WESTERN SAMOA OFFSHORE COMPANIES

Western Samoa is an excellent jurisdiction in which to open a company. The International Companies Act of Western Samoa was passed in 1987, so they have been in the business for many years and have experience. Western Samoa is however, still a relatively unknown offshore jurisdiction, and is not viewed with as much suspicion as some of the more well known tax havens such as the Cayman Islands, etc.

Total exemption from taxes is granted to "International Companies" incorporated under the 1987 Act as well as to "International Trusts" registered under the International Trusts Act, 1987. The International Companies Act stipulates that entities operating under the offshore legislation are exempted from all taxes, any direct or indirect levy and exchange or currency controls as long as the company is in business i.e. into perpetuity.

In our opinion, Western Samoa has the best legislation regarding offshore companies, tax liabilities and asset protection that is currently available. Western Samoa is not party to any mutual assistance, gateway, or information exchange agreements unlike some of the British Dependent Territories. While taking a hard line on money laundering and fraud, Samoa has legislated to protect the confidentiality of its International Companies. In addition to common law protection, it is a legislated criminal offence to divulge any information regarding the shareholders, officers or operations of a Samoan International Company.

The International Companies Act expressly denies any right to disclose information that "will, or is likely to, result in the payment of any tax, other penalty or any fine by the company" (section 227 (4) (c) of the Act). Western Samoan legislation also gives far reaching powers to an International Company. Of particular interest to prospective clients is Article 4, Schedule 1 of the International Companies Act, 1987 (Section 20). It states that under The Powers of an International Company "it may acquire, hold, dispose of or deal with the whole or any part of the undertaking of any other company, association or business".

A court order is only possible in cases of improper conduct of directors during winding up, fraud or dishonesty, or money laundering. Also, in Western Samoa the definition of "debt" specifically excludes any "taxation, fines or penalties imposed by any government". A foreign taxation authority is therefore unable to petition the court for the winding up of an International Company in Western Samoa for the recovery of tax related debts, because the court cannot recognize any taxation payable as debt.

The uniqueness of the Samoan legislation is also demonstrated by an asset protection section of the Act (Section 228 (B)) whereby a member can elect that his shares in the company can be automatically vested in a specified person on the occurrence of a specified event. The definition of "specified event" is flexible but it typically includes the occurrence of a foreign expropriation or court order. This can also be used by the original beneficial owner to pass a company on to his or her beneficiary upon presentation of the death certificate of the original owner. There are no similar statutory provisions protecting member interests in BVI or other traditional jurisidictions.

In addition, in Western Samoa, the statutory limitation for a creditor to petition the court for the reinstatement of a corporation previously struck off is only two years (Section 197 (6) of the Act). The comparable limitation period in some other countries is ten years, giving rise to a period of contingent liability five times greater than that of Western Samoa.

WESTERN SAMOA OFFSHORE COMPANY FEES

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OFFSHORE LEGISLATION

The following legislation was introduced in 1988-1989:

• Trustee Companies Act 1987 
• Offshore Banking Act 1987 
• International Trusts Act 1987 
• International Insurance Act 1988 

Amendments to the offshore legislaton have been enacted regularly in response to recommendations from the offshore industry.

The legislation now incorporates some of the most up to date features of offshore legislation. It is designed to attract a high quality international clientele whilst providing for maxium flexibility, an efficient service and a minimum of formality, all at an acceptable cost. Further legislation to cover other aspects of offshore business and to improve the facilities offered by the Western Samoa offshore finance centre will be introduced as required.

The offshore legislation is in a separate legislative jurisdiction in Western Samoa and is distinct from the country's domestic jurisdiction. Entities registered within the offshore finance centre jurisdiction, other than trustee companies, are not subject to the domestic legislation of Western Samoa.

Entities operating under the offshore legislation are exempted from all Western Samoan income taxes, stamp duties, withholding taxes, and any other direct or indirect tax, duty or levy. They are also exempted from exchange or currency controls and foreign exchange levies.

All aspects of the offshore banking legislation incorporate stringent secrecy provisions to protect clients from unauthorised disclosures. The absence of any double taxation treaties provides further protection against fiscal enquiries.

The attractions of Western Samoa as an offshore finance centre can be summarised as:

• a long history of social and political stability; 
• economic stability; 
• modern offshore legislation providing maximum flexibility; 
• excellent asset protection; 
• exemption from all taxes and duties; 
• an established domestic banking system with proven international connections; 
• a well developed economic and commercial infrastructure; 
• competitive cost structure. 

GENERAL INFORMATION ON WESTERN SAMOA

Western Samoa lies in the Central South Pacific, 2,900 kilometres north-east of New Zealand (a 3 hour flight) and just over 4,000 kilometres south-west of Hawaii (a 5 hour flight). Western Samoa's modern international airport which can accommodate 747 type aircraft is serviced by Air New Zealand, Polynesian Airlines (the national carrier), Air Pacific and Hawaiian Airlines. These services provide direct access to New Zealand, Australia, Fiji, Cook Islands, Hawaii and Los Angeles.

Local time is 11 hours behind Greenwich Mean Time, 6 hours behind New York, 19 hours behind Hong Kong and 21 hours behind Sydney, Australia.

The main island is Upolu and the town of Apia on that island is the administrative and commercial centre of Western Samoa. Apia has an exellent international telecommunications system with telephone, telex, facsimile and international direct dial facilities via satellite.

The total population of the island group is approximately 180,000. The indigenous population is Polynesian but English is spoken by most of the community.

The climate is tropical with good hotels, beaches, sporting and recreational activities, and other tourist facilities. Matters of tourist interest include traditional Samoan festivities and stores display many fine locally produced artifacts and clothing.

GOVERNMENT

Western Samoa has been a fully independent nation since 1962 and its constitution provides for a parliamentary government. Parliamentary elections are held every five years. The Legislative Assembly elects the Prime Minister as well as the Speaker. The Prime Minister selects his cabinet and together they form the Executive Council which has responsibility for executive Government.

The Government has re-affirmed continuing support and encouragement for the development of the offshore finance centre. There are two main political parties, and both parties support the status of Western Samoa as an offshore financial centre.

Western Samoa is a member of the United Nations, the South Pacific Forum, the Asian Development Bank and the World Bank.

LEGAL SYSTEM

Western Samoa is an independent Sovereign State with a written constitution which provides for a three-tier legal system consisting of a Court of Appeal, High Court and Subordinate Courts. The legal system is based upon the principles of the English common law and equity.

MONETARY SYSTEMS AND EXCHANGE CONTROLS

The Central Bank has responsibility for monetary policy, management of foreign exchange reserves, regulation of the commercial banks and supervision of the offshore finance centre.

The local currency unit is the Western Samoa tala which is equivalent to approximately US $0.40. Entities registered under the offshore finance centre legislation are not subject to any currency or foreign exchange controls.