The Falkland Islands are located in the South Atlantic Ocean some 480 kilometers east of Argentina. The country is comprised of over 200 islands with a total area of 12,710 sq.km. The Falkland Islands are a British Overseas Territory; the UK is responsible for the defense and foreign affairs of the Islands. The official language of the Islands is English while Spanish is also spoken by the locals.
The main economic activity of the Falkland Islands pertains to tourism, driven by the diverse wildlife population such as sea lions, seals, penguins, and several rare species of birds. Another contributor to the economy is the Islands’ fishing industry; fish found in the nearby waters is rarely found in other oceans.
Types of business structures in the Falkland Islands
Despite a low population, the country has bustling economic activity, especially in the peak seasons. Although the tourism industry of the country is still in its infancy with no 5-star hotels or resorts, however, the tourists visit because of the rusting settings and natural beauty.
There are several business structures available for investors to choose from in the Falkland Islands.
| S# | Type of companies | Local name | Min.paid-up capital required |
| 1. | Sole Proprietorship | – | – |
| 2. | Partnership | – | – |
| 3. | Limited Liability Company | – | – |
Note that there is no minimum paid-up capital required for any format of business in the Islands. However, companies are obliged to comply with the relevant laws provided in the Companies Ordinance 1982. Some of the important features of the Ordinance are listed below:
- Company must have one shareholder and one director of 18 years or above age.
- Must have a registered office in the Islands
- Companies must submit annual financial statements
Above requirements are only enforced where relevant.
Sole Proprietorship
A sole-ownership business is run by a single natural person. The owner is personally responsible for debts and liabilities occurring in the business. It is a simple and effective business format ideal for small investors, skilled people, freelancers, etc.
Partnership
Two or more persons can start a partnership business. Partners can be general or limited; both are designated with different levels of liabilities. A general partner assumes full responsibility for debts, losses, and other liabilities, while a limited partner is only liable to the extent of his/her share in the business.
Limited Liability Company
An LLC is a more formal and complex business structure than the previous two. It has to comply with several state laws and regulations. An LLC is considered a legal person; meaning that all the debts and liabilities are the responsibility of the company and not the owners.
Cost involved in registering and incorporating a company in the Falkland Islands
The costs incurred during the registration process vary depending on the size and nature of the business. Here are a few costs that are likely to be incurred by any sort of business structure.
Company incorporation
The fee for incorporating a company in the Falkland Islands is approximately £400 (GBP).
Registered office
All companies must have a registered office in the Falkland Islands. The cost of renting office space will depend on the location and size of the office.
Accounting & audit
Companies are required to maintain proper accounting records and submit annual financial statements and tax returns. The cost of hiring an accountant or auditor will depend on the size of the company and the complexity of its operations.
Legal fees
Companies may require legal advice on various matters such as company formation, contracts, and regulatory compliance. Legal fees will depend on the nature and complexity of the legal services required.
Cost of doing business in the Islands
The expenses incurred by companies during the normal course of business are termed operational expenditures. These expenses are recurring and must be included in the budgeting of a company.
Labor costs
The cost of labor in the Falkland Islands is higher than in many other countries due to the limited labor market and the high cost of living. This means that wages and salaries may be higher than in other countries.
Transportation costs
The cost of transporting goods and services to and from the Falkland Islands is high due to the remote location of the islands. This can make it more expensive to import and export goods.
Energy costs
The Falkland Islands rely heavily on imported fuel for electricity generation, which can be expensive due to transportation costs.
Infrastructure costs
The cost of building and maintaining infrastructure in the Falkland Islands is high due to the harsh climate and the need for specialized equipment and materials.
Regulatory compliance
Companies operating in the Falkland Islands must comply with local regulations and standards, which can add to the cost of doing business.
Benefits of doing business forming a company in the Falkland Islands
Despite the high operational cost incurred by the business, there are several benefits exclusive to the Falkland Islands. The strategical location of the Islands also provides an edge to companies registered here.
Some are stated here:
Stable political and economic environment
The Falkland Islands have a stable political and economic environment, which provides a secure environment for businesses to operate in.
Low tax rates
The Falkland Islands have a low tax regime, with no corporate tax, capital gains tax, or inheritance tax. This can make it an attractive location for businesses looking to reduce their tax liabilities.
Strategic location
The Falkland Islands are strategically located near South America and Antarctica, making them an ideal location for businesses involved in industries such as shipping and oil exploration.
Skilled workforce
The Falkland Islands have a highly skilled and educated workforce, with a strong work ethic and a can-do attitude.
Simple company registration process
The process of registering a company in the Falkland Islands is relatively straightforward and can be completed within a few days.
Overall, registering a company in the Falkland Islands can provide businesses with a stable and attractive business environment, access to skilled labor, and a low tax regime.
