andorra and some Latin American countries (Panama, Paraguay, Uruguay, Argentina). Not sure if this would even be possible as it seems like a private international law nightmare 😕

Any thoughts? Help will be appreciated.

Sols said:

Have you spoken with the companies listed here? Financial Supervisory Commision - Cook Islands :: Trustee Companies Several reputable service providers available licensed in Cook Islands, especially Asiaciti, Southpac, and Portcullis.

I have - with almost all of them.

Sols said:

Maybe you were quoted an outrageous sum

An independent professional concillor recommended by a CSP quoted at least $5k per year, while a professional councillor that would be provided by another CSP during setup costs at least $2.5k/year. The latter is fine but comes with significantly higher registration costs. The quoted fees are definitely not outrageous, but I would like to keep the expenses at a minimum - at least before more funds are endowed and/or until the portfolio grows.

Considering that the Cook Islands foundation act allows for council members to be non-residents I am curious to know the possible downsides of appointing my friend as a councillor. I know that there are e.g. Belize trusts with Swiss trustees, and have also found the following: "Another benefit of the Guernsey law is that the foundation can be administered off-island, e.g. from Switzerland [...]" (source)

Reading this makes me think it's usual for foundations to be managed onshore, and most likely not only in Switzerland. Would you mind commenting on this? Thank you.

Last edited: May 9, 2023

Sols said:

I don't want to sound rude but if these fees are too high at the moment, are you sure now is the right time to establish a foundation? Can you wait until you have more cash to spend on admin? Is it really worth it now? It's normal for foundations to cost tens of thousands to set up and in recurring annual costs.

Not rude at all, I've thought about it. However for a simple holding (ETFs, shares, etc.) tens of thousands seem like a ripoff. The quote I'm working with at the moment is in fact very reasonable: 4k USD setup + 4k USD annually for renewal and a protector. As long as I provide the council member(s), of course.

Sols said:

So if the purpose of your foundation is not adversely affected by having it tax resident onshore and exposed to the laws there, it's an option worth considering.

I know for a fact that the country my friend is tax resident of won't care when the bank account of the foundation gets reported via CRS. While in theory someone in future could sue the foundation there, the chances of that happening are miniscule - and as far as I know, the protector (provided by the CSP in this case) could simply veto his decisions. On the other hand him being the councillor would open up the possibility of opening a local bank account for the foundation.

Apart from doing more research I am currently looking into the Guernsey Registry just to see where some foundations are managed from in practice. I'll keep the thread updated thu&¤#

Last edited: May 11, 2023