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Fundamental features of Nevis LLC (with insights into its asset protection)

Content Team5 minute read18 Aug 2021

Conveniently nestled just a few hours away from Miami and other financial centers, Nevis is long known for its ideal environment for offshore seekers worldwide. A stable British-Common-Law-based legal system, an open economy, and tons of ideal conditions are what set Nevis apart from other offshore jurisdictions.

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There are two most opt-for types of offshore companies in Nevis: Limited Liability Company and International Business Company. While these two share lots of things in common, strong security and asset protection are what set LLC apart from IBC.

Let’s dive into the most favorable entity type of this beautiful tropical island – Limited Liability Company!

1. Characteristics of a Nevis LLC

There are some really good reasons for the popularity of Nevis LLC.

Fiscally transparent entity. 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.

Example

Example

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.

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.

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Entity structure. 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.

Only one member LLC is allowed. Another cool feature about Nevis LLC is that an LLC with only one member is also allowed to incorporate.

Separate rights and liabilities. Under the Nevis Limited Liability Company Ordinance 2017, a Nevis LLC is a legal entity with separate rights and liabilities from its managers and members.

Separate control and ownership interests. The manager of a Nevis LLC doesn’t need to have any ownership. However, this manager can control all of its operations and assets.

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.

Optional operating agreement. When incorporating a Nevis LLC, the members of this entity can enter into an Operating Agreement. This agreement might contain detailed information in terms of the affairs of the business. Moreover, this agreement is completely optional and cannot be done in writing.

2. Benefits of a Nevis LLC

Let’s find out what benefits a Nevis LLC can offer business entrepreneurs:

2.1 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.

2.2 Tax exemption for income generated outside of St.Kitts and Nevis

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.

2.3 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 offers the ability to shield your assets from lawsuits, agencies, and financial creditors.

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Example

Example

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.

2.4 Minimum maintenance

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.

3. Initial requirements to register

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). As mentioned earlier, the members of a Nevis LLC can enter into an Operating Agreement, and this is completely optional. This Operating agreement can contain any provisions of the following issues: the scope of business, the conduct of its business, the rights or powers of members and managers.

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4. Annual Compliance

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.

5. Conclusion

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.

If you need further information or assistance, please do not hesitate to contact us at service@bbcincorp.com.

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