Independent State of Samoa is a group of islands situated in the centre of the Southern Pacific Ocean, between Honolulu and Sydney, and having an area of 2,944 sq. km. The country has a population of 178,173 (July 2003 est.), with approximately 36,000 residing in Apia, the capital of Samoa located on the island of Upolu. Apia is the main industry and business centre in the island group.
Ninety per cent of Samoans are indigenous Polynesians. The official languages are Samoan and English. Samoa is mainly Christian (99.7%) and has a literacy factor of 99,7%.
New Zealand occupied the German protectorate of Western Samoa at the outbreak of World War I in 1914. It continued to administer the islands as a mandate and then as a trust territory until 1962, when the islands became the first Polynesian nation to re-establish independence in the 20th century. The country dropped the "Western" from its name in 1997.
The political system of Samoa is based on the Westminster model with a permanent (Samoan) Chief of State and Prime Minister (Head of Government) representing the executive branch of government. Cabinet consists of 12 members appointed by the Chief of state with the Prime Minister’s advice. The legal power is vested in the unicameral forty-nine members Legislative Assembly. The judicial power is represented by the Supreme Court, Court of Appeal and Land and Titles Court.
The Samoan economy is traditionally highly dependent on agriculture. The primary sector comprising agriculture, forestry and fishing account for around two thirds of GDP. Agriculture employs two-thirds of the labour force, and furnishes 90% of exports, featuring coconut cream, coconut oil, and copra. The manufacturing sector mainly processes agricultural products. Tourism is an expanding sector, accounting for 16% of GDP. Samoa currency is Tala (WST). Samoa is a member of the British Commonwealth, the United Nations and the International Monetary Fund.
Samoa law is based on English Common Law. Principal corporate legislation includes the International Companies Act of 1987, as amended (based primarily on New Zealand legislation), the International Trusts Act, 1987, the Offshore Banking Act, 1987, the International Insurance Act, 1988. Samoa does not have any tax treaties with other countries and is not blacklisted by FATF or OECD.
The type of company for international trade and investment is International Company. International Companies are regulated by the International Companies Act of 1987, as amended.
There are very few restrictions on the activities of a Samoa international company, and namely International Companies cannot:
- carry on business with any person resident in Samoa;
- own any interest in real property in Samoa, other than the lease of an office;
- undertake the business of banking, insurance, assurance, reinsurance, fund management, management of collective investment schemes, trust management, trusteeship or any other activity that may suggest an association with the bank or insurance industries without obtaining the appropriate licence.
Income or profits of Samoa companies incorporated under the International Companies Act of 1987 are exempted from income or corporation tax in Samoa. There is no stamp duty. The International Companies Act requires that every IC has a registered office in Samoa.
To incorporate an International Company, a Memorandum and Articles of Association of a proposed company must be signed by one or more natural or juridical persons, acting as subscribers, and submitted to the Registrar of International and Foreign Companies.
The Memorandum establishes the basic structure of the company including its name, the purposes for which the company is formed, authorized capital, details on the shares which may be issued including their par value, denomination, classes and the rights attached, and any other matters which affect the basic existence of the company.
The Articles of Association are essentially the by-laws of the company, which govern relations between the various members of the company. They deal with the procedures for calling meetings of shareholders, passing resolutions and transferring shares including any restrictions which may apply.
The name of the company may be in any language, but the Registrar may request an English translation to make sure that the proposed name is not a restricted or licensable name. All companies names must end in the word "Limited," "Corporation," "Incorporated," "Societe Anonyme" or "Sociedad Anonima," or their abbreviations "Ltd.," "Corp.," "Inc.," or "S.A.". The words Bank, Building Society, Savings, Loans, Trust, Trustees, Insurance, Assurance, Fund, Reinsurance, Co-operative, Council, Chamber of Commerce, University or their foreign language equivalents cannot be used without an additional approval. Moreover, any name identical to that of a company already existing or suggesting royal or government patronage cannot be used.
