Nevis Companies, Nevis Foundations and Nevis Trusts

General Introductory and Offshore Tax Information

Small island, but big in international services is what can be said to describe Nevis as it relates to offshore business entities. Nevis stands as a competitive jurisdiction for offshore company formation and procuring professional offshore services.

Nevis stands out as a tax haven, as every offshore business entity is exempted from taxes within the context of its legal structure. As such, tax exemptions for Nevis Business Corporations (IBC’s), tax exemptions are designed in the context of trading activities, whilst for trusts — with regard to estate and trust property, beneficiaries, and for offshore insurance companies — in the context of premiums. Similarly, the shares, interest accumulated or securities owned by the customers of offshore banks are not subject to taxation. In general, however, Nevis offshore business entities are completely exempt from all forms of direct and indirect taxes and impost which are levied in Nevis. These exemptions include complete relief from capital gains, stamp duty, withholding tax, income and corporate tax, tax on gifts, inheritance, succession and death.

With regard to the Nevis Limited Liability Company (LLC) which is regulated by a comprehensive Limited Liability Ordinance which governs foreign, domestic and offshore Nevis Limited Liability Companies, offshore LLCs are tax exempt on the basis of conducting all trading activities outside of Nevis. An LLC which trades locally with local residents automatically subjects itself to local taxation.

Annual fees are applicable to all Nevis offshore business entities as prescribed by the Minister or their respective legislations. Nevis offshore business entities are also not subject to foreign exchange controls which facilitates dealing in foreign currencies freely.

Establishing an office in Nevis from where an offshore entity conducts its business is not deemed as engaging in trade locally, as long as all transactions are performed solely with non-residents. Offshore bank accounts can be opened and relationships can be established with local lawyers, accountants and other professionals.

Nevis Offshore Business Entities:

• Nevis Multiform Foundation
• Nevis Offshore/International Banks
• Nevis Limited Liability Company
• Nevis Offshore Insurance
• Nevis International Exempt Trusts
• Nevis International Business Company

Nevis Multiform Foundation

Main Features:

• Law — Multiform Foundations Ordinance, 2004
• Multiform foundation refers to the type of or name give to offshore foundations created in Nevis
• A local foundation wishing to function as a multiform foundation must inform the relevant authorities of its intention to operate offshore
• Formation takes places by registering the By-laws and Memorandum of Establishment
• Upon formation, a Nevis offshore foundation is accorded a registration number and issued a certificate of establishment which states the registration date of the foundation’s memorandum and by-laws
• Nevis offshore foundations are given the power to merge or consolidate with another type of corporate structure, continue outside of Nevis or be converted into another entity. Hence, Nevis offshore foundations can be established as a: partnership foundation, a trust foundation, a company foundation, limited liability company foundation or ordinarily as a multiform foundation
• Any structural change to a Nevis offshore foundation does not alter the foundation’s status as a legal entity which is independent and separate from its members
• Has a registered office and a registered agent in Nevis
• Nevis offshore foundations are not required to have any beneficiary
• Name endings of Nevis offshore foundations: General Partnership Foundation: Partnership Foundation; Limited Partnership Foundation: Limited Partnership Foundation; L.P Foundation; LP Foundation; Trust: Trust Foundation or Trust FDN; Unlimited Company Foundation: Company Foundation or Co. Foundation; Limited Company Foundation: Limited Foundation; Ltd. Foundation; Limited Liability Company Foundation: Limited Liability Company Foundation or LLC Foundation; Note: Names may include the abbreviation ‘FDN’, and the word indicating the type of foundation (e.g. partnership) may or may not be bracketed
• All multiform foundations are required to have a management board comprising of at least one person. Such members may be natural (individuals) or juridical persons (corporate entities)
• Supervisory boards are not compulsory for Nevis offshore foundations
• Unless stated otherwise in the foundation’s constitution each member has equal vote
• A secretary must be appointed
• The particulars of a foundation and its members are not publicly available

Nevis Offshore Banking

Main Features:

• Law — Nevis Offshore banking Ordinance, 1996
• Nevis offshore banking ordinance seeks to stimulate Nevis development as an international financial and business center whilst making tax and other incentives available to banks so that offshore banking services can be provided from within Nevis
• Nevis offshore banking business is conducted exclusively offshore and is prohibited from being locally accessed by residents of Nevis
• Offshore banking business involves accepting deposits, active trade of foreign securities, providing international funding, loan advancements and other financial services
• To operate and obtain licensing as a Nevis offshore bank, an entity (qualified foreign bank, eligible company or IBC) must be first be approved by the ECCB (Eastern Caribbean Central Bank)
• Nevis offshore banking applicants will undergo due diligence carried on by the ECCB
• Shares conferring the right to vote must be issued as registered shares
• A company must have an authorized capital of no less than USD2 million to be eligible to apply for a Nevis offshore banking license, with a minimum of USD1 million paid-up in cash; such company must be regulated by the Companies Act
• The Minister’s approval must be obtained for any name change, merger, consolidation, changes to the Memorandum and Articles of Association, transfer of assets, liabilities or shares that the offshore bank may undertake
• Nevis offshore banks are required to file copies of audited accounts, balance sheets and profits and loss to the ECCB within 4 months following the end of the financial year
• The particulars of Nevis offshore banks and their customers are guaranteed protection from public access

Qualified Bank Foreign

• In the case of a foreign bank which meets the minimum capitalization and assets established in Nevis but holds a license for carrying out domestic banking business only in the jurisdiction where it is incorporated and not in Nevis

Nevis Limited Liability Company (LLC)

