The Turks And Caicos Islands

• Published date: 13 February 2023
• Subject Matter: Corporate/Commercial Law, Tax, Insolvency/Bankruptcy/Re-structuring, Corporate and Company Law, Insolvency/Bankruptcy, Tax Treaties
• Law Firm: Griffiths & Partners
• Author: Murray Snider

The legal system in Turks and Caicos is based on English common law, with certain adaptations to local circumstances. This summary provides an overview of the legal framework and key aspects of conducting business in the Turks and Caicos Islands.

The Turks and Caicos Islands ('TCI') is a British Overseas Territory ('BOT') situated south of the Bahamas and approximately 500 miles southeast of Miami. TCI's language is English, and the official currency is the United States dollar. TCI is known as an offshore jurisdiction and financial centre. The legal system of TCI is based on English common law with local statutes and some UK statutes extended to apply specifically to TCI. TCI has a codified constitution, a Supreme Court (court of the first instance) and a Court of Appeal. The Judicial Committee of the Privy Council remains TCI's final appellate court.

Investment Treaties

Unless expressly authorized to do so by the United Kingdom ('UK') government BOTs such as TCI do not have the authority to become party to international treaties and the UK must extend its territorial scope to include them. The UK government cannot compel BOTs to request the extension of treaties but can extent treaties to them for acceptance. Currently, the TCI has 11 Bilateral Investment Treaties ('BITs') that have been extended to them including, Belize, Bolivia, Grenada, Guyana, Hungary, the Republic of Korea, the Philippines, Singapore, St. Lucia, and Tunisia. Compared to other BOTs and other offshore jurisdictions TCI provides investors with a higher degree of investment protection.

Dispute Resolution

In addition to conventional litigation, TCI offers resolution through alternative dispute resolution with both arbitration and mediation available. The Arbitration Ordinance CAP 4.08 governs domestic and international arbitration agreements and arbitration proceedings. There is no restriction on what subject matter may be arbitrated and parties are free to make choice of law and procedural decisions. The Court-Connected Mediation Rules 2021 have also been introduced in TCI and allow civil matters to be referred to mediation.

Taxation

TCI is a tax-neutral jurisdiction with no direct taxation. There is currently no income, corporate, capital gains, personal, or inheritance tax. There is however stamp duty payable on transfers of land, duties on imports ranging from 5% to 45%, consumption tax, and other forms of indirect taxes for those who choose to work and live in the TCI. While there...