Once the original M&AA are filed and the proper fees paid, the Registrar of International and Foreign Companies will issue a Certificate of Incorporation, which specifies the name of the company, the date on which it was incorporated, and the company number. The Certificate of Incorporation constitutes evidence of the company's legal existence. The M&AA can be changed after incorporation by passing director(s') or shareholder(s') resolutions.
Standard authorised capital of an international company is USD 1,000,000, which may be expressed in any currency, and is divided into 1,000,000 shares of USD 1 each. The minimum issued capital is one share of no par value or one share of par value. The shares can be divided into such number of classes and series as the directors can determine by their resolution. Shares can be issued as registered or to bearer, shares of no par value, preference shares, redeemable shares and shares with or without voting rights.
International companies may have one or more shareholders, individuals or corporations of any nationality or residence. Shareholders need not disclose their identity to the Registrar, thus shareholder details do not appear on the public file.
After incorporation subscribers to the Memorandum and Articles of Association (a Trustee company resident in Samoa) become members of the company and relevant share certificates are issued. However such certificates are forfeited to the international company after 3 months thereof and are cancelled.
The day to day management of an IC is undertaken by the directors. Directors are appointed by existing director or directors, or, if there are none, by the Registrar on a request being made by a member of the company.
The minimum number of directors is one. They may be natural persons or bodies corporate of any nationality and need not be residents of Samoa. All companies must also appoint a secretary who can be a natural person or a body corporate, and is recommended to be resident in Samoa (otherwise the company will have to additionally appoint a resident agent).
International companies are not required to file any financial reports or tax returns in Samoa. However a company is required to keep its financial records at the registered office in Samoa.
Samoa companies are required to pay annual license fees in the amount of US$ 300. However at the time of incorporation the company can make a licence fee payment covering the following periods:
- 5 years US$ 1,000
- 10 years US$ 1,500
- 20 years US$ 2,000
Licence fees are due on the 30 th day of November of each year following the year in which the company is incorporated.
Companies may be wound-up in one of the following two ways:
- compulsorily by order of the Court
- voluntary by the company’s resolution
The Court may order the winding-up of an international company upon petition of the company itself (if it adopts a special resolution to the effect that it be wound up under the order of the Court), its creditors, liquidator or the Minister. Reasons for such petition may include default by the company to pay its annual fees on time, inability to meet its obligations and to pay its debts or a breach of the law by the company. In this case the Court will appoint a liquidator who will be responsible for investigating the company’s current state of affairs and submitting a relevant report to the Registrar.
If the company resolves to wind up voluntarily, it must submit a notice thereof to the Registrar. After that the Registrar will appoint an official liquidator and the procedure of winding up will be very much similar to that of compulsory winding up.
In Samoa it is possible to incorporate a company as a limited life international company again pursuant to the International Companies Act.
Generally speaking, Samoa limited life company is similar to the US limited liability company and is modelled on the Wyoming Limited Liability Company Act. The reason for designing this specific type of company is to ensure that the Samoa LLC entity will be interpreted by the US Internal Revenue Service as a transparent entity for income tax purposes. An LLC can be the most effective entity for investment into the USA.
Samoa LLC Memorandum and Articles of Organisation must specify the period of the company’s duration that, if no other period is specified, will be 50 years from the date of issue of the Certificate of Incorporation. Limited life companies must have at least two members. Management of the company can be vested in its members or otherwise a manager or managers may be elected by the members for this purpose.
Annual license fee of USD 300 is also payable on the 30th of November each year following the year when the company was incorporated.
No public record is maintained as to the identity of shareholders or directors. Public records of International Companies consist only of the Certificate of Incorporation, Memorandum and Articles of Association, name and address of the trustee company and records of payment of annual fees.
The International Insurance Act 1988 provides for licensing of all persons carrying on insurance business and prohibits any person acting as an insurer unless licensed under the Act.
