IN194 - Nevis Multiform Foundations

Nevis is an island situated in the West Indies, obtaining independence as part of St Kitts and Nevis in 1983 and with a Government fully committed to the finance industry.

An Innovative Corporate Vehicle

The Multiform Foundations Ordinance came into force in Nevis on 1st October 2005. It introduced a flexible hybrid type of Foundation into the Nevis international financial service regime. These vehicles are a useful tool for estate planning, financing structures, special investment holding arrangements and charities.

Composition and Flexibility of Nevis Multiform Foundations

The Nevis Multiform Foundation is a legal entity shell within which a subscriber can self-design the form of Foundation, subject to given rules that define the structure.

Each Nevis Foundation has a Multiform, whereby the constitution of the Foundation states how it is to be treated, either as a trust, a company, a partnership or as an ordinary Foundation.

Through the Multiform concept, the constitutional format of the Foundation can be changed during its lifetime, thereby allowing for greater flexibility in its use and application.

Entities Incorporated Outside of Nevis

The Nevis Multiform Foundations Ordinance provides for existing entities to be converted or transformed, continued, consolidated or merged into a Nevis Multiform Foundation. Specific sections are contained within the Nevis Multiform Foundations Ordinance to allow for the transfer of domicile both into and out of Nevis.

An entity incorporated outside of Nevis can be converted into a Nevis Foundation and an existing Nevis entity can similarly be transformed. It is also possible for two or more entities from outside or within Nevis to be merged into a Nevis Multiform Foundation. Such features serve to make the Nevis Multiform Foundations Ordinance an effective piece of legislation for the provision of asset protection vehicles.

The Advantages of Nevis as a Location for the Establishment or Relocation of a Foundation

• Foundations domiciled in Nevis pay no tax in Nevis. Foundations can elect to establish themselves as tax resident and pay 1% corporation tax, if this is beneficial to the overall structure.
  
  1. The application for tax residency is relatively simple. An application fee of US$ 1,000 is payable and an annual renewal fee of US$ 1,000, to retain the tax residency status. The Multiform is then subject to corporation tax at a rate of 1% of taxable profit.
  
  2. A local corporation tax return needs to be completed each year. Audited accounts are not required to be filed, but accounts and the return must be completed by a qualified accountant. Completion of the Nevis tax return can be undertaken by Dixcart Management Nevis Limited.
  
  
• The Nevis Multiform Foundations Ordinance provides a balance between privacy and transparency. As with all Nevis entities, privacy is guaranteed by the St Kitts and Nevis Confidentiality Act 1985. Transparency is achieved as the Foundation can elect to have some or all information available on the public record. This is achieved by completing the appropriate form and supplying the Registrar with the information that is required.
  
  
• The Nevis Multiform Foundations Ordinance provides for a form based system of information collection. This removes ambiguity from the processing of information to and by the Registry, and simultaneously reinforces confidence in the system. All forms are held by the Registered Agent who will advise as to which form is needed in each specific circumstance. Dixcart Management Nevis Limited is licensed to act as a Registered Agent.
  
  
• The Nevis Multiform Foundations Ordinance provides a section on forced heirship. This section makes it clear that any Multiform Foundation governed by the laws of Nevis cannot be made void, voidable, liable to be set aside, or defective in any manner, with reference to the laws of a foreign jurisdiction.
  
  
• Nevis remains a comparatively inexpensive jurisdiction with the redomiciliation of a Foundation costing US$ 1,500 and with an annual renewal fee of US$ 650.

Procedures for the Transfer of Domicile to Nevis

A Certificate of Discontinuance from the overseas jurisdiction will be required as well as a revised Memorandum of Establishment.

Confirmation will be required that the transfer will not hinder, delay or defraud existing shareholders, creditors, claimants or other interested parties. Nevis Law also expressly states that a transfer of domicile will not affect any liabilities or obligations incurred prior to the transfer.

Dixcart can provide all of the documents and detail the procedures required, to complete the necessary filings in Nevis.

Summary

Nevis Multiform Foundations offer many attractive and innovative features. The key benefits of Nevis Multiform Foundations are the balance between privacy and transparency, the ability to elect for tax residency, and their flexibility.

Additional Information

If you would like further information on Nevis Multiform Foundations, please speak to John Terry in our Nevis office or contact us.