WESTERN
SOMOA
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.
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.
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:
General Information on W. Somoa
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.
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 & Exchange Controls
The Central Bank is responsible 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. Entities registered
under the offshore finance centre legislation are not subject to any
currency or foreign exchange controls.
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