According to the Act there are four classes of insurance licences in Samoa and they are as follows:
- Captive insurance licence under which the licensee is limited to accepting premiums from group companies only. This type of licence may be useful for self-insurance or consolidation of the group’s insurance risks. A typical captive insurance company is a wholly owned subsidiary of an industrial, commercial or government organisation which exists to insure all, or a selection of, the risks of that organisation and its affiliates. Captives may be owned by one organisation (a single parent captive) or by a number of different bodies (group or association captives). There are no restrictions on the types of risk that a captive can be used to insure. Minimum paid up capital requirement is USD 100,000.
- Re-insurance licence - the licensee is limited to accepting premiums from other insurance companies only. Minimum paid up capital requirement is USD 200,000.
- General and/or long term insurance business - allows for general and life assurance business and is usually granted to subsidiaries of established insurance companies or financial institutions. Minimum paid up capital requirement is USD 500,000 (for each category, if the company intends to be engaged in both general and long term insurance, then the minimum paid up capital will be USD 1,000,000).
- All categories licence allows for all of the insurance operations mentioned above is usually granted to subsidiaries of established insurance companies or financial institutions. Minimum paid up capital requirement is USD 1,300,000.
Offshore insurance companies licensed in Samoa are required to maintain a net asset position that is at all times greater than the minimum capital level set for each licence class. This position is annually confirmed by audited accounts, which must be filed with the Registrar each year.
Apart from that registered insurers carrying on general or long term insurance business are required to maintain a margin of solvency variable with the category of insurance business undertaken. There is no such a requirement for a captive insurance or re-insurance company.
A registered insurer may obtain permission to maintain a permanent establishment in Samoa and to employ its own management there, provided that such personnel have adequate knowledge and experience. Alternatively a registered insurer must appoint an insurance manager registered under the Act. Functions of that manager include keeping basic information regarding the accounts, any formal meetings and all insurance and reinsurance transactions.
According to the requirements for granting a license under the Insurance Act the applicant must:
- have the knowledge and expertise necessary to carry on insurance business in a competent manner;
- provide an adequate business plan (including the description of the type of insurance business, the structure of the company and the reasons for setting it up, detailed account of the proposed sources of funds and a three year financial forecast);
- at least one banker’s and two professional references, certified passport copy, police clearance certificate, curriculum vitae for each of the beneficial owners and directors of the proposed company;
- evidence confirming the financial status of the applicant and a bank statement from a major bank confirming that funds are available to subscriber for the capital of the insurance company.
The granting of a licence is within the absolute discretion of the Governor. Government fees (paid annually) are as follows:
Licence class |
Application fee (USD) |
Issue of licence fee (USD) |
Captive insurance |
1,000 |
250 |
Reinsurance |
1,000 |
1,000 |
General and/or long term |
1,500 |
1,500 |
All categories |
1,500 |
2,000 |
Registered insurance manager |
100 |
250 |
Offshore Banking Act 1987 provides for the following three categories of bank licenses:
- "A" class licence is an unrestricted banking licence which is normally granted to subsidiaries of established banks and financial institutions as well as experienced bankers with appropriate financial backing. Minimum paid up capital requirement is USD 10 million.
- "B" class licence (B1) allows to accept deposits from the public and is mostly used for offshore deposit taking or merchant banking activities. This licence is usually granted to those who have an association with an onshore bank or reputable financial institution. Minimum paid up capital requirement is USD 2 million.
- "B" class licence (B2") is also called “captive” or “in-house” banking licence and is usually used for the treasury operations of an associated group of companies. This type of licence does not allow to accept deposits from the public or to offer cheque book facilities. Minimum paid up capital requirement is USD 250,000.
Offshore banks in Samoa are required to maintain a net asset position that is at all times greater than the minimum capital level set for each licence class. This position is annually confirmed by audited accounts, which must be filed with the Registrar each year.
Requirements for granting a license under the Offshore Banking Act is similar to the requirements set out for insurance companies. Again granting of a licence is within the absolute discretion of the Governor. Government fees (paid annually) are as follows:
Licence class |
Application fee (USD) |
Issue of licence fee (USD) |
Class “A” banking licence |
7,500 |
10,000 |
Class “B” banking licence |
5,000 |
2,500 |
|
Jurisdictions
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