A managed trust company (MTC) is a viable structure where a foreign trust company wants to move existing trust business to the Cook Islands, or wants to provide Cook Islands trust structures to its clients. By contracting out its administrative functions to a resident trust company, (RTC) the MTC keeps its initial establishment and operational costs to a minimum, while protecting its intellectual property, maintaining its personal relationships with its clients, and retaining its branding. There are also tax advantages for the MTC in this structure.
Setting up a Managed Trust Company
The position in the Cook Islands is that Managed Trust Companies are licensed and regulated under the same suite of licensing, regulatory and AML legislation as that which RTCs are. They must submit a full licensing application and meet all the statutory requirements of the TCA in order to obtain their license. Once licensed they are subject to the same regulatory oversight of the FSC and the FIU as RTC’s.
There are some key differences between the licensing and regulatory requirements applied by the FSC for a Managed Trust Company (as opposed to an RTC). The specific differences are as follows:
- The MTC does not need to have a resident
- The MTC does not have to have its own offices and can conduct its
- business at the offices of the RTC.
- Whilst a Managed Trust Company must have a resident MLRO and CO, these can be provided by the host RTC.
It is important to recognise that the FSC has tended to be cautious in its approach to MTCs, and its decisions to date are discretionary. There remains some flexibility on the above matters therefore, depending upon factors such as;
- the standing and reputation of the applicant,
- whether the applicant operates in a recognised regulated jurisdiction, and
- the nature of the business to be carried out by the Managed Trust Company.
Why the Cook Islands
The Cook Islands is the leading jurisdiction for Asset Protection Trusts, and legislation establishing a new type of Relationship Property Trust was recently passed. In the current economic climate, these trusts are important wealth management tools. If your company is looking to expand its trust market and include this new innovative product in your toolbox then obtaining a license in the Cook Islands may offer you that opportunity.
T&F has professionals with extensive experience in both trust management and Managed Trust Companies. We also have FSC-certified compliance/MLRO personnel.
Trustees & Fiduciaries is a Cook Islands Trustee Company offering in depth knowledge of Cook Islands Trust and Corporate services. Contact us for further information at info@trusteescookislands.com or call us on ph: +682 292