• Law — The Nevis Limited Liability Company Ordinance, 1995 (amended in 2002)
• All Nevis LLC’s are defined and regulated by the Ordinance
• Nevis offshore LLC’s are distinct in that services cannot be offered or sold to the local public and all active trade must be conducted outside of Nevis. Other features are as follows.
• Formed by filing Articles of Organization and Operating Agreement
• Operating agreements must be endorsed by all member before considered effective
• Minimum of one (1) member
• Under the Ordinance, all members are given the power to mange, except if specific terms and conditions were made in the operating agreements
• Must appoint a registered agent in Nevis
• Duration stipulated in relevant formation document (perpetual or for definite period)
• A corporation may merge with or convert into an LLC
• Several LLCs may consolidate into one major entity
• An LLC formed in a foreign jurisdiction may redomicile into or out of Nevis
• Rights and liabilities are separate and distinct from those of the members
• The name of a Nevis LLC is required to end with any of the following: limited liability company; LC; L.C.; LLC; L.L.C
• Nevis LLC’s may open bank accounts in Nevis, hold meetings in Nevis and establish an office where business can be conducted from within Nevis
• The files of Nevis LLC’s are not publicly accessible Foreign Limited Liability Company
• Refers to an association which unincorporated and organized under the laws of any foreign country or jurisdiction
• Provides members with limited liability Limited Liability Company or Domestic Limited Liability Company
• General term used for any LLC incorporated under the LLC Act depending on whether trade is carried out within or outside of Nevis

Nevis International Insurance

• Law — The Nevis International Insurance Ordinance 2004
• Must first be an IBC, that is, a company registered in accordance with the Nevis Business Corporation Ordinance 1982
• Nevis offshore insurance business is carried on exclusively outside Nevis
• Nevis offshore insurance companies must meet specified capital requirements
• For long-term insurance business only, a minimum paid-up share capital of USD500,000
• For general insurance business only, a minimum paid-up share capital of USD500,000
• For reinsurance only: USD200,000
• Captive insurance only, a minimum paid-up share capital of USD27,000 for single owner captives; USD54,000 for captives with less than 5 owners; USD135,000 for captives with 5 owners or more
• Nevis offshore insurance companies which conduct more than one type of insurance business are required to have the total combined amount for each insurance business in paid-up share capital
• Records and accounts must be accurate and properly maintained at main place of business; copies of such documents must be maintained at the office of the registered agent in Nevis
• All Nevis offshore insurance companies must have a Nevis based registered agent
• Annually audited accounts must be filed with the Registrar in Nevis within no more than 21 days after having approved the accounts and no later than following the end of the financial year to which the accounts refer
• Nevis offshore captive insurance companies are not allowed to accept business from or insure any unaffiliated or non-parent companies without being given the Registrar’s permission
• The files of Nevis offshore insurance companies are not publicly accessible

Nevis International Exempt Trust

Main Features:

• Law — Nevis International Exempt Trust Ordinance, No. 4 of 1994
• Nevis offshore trust property is located offshore for tax purposes
• Nevis offshore trusts are regulated by the law under which they are established, i.e, Nevis Trusts legislation
• To determine the jurisdictions with which a Nevis offshore trust may be linked, the country named by the settlor for administering the offshore trust would be the first determining factor; others would include the status of the trust property, the trustee’s country of residence and the jurisdiction in which the trust is supposed to be settled
• Nevis offshore trusts have a maximum life span (duration) of 100 years. Except if terminated before such time, a Nevis offshore trust automatically terminates upon the one hundredth anniversary
• The rule against perpetuities is not applicable to Nevis offshore trusts
• A Nevis offshore trust may have a protector to look over the trustee and administration of the trust, and who may be empowered by the terms of the trust to remove and appoint trustees. A protector however is not to be regarded as or to fulfill the duties of trustee
• The files of Nevis offshore trusts are not publicly accessible

Protective or Spendthrift Offshore Trusts:

• The interest of the trust’s beneficiary may be subjected to termination at a specific time or on the occurrence of an event, or subjected to a restriction on alienation regarding that beneficiary’s interest
• Trustee required to hold trust estate and administer disbursements as stipulated by the trust deed Offshore Charitable Trusts
• These are established for one or more specific purpose deemed charitable; to include developing education, reducing poverty, diffusing religious beliefs, protecting the environment or human freedom and rights
• Regarded as charitable whether charitable activities occur in a foreign jurisdiction or in Nevis
• May have more than four trustees Non-Charitable trust
• Specifically established for a given and legally acceptable reason which is not deemed charitable

Nevis Business Corporation

Main Features:

• Nevis Business Corporation Ordinance 1984 (Amended in 2002)
• Equivalent of the international business company (IBC or offshore company)
• Required to appoint a treasurer or managing director, president and a secretary
• A Nevis IBC may appoint nominee shareholder for additional privacy
• Meetings can be in any location determined by the company’s members
• Minutes of meetings are recorded and filed
• Keeps complete and accurate accounting records and books but not required to file records and books with Nevisian authorities
• Records and maintains the particulars of registered shareholders and directors
• Directors exercise the right to inspect the books, documents and records of a Nevis IBC
• Nevis IBCs are able to merge or consolidate with another company (foreign or domestic) in accordance with the terms established for such action
• Able to transfer to another jurisdiction

Required to have a locally based registered office at all times

• Nevis IBC’s are limited liability companies
• Nevis IBCs are not allowed to operate in Nevis but are able to hold meetings there, open bank accounts, establish an office so as to manage and administer the company’s affairs
• The particulars of Nevis offshore companies are not publicly accessible