Conveniently nestled just a few hours away from Miami and other major financial centers, Nevis is long known for its ideal environment for offshore seekers worldwide. Nevis Limited Liability Company (LLC) has become familiar to overseas entrepreneurs when it comes to company incorporation. Besides tax benefits, simple registration, asset protection is one key factor for its popularity.
Let’s dive deep into Nevis LLC – the most favorable entity type of this beautiful tropical island!
1. What make Nevis LLC attractive to foreign business owners?
Nevis LLC has typical characteristics of an LLC such as separate legal entity, pass-through tax status. Still, it has distinct features. There are some really good reasons why you should opt for this business entity.
1.1. Tax benefits
The first and foremost feature of Nevis LLC is that it is a transparent and flow-through entity. What it means is that the income generated by the LLC is taxed directly to its members.
Anne is a tax resident of the UK and the sole member of Xavier LLC in Nevis. In the last year, Xavier LLC managed to earn two million pounds in profit.
As it happened, Anne had to pay taxes on that income as well as her other streams of income in the UK. Xavier LLC and Anne don’t have to pay any tax in Nevis.
Tax exemption for income generated outside of St.Kitts and Nevis
In Nevis, your company and you are exempted from tax on income, profits, dividends, interests, and capital gains. From a tax perspective, incorporating a Nevis LLC brings no benefits in terms of tax unless you are the tax resident of a tax incentives jurisdiction.
Here comes the first perk of a Nevis LLC: all income that is generated outside of St.Kitts and Nevis’s borders is exempted from tax.
In other words, a Nevis LLC doesn’t oblige to pay any tax on income, profits, dividends, royalties, capital gains, duties, and gifts.
Want to know more about how your Nevis LLC will benefit the tax regime of the country? Discover Nevis “Tax Haven” and Top Concerning Issues For Offshore Businesses
1.2. Flexible structure and management
There is no limit to the number of member involved a Nevis LLC. You can start the business with one or multiple members.
It is no exaggeration to say that Nevis LLC has a quite simple management structure. In this type of entity, there is no shareholder, just members and managers. And that member can also be the sole manager of the LLC. The manager of a Nevis LLC doesn’t need to have any ownership. However, this manager can control all of its operations and assets.
In addition, members and managers can be individuals or corporations and of any nationalities. According to the Nevis Limited Liability Company Ordinance 2017, members and managers of a Nevis LLC can be both individuals or corporations. And the nationalities don’t matter at all.
1.3. Maximized privacy
This might be the main reason why people opt for a Nevis LLC – its maximized privacy.
As for privacy purposes, a Nevis LLC is allowed to appoint a nominee member. Moreover, there are no public records about the company and its members at all. To be more specific, names and other information of the member(s) are not filed at the public registry.
To add more privacy layer to your company, you can also use nominee services to keep the identity of real owners at the top secrecy.
1.4. Asset Protection
We’re not joking around when we say that most investors opt for a Nevis LLC because of its asset protection ability.
As per the Nevis Limited Liability Company Ordinance 2017, a Nevis LLC is a legal entity with separate rights and liabilities from its managers and members. This offers the ability to shield your assets from the company’s lawsuits, agencies and financial creditors.
Let’s say, Eric owns a Nevis LLC for more than a year now. Unfortunately, he has been found indebted in another country and his creditors are after his assets. This is when the Charging Order Protection of Nevis comes in handy. In no circumstances do the creditors have the authority to liquidate or repossess Eric’s company.
The only thing the creditors are allowed to do if they win a lawsuit (which is very unlikely to happen) is to collect future distributions in a three-year period.
And not to mention the $100,000 dollars deposit in advance (however, the High Court has the authority to increase or vary the bond) in order to file a lawsuit and the lawyers demand payment without caring about the results.
1.5. Minimal maintenance requirements
If the above perks are not enough to put you in awe, here comes another one. A Nevis LLC is known for its low-to-none corporate compliance. You don’t need to file any mandatory audits, company records at all.
But keep in mind that a Nevis LLC should maintain a register of charge at its registered office.
2. How to register a Nevis LLC?
With all the attractive characteristics and perks of a Nevis LLC, it is hard to not take an interest in it. Let’s take a closer look at the requirements to register for one.
Company Name. The name of your Nevis LLC has to be in Latin alphabets and ended with Limited Liability Company or Limited Company. Abbreviations such as LLC, L.L.C, or L.C are also acceptable. The company name must not be the same as existing companies’ names in Nevis.
Registered office and registered agent. A Nevis LLC must always have a registered agent inside Nevis. And the address of that registered agent is also the address of the registered office of a Nevis company.
Members and managers. The term “members” in a Nevis LLC means the owners of the company. The company only has to have one member to be eligible to incorporate one. And that member can also be the manager of the company. More interestingly, the manager of a Nevis LLC can be both a person or a business entity.
Articles of organization. In order to form a Nevis LLC, Articles of Organization must be filed then submitted to the Registrar of Companies. This article must also include the information of a written Operating Agreement (if any).
Operating agreement (optional). When incorporating a Nevis LLC, the members of this entity can enter into an Operating Agreement. This agreement might contain detailed information of the following issues: the scope of business, the conduct of its business, the rights or powers of members and managers. Moreover, this agreement is completely optional and cannot be done in writing.
Annual compliance requirements. Even though Nevis companies have minimum maintenance requirements, there are some rules that need to be obliged. A Nevis LLC is required to keep all of its books and records for a minimum period of 5 years from the date they are prepared. The books and records should include information about contracts and invoices.
Moreover, a Nevis LLC needs to be renewed each year in order to stay active. The annual registration fee of a Nevis LLC is USD 250 which is paid to the Office of the Registrar of Companies through its registered agent.
3. Nevis LLC and Nevis IBC: How to decide?
Nevis LLC and Nevis International Business Corporation (IBC) are the major business entities registered within the border. Take a glance of the differences between these entities to know which one is your preferred option.
Business structures. Unlike Nevis LLC where managers and directors are the owners and manages the company, a Nevis IBC has shareholders as the owners. The shareholders are responsible for making major decisions without getting involved in daily business operations. The ownership involvement and receivable profits will depend on the number of owned shares.
Fund raising possibility. Both business entities have the possibility to raise capital funding from outside investors. Nonetheless, venture capitalists prefer Nevis IBC structure. This is because the higher degree of anonymity and the flexibility of ownership.
Taxation. Nevis IBC must submit the corporate tax for income deprived within the border. In another hand, profits of Nevis LLC will be taxed as personal income tax of the owners.
Registration process. Due to the more complex structure, the registration of Nevis IBC is more complicated and lengthy than Nevis LLC. The associated costs are also higher for the IBC.
Ongoing obligations. Nevis IBC has more annual compliance duties compared to Nevis LLC. Such duties can be annual shareholder meeting and tax reporting requirements.
In general, forming a Nevis IBC or LLC depends on your business needs. You must determine the desired structure, business taxation, budget, possibility to get funds of the company. Then choose the entity that maximizes the business outcomes.
It is undeniable that Nevis LLC offers a wide range of perks that most investors are longing for: from a tax-free environment to the minimum compliance requirements. And let’s not forget the excellent asset protection that this type of entity brings.
Nevis is one the popular for LLC formation. But if you still don’t think you can land your LLC in the country, do consider other jurisdictions. Foreign entrepreneurs also prefer starting their offshore businesses with Belize LLC or Cayman Islands LLC .
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
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