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Cook Islands

Freelancing and Independent Contracting

Understand the distinctions and regulations for freelancers in Cook Islands

Difference employees and contractors

In the Cook Islands, the legal system differentiates between employees and independent contractors based on the level of control exerted by the engaging party (business) over the worker.


Employees are under significant control by the business. This includes setting work hours and schedules, dictating the manner and method of work completion, providing equipment and workspace, and integrating the worker into the business structure.

On the other hand, independent contractors experience minimal control from the business. They set their own working hours and methods, use their own tools and equipment, and maintain a degree of independence from the business structure.


Employees are typically integrated into the business, working alongside other employees and following company policies. Independent contractors, however, work independently, with minimal integration into the business structure. They may even work for multiple clients simultaneously.

Financial Independence

Employees receive wages or salaries at regular intervals, with deductions for taxes and social security contributions. The business withholds these contributions. Independent contractors, on the other hand, invoice for their services and are responsible for their own tax and social security contributions.

These are just the key indicators. The Cook Islands Courts may consider other factors in borderline cases, such as the existence of written contracts and the level of financial risk undertaken by the worker.

Independent contracting

Independent contracting offers flexibility for both businesses and skilled individuals in the Cook Islands. It involves a deeper understanding of the legalities, structures, and common industries.

Contract Structures

Independent contractor agreements should be clearly defined to avoid misunderstandings. While not mandatory by law, a well-drafted contract protects both parties. Here are key elements to consider:

  • Scope of Work: Clearly outline the services to be provided, deliverables, and timelines.
  • Payment Terms: Specify the fee structure (fixed fee, hourly rate), payment schedule, and invoicing process.
  • Confidentiality: Include clauses protecting sensitive business information.
  • Termination: Outline the conditions and notice period for terminating the agreement.

Negotiation Practices

Negotiation is a crucial aspect of independent contracting in the Cook Islands. Here are some pointers:

  • Market Rates: Research industry standards for similar services to ensure your rate is competitive.
  • Scope Creep: Clearly define the project scope to avoid additional work outside the agreed-upon terms.
  • Payment Terms: Negotiate favorable payment terms, including upfront deposits or milestone payments for larger projects.

Common Industries for Independent Contracting

Several industries in the Cook Islands commonly utilize independent contractors:

  • Information Technology (IT): Web developers, programmers, and IT consultants often work as independent contractors.
  • Creative Industries: Graphic designers, writers, photographers, and videographers frequently operate as independent contractors.
  • Construction: Specialized tradespeople like electricians, plumbers, and carpenters may work on a per-project basis.
  • Tourism: Tour guides, freelance translators, and event planners often find work as independent contractors.

This list is not exhaustive. Many other industries can benefit from skilled independent contractors.

Intellectual property rights

Freelancers and independent contractors in the Cook Islands significantly contribute to the creative and innovative landscape. However, the ownership of intellectual property (IP) created during their work requires a clear understanding to avoid disputes.

Default Ownership

The Cook Islands adheres to the principle of "authorship" for original creations. This means:

  • In the absence of a written agreement, the freelancer/contractor will be the default owner of the IP they create, including:
    • Copyrights for written content, designs, and software code.
    • Trademarks for logos and brand names developed for the client.

Contractual Agreements

Freelancers and independent contractors can retain ownership of their IP or transfer rights to the client through a well-defined contract. Here's what to consider:

  • Explicit Clauses: Include clear clauses specifying ownership of any IP created during the project.
  • Work Made for Hire: If the client desires ownership, a clause stating the work as "work made for hire" can be included. This transfers ownership to the client upon creation.
  • Licenses: The contract can grant the client a license to use the IP for a specific purpose or duration.

Important Note: Vague or silent contracts on IP ownership default to the freelancer/contractor retaining ownership.

Protecting Your IP

Freelancers and independent contractors can take proactive steps to safeguard their IP:

  • Copyright Registration: Registering copyrights with the Cook Islands Intellectual Property Office (CIPO) provides a public record of ownership and strengthens legal claims.
  • Trademark Registration: Consider registering trademarks for logos or brand names used in your freelance work.
  • Maintain Records: Document the creation process (e.g., timestamps, drafts) to substantiate your claim to ownership if needed.

Tax and insurance

Freelancing and independent contracting in the Cook Islands come with certain tax responsibilities and the need for securing proper insurance.

Tax Obligations

Freelancers and independent contractors in the Cook Islands are responsible for filing their own tax returns and paying taxes on their income. Here's a breakdown:

  • Income Tax: Income from freelance work is subject to income tax under the Income Tax Act 1987. Tax rates are progressive, meaning they increase as your income rises.
  • Social Security Contributions: While not mandatory for all independent contractors, freelancers may choose to contribute to the Cook Islands Social Security scheme. This provides benefits like pensions upon retirement.

Maintaining accurate records of income and expenses is essential for freelancers and independent contractors. These records are crucial for calculating taxable income and filing tax returns.

Insurance Options

Securing appropriate insurance can provide financial security for freelancers and independent contractors in the Cook Islands. Here are some options to consider:

  • Public Liability Insurance: Protects against legal claims arising from property damage or injuries caused to third parties during your work.
  • Professional Indemnity Insurance: Covers financial losses clients may suffer due to negligence or errors in your services.
  • Income Protection Insurance: Provides financial support if you're unable to work due to illness or injury.
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