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Formation of an International Business Corporation in Nevis
NEVIS AS A FINANCIAL CENTRE
Nevis is a modern, forward-thinking financial centre located within the Eastern Caribbean. It has a unique history of legislative and fiscal independence and is at the forefront in providing practical solutions to an increasingly mobile and international client base.
Nevis has developed a number of attractive options, over the years, to meet corporate and individual needs, allowing clients to organise their affairs in an efficient and confidential manner.
IMPORTANT RECENT DEVELOPMENTS AND THE FUTURE
In late 2018, the Government of Nevis amended its International Business Corporation (IBC) and Limited Liability Corporation (LLC) Acts, to remove the exemption of these companies from Federal Corporate Tax.
Since, 1st January 2019, Nevis IBC’s and LLC’s have therefore been subject to Federal Corporate Tax. This decision was taken following consultation and at the direct request of the European Union and OECD, to assist with tax harmonisation.
Under the amendments Nevis IBCs and/or LLCs, incorporated prior to the start of 2019 and not directly operating a business in Nevis, were granted a period of adjustment. These companies retain their tax exempt status until June 2021.
Dixcart has a limited number of available ‘shelf’ companies that were incorporated in December 2018, and which offer tax exemption under the ‘Grandfathering Act’.
- The Government of Nevis are exploring ways in which Nevis IBC’s and LLC’s can operate tax efficiently, in the future, as long as they do not undertake business within the Federation of Nevis.
Further announcements are expected in the third quarter of 2019.
WHAT ARE THE OPPORTUNITIES IN NEVIS?
Nevis continues to remain an important jurisdiction in terms of privacy.
- Nevis does not operate Government or Public Corporate Registers and companies can be established and managed efficiently, using an experienced Corporate Service Provider, such as Dixcart.
In addition, individuals continue to enjoy exemption from income tax and from capital gains tax in Nevis.
Many opportunities continue to exist to use Nevis structures in a tax neutral and confidential manner:
Private Trustee Company (PTC)
Nevis remains a popular jurisdiction for PTCs, for both Nevis International Exempt Trusts, and as trustees of Trusts created under the laws of other jurisdictions.
Officer Companies and Nominee
The use of Nevis companies to act as ‘Corporate Officers’ or as a ‘Nominee’ is possible, and as these have ‘non-income status’, they are not adversely affected by the January 2019 tax changes.
Limited Liability Companies as Unlimited Partners
Nevis LLC’s are well placed to act as the unlimited partner in a Limited Partnership. They do not suffer significant tax leakage, even in light of the recent tax changes, since the profit participation of the unlimited partner can be set at a lower level than that of the limited partner.
Nevis Multi-Form Foundations (MFF’s)
Nevis MFF’s are very flexible and can take on the identity of a Foundation/a Trust/a Company or a Partnership.
They have their own legal personality, are tax exempt and can operate with a high level of commerciality. In addition, there are special asset protection rules, within the relevant Ordinance, which deter frivolous law suits.
Foreign and/or domestic corporations and/or Trusts can be converted to a Foundation and the ‘form’ of the Foundation can be changed to another ‘form’, so that, for example, a Trust Foundation can be converted to a Partnership Foundation.
Nevis Foundations and Trusts can be used to own Nevis IBC’s and/or LLC’s. Nevis MFF’s and Trusts are both exempt from corporate tax.
There are many uses for Nevis Foundations, including; support for education, succession planning, asset protection, and the provision of confidentiality to help protect the security of the junior members of a family.
Using Nevis Family Foundations to Protect the Identity of Vulnerable Members of a Family – Whilst they Study Abroad
Confidentiality is most relevant when a family lives in a country where the protection of their personal identity is very important, relative to safety and security.
A Nevis Educational Foundation can be put in place for the purpose of providing for the education of a junior member of a family studying abroad for a specific period of time.
The Nevis Foundation can maintain a bank account and a confidential credit card account in a selection of currencies. Education and accommodation expenses can be paid by the Foundation, directly from its bank account. Daily living expenses can be met using the confidential credit card.
In order to maintain confidentiality, the card does not feature the holder’s name, nor the name of the Foundation, nor the bank’s name. The family can therefore considerably reduce the public profile that the young person will be exposed to.
The family must provide relevant background due diligence, including detailed source of funds and wealth information, to the Registered Agent, the bank and to the credit card company, all of whom will be fully compliant with CRS and FATCA.
Nevis International Exempt Trusts
The jurisdiction of Nevis remains an attractive jurisdiction for the location of a family trust.
- ‘Forced heirship’ is not recognised.
- Rules against perpetuity do not apply, unless otherwise provided for in the trust document. A Nevis Trust can therefore have unlimited duration.
- Foreign judgements are not enforceable and need to be re-instigated in Nevis, if applicable.
- If desired, a number of separate Trusts may be combined into one Trust or a single Trust can be divided into a number of Trusts.
Citizenship by Investment (CBI)
Dixcart Nevis is an experienced provider of CBI services, helping many families successfully through this process and assisting them to gain St Kitts & Nevis Citizenship.
There are three routes to Citizenship, two relate to Real Estate, and a third to a ‘one off’ donation. Depending on the nationality of the applicant, the quality and detail of the application information, supporting documentation, and the programme level chosen (‘standard’ or ‘fast track’), approval can be achieved in 45 – 90 days.
There are no personal income or capital taxes in St Kitts & Nevis for individuals resident on the island.
If you require further information in relation to Nevis, the structures that are available and the potential benefits, including confidentiality, please contact Graham Sutcliffe: email@example.com.
Updated: June 2019