Abstract:
During the 1990s, Niue worked to establish itself as an offshore financial centre. Niue introduced a series of measures including a Trusts Act that had the capability of enabling foreign settlors to evade tax in their home country. At the time, New Zealand had similar legislation regarding its offshore trust industry. By the mid-2000s, much international pressure had been applied to Niue and the offshore centre was reportedly shut-down. Having close ties and a legal framework very similar to New Zealand, Niue was demanded to adopt exchange of information agreements with other countries and disclose information regarding its financial operations.
Since the 1990’s, New Zealand has produced significant legal reform regarding disclosure of offshore trust information. The most recent change came about in 2017 after it came to New Zealand’s attention that offshore trusts in New Zealand were being used as a means for foreign settlors to evade tax in their home countries. Before the legal reforms, the New Zealand offshore trust regimes regarding disclosure were similar to Niuean offshore trust regimes. Niue on the other hand, although has recently complied with certain international standards regarding information disclosure, still has the same offshore trusts legislation and has had very little legislative reform regarding trustee disclosure of information.
This paper will argue that the existence of the Niuean Trusts Act will enable the country to be used as a viable tax haven for foreign settlors. There are four main parts to this paper that will try to address and analyse this theory. First, the New Zealand legal regimes surrounding offshore trusts will be analysed for comparison and analogy. Secondly, the Niuean Trusts Act and measures that enable foreign trusts to be used in such a manner will be discussed. Thirdly, analysis will also be made to see the international pressure which subsequently made Niue conform to international standards of disclosure of information and the effects of these agreements. Lastly, it will then analyse the possible legal avenues available to Niue and legislative reforms regarding disclosure of trustee information that Niue should adopt in order to decrease the potential viability of it being a tax haven for foreign trusts.
