The Turks and Caicos Islands - A Fiscal Paradise 90 Minutes From Miami Editorial, 22 April, 2016

Turks and Caicos, located in the Caribbean Sea, has become the latest British Overseas Territory to have announced plans to improve its work and residence permit regimes recently. Find out more about these sun-kissed, lightly-taxed islands, often abbreviated to the TCI, in this special feature.

Introduction to the Turks and Caicos Islands

The Turks Islands are named after the Turk's cap cactus (native to the islands and appearing on the flag and coat of arms), while the Caicos Islands derive from the native term "caya hico" meaning "string of islands." With pristine beaches, excellent diving locations, and just a short flight from Miami, they are a popular tourist destination for Americans in particular. The islands are also a major stop-off on the Caribbean cruise-ship circuit.

Together, the territory consists of two island groups in the Caribbean Sea south east of the Bahamas and north of Haiti with an area of 430 square kilometers. Eight of the fourteen islands are inhabited, Grand Turk, the seat of government, and Salt Kay being the most populous. Cockburn Town is the territory’s capital, although the most populous town is Providenciales, the center of tourist development.

The islands are five hours behind GMT.

A Brief History of the Turks and Caicos Islands

The TCI were originally discovered by Spanish explorer Juan Ponce de Leon but remained uninhabited until 1768 when Bermudians arrived and established a salt panning industry. From 1874 to 1959 the islands were a Jamaican dependency. In 1962 when Jamaica became independent the islands became a British crown colony.

Today the TCI has the status of a British Overseas Territory. While largely self-governing, the UK is responsible for foreign affairs and defense. The Queen remains head of state, and she is represented by a Governor.

The territory has, however, suffered from political instability in the recent past, when allegations of corruption and mismanagement within the Government prompted the UK to install an interim administration and provide financial assistance. Following a program of political and economic reforms, and the agreement of a new constitution, the islands’ Government is back in local hands.

Language and Culture

The approx. 50,000 population of the TCI is largely of black African descent, and the predominate culture is Afro-Caribbean. Citizens of the islands are known as "Belongers." The official language is English.

What’s The Weather Like?

The Turks and Caicos Islands have a tropical, marine climate, moderated by trade winds. Temperatures range from 15-32 degrees Celsius (59-90 Fahrenheit). The islands are relatively dry, with average annual rainfall of just 53 centimeters. However, be warned that hurricanes are common in the Turks and Caicos, with the hurricane season usually running from the beginning of June to the end of November.

The Economy of Turks and Caicos

The three pillars of the economy are tourism, fishing and financial services.

More than 1m visitors came to the islands in 2013, three-quarters of them from the United States. The majority of visitors arrive by ship.

Most food and nearly all capital and consumption goods are imported. 

Since there are virtually no taxes payable in the islands, the major sources of Government revenue include fees from offshore financial services and customs receipts on imported goods. However, as touched upon above, allegations of corruption within the local government, combined with the impact of the financial crisis and a narrow revenue base conspired to create a fiscal crisis in 2009. The Government has since managed to balance its books, but the islands remain virtually tax-free.

The Islands' currency is the US dollar.

Immigration Rules

The Government is keen to encourage inward investment and this is reflected in its immigration policy. The immigration authorities welcome qualified persons wishing to establish business enterprises or undertake employment in the islands and as such it is relatively easy to obtain a work permit. However, the policy of Government is to promote the employment of local islanders as much as possible and to this end a list of reserved activities has been published to ensure the hiring of Belongers.

For the purposes of working in the Islands, there are two types of defined employment, as follows:

Individuals above the age of 18 are eligible to apply for a Work Permit in the islands. The permit allows for lawful residency and right to work within a restricted category within the islands.

Work permits can be renewed up to three times for unskilled workers and five times for skilled workers.

For first time permit holders, they must leave the country until such time as their permit is approved. For renewals, a work permit holder can continue to work during the renewal process under the same employer.

In the case of an owner/manager permit or self-employed permit, a business license should be obtained first. A work permit will not be issued without a valid business license.

A work permit entitles a person to work for one employer who makes the permit’s application on the employee’s behalf. Spouses and children can be included in a work permit for skilled workers. Unskilled permits are prevented from including spouses or children.

Every employer in the TCI is required to have a valid working contract for all employees. The Labour Commission conducts periodic inspections of company premises to monitor compliance with the regulations of the TCI Labour Commission.

Fees for work permits vary depending on the type of permit and range from USD200 – USD10,000

Applications should be made to the Immigration Department.

A temporary work permit can also be obtained from the Immigration Department for those persons intending to stay for a period of up to one year, and who don’t intend to work or seek employment. However, holders of a temporary work permit are not entitled to then apply for a work permit.

A Permanent Residence Permit can also be issued with or without the right to work, but is a one-time application.


As mentioned above, in the Turks & Caicos Islands there have historically been no taxes other than import duties (at varying rates), stamp duty on transfers of real estate and some official documents, a probate duty on assets, some travel-related taxes, and business license fees for individuals who undertake professional or business activities.

Taxes introduced in more recent times include the Hotel and Tourism Tax, the Domestic Financial Services Sales Tax, Stamp Duty on Vehicle Hire, and the Telecommunications Tax (all at 12 percent), and the 2.5 percent Insurance Premium Sales Tax. However, in the 2015/16 Budget, the Government announced a proposal to consolidate these taxes into a single general services tax, possibly from 2017.

Under fiscal reforms encouraged by the British during the corruption crisis, a value-added tax (VAT) system was supposed to have been introduced in 2013 to widen the jurisdiction’s tax base. However, the national Government which succeeded the interim administration scrapped the VAT. The Government has also begun to reduce other taxes raised during the fiscal austerity period as it seeks to stimulate economic growth. For example, in the 2015/16 Budget, the Government proposed slashing business license fees by 50 percent.

In January 2016, it was reported that the House of Assembly is expected to approve legislation to enable the territory to automatically exchange tax information with the tax authorities of other jurisdictions.

Getting There by Air

The TCI has reasonably good international connections by air. Due to its close proximity to the northern Caribbean, Miami is the main gateway to the islands. However, the TCI can be reached from other cities in the US, including Atlanta, Charlotte, Fort Lauderdale and New York. British Airways operates a weekly direct flight to the Turks and Caicos Islands from London. The islands are also well connected to other Caribbean destinations by regional operators.

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