Company Formation Nevis
Company Formation Nevis -Offshore Company Formation
International formation of businesses for legal reduction of corporate taxes and limitation of liability
- Tax planning via a network of international tax advisers and attorneys
- Why form a company in a foreign country with a tax accountant specialized in international tax law?
- Basic Considerations regarding the Formation of Companies in „Zero-Tax Havens“ i.e. in countries that have not entered into Double Taxation Agreements with other countries
- Offshore Company Formation: Tax haven rankings
- Examples for the legal reduction of corporate taxes
- DTA permanent establishment concept – Our services and fees
- Parent companies and their subsidiaries in the European Union
- Beware of cheap founders!
Company Formation Nevis -Offshore Company Formation:
|double taxation agreements (DTA)||NO|
|Corporate tax Offshore Companies||NO|
|Corporate tax Onshore Companies||Yes, No for job creation|
|tax free receipt of foreign dividends||Yes|
|EU Parent-Subsidiary Directive applicable||No|
|Holding company privileges||Yes|
|Nominee relationships allowed||Yes|
Services provided by our Law Firm – or our Partner Network:
- Formation of the company, Apostille, upon request certified translation of the formation documents
- Certificate of Incorporation: The certificate of incorporation is an official document that confirms the name of a registered company, as well as the registration number.
- Certificate of Good Standing
- Ranging from Registered Office to maintaining a business office
- Upon request: Nominee Director (attorney acts as a trustee and acts as the Director of the company during the formation phase) and / or Nominee Shareholder (natural person or legal entity – Law firm acts as a trustee in the form of the shareholder of the company)
- Upon request: Permanent Nominee Director (Attorney acts as trustee in the capacity of Director of the company during the entire term of the agreement)
A production site, a site for the exploitation of mineral resources or construction works whose duration is greater than 12 months always constitutes the establishment of a place of business in the country of the company’s seat (for example: Belize, BVI, Cayman Islands, Nevis etc….), independent „of the place of managerial supervision” (analogous to Article 5 OECD_Model Convention). Otherwise the taxable permanent establishment is defined via the „place of managerial supervision”. As a rule this implies, that a person who maintains his ordinary residence in the country of the company’s seat must act as the Director of the company. Either the client or an agent relocates his ordinary residence to the country of the company’s seat and he, himself, acts as the Director of the company or our Law Firm in the country of the company’s seat provides a Nominee Director. Alternative: For example: The Danish client / founder acts as the Director of the company and establishes credibility that he is present in the country of the company’s seat within the course of carrying out the required managerial supervision. Due to the fact that as a rule tax havens (Belize, BVI Cayman Islands, Nevis etc…) do not maintain a public commercial register, the installation of a “Nominee Director in the formation phase” is possible and not necessarily a “permanently present Nominee Director”.
– Upon request: Bearer shares
– Upon request: Liechtenstein Institute as the shareholder of the company
The shareholder or the shareholders are the „Owner” of the company. It can be individuals or companies. Bearer shares, nominee shareholder or for example a Liechtenstein Institute as a shareholder serve to conceal the true ownership relationships. Which constellation is best suited, is dependent upon different prerequisites. We would welcome the opportunity to discuss this with you in a personal setting.
– Opening of an account in the name of the company, incl. Online banking and VisaCard (in the case of bearer shares the opening of an account is often only possible, if the client / founder is not present at the opening of the account)
– Upon request: Investment account in Switzerland (Minimum deposit 10,000 CHF)
– To the extent it is a requirement of domestic law: Provision of proof of the exempt status to the authorities (most tax havens differentiate between offshore and onshore companies. Onshore companies are taxed normally, offshore companies – i.e. companies which transact business outside of the country are not taxed. The Cayman Islands is the exception: Real zero-tax haven)
Federation of Saint Kitts and Nevis
The Federation of Saint Kitts and Nevis (also known as the Federation of Saint Christopher and Nevis),located in the Leeward Islands, is a federal two-island nation in the West Indies. It is the smallest nation in the Americas, in both area and population.
The capital city and headquarters of government for the federated state is on the larger island of Saint Kitts. The smaller state of Nevis lies about 2 miles (3 km) southeast of Saint Kitts, across a shallow channel called “The Narrows”.
Saint Kitts and Nevis are geographically part of the Leeward Islands. To the north-northwest lie the islands of Saint Eustatius, Saba, Saint Barthélemy, and Saint-Martin/Sint Maarten. To the east and northeast are Antigua and Barbuda, and to the southeast is the small uninhabited island of Redonda, and the island of Montserrat, which currently has an active volcano (see Soufrière Hills.)
Saint Kitts and Nevis were amongst the first islands in the Caribbean to be settled by Europeans. Saint Kitts was home to the first British and French colonies in the Caribbean.
Saint Kitts and Nevis is the smallest nation on Earth to ever host a World Cup event; it was one of the host venues of the 2007 Cricket World Cup.
Saint Kitts was named “Liamuiga” by the Kalinago Indians who inhabited the island. This name, roughly translated in English means “fertile land,” a testimony to the island’s rich volcanic soil and high productivity.
Nevis’ pre-Columbian name was “Oualie”, which translates to “land of beautiful waters”, presumably referred to the island’s many freshwater springs and hot volcanic springs.
Christopher Columbus, upon sighting what we now call Nevis in 1498, gave that island the name San Martin (Saint Martin). However, the confusion of numerous, poorly-charted small islands in the Leeward Island chain, meant that the name ended up being accidentally transferred to another island, the one which we now know as the French/Dutch island Saint-Martin/Sint Maarten.
The current name “Nevis” is derived from a Spanish name Nuestra Señora de las Nieves, by a process of abbreviation and anglicization. This Spanish name means Our Lady of the Snows. It is not known who chose this name for the island, but it is a reference to the story of a 4th century Catholic miracle: a snowfall on the Esquiline Hill in Rome. Presumably the white clouds which usually wreathe the top of Nevis Peak reminded someone of the story of a miraculous snowfall in a hot climate. The island of Nevis, upon first British settlement was referred to as “Dulcina”, a name meaning “sweet one”. Its original Spanish name, “Nuestra Señora de las Nieves”, was eventually kept however, though it was soon shortened to “Nevis”.
There is some disagreement over the name which Columbus gave to St. Kitts. For many years it was thought that he named the island San Cristobal, after his patron saint Saint Christopher, the saint of travelling. However, new studies suggest that Columbus named the island Sant Jago (Saint James). The name “San Cristobal” was apparently given by Columbus to the island we now know as Saba, 20 miles northwest. It seems that “San Cristobal” came to be applied to the island of St. Kitts only as the result of a mapping error. No matter the origin of the name, the island was well documented as “San Cristobal” by the 17th century. The first British colonists kept the English translation of this name, and dubbed it “St. Christopher’s island.” In the 17th century Kit, or Kitt, was a common abbreviation for the name Christopher, and so the island was often informally referred to as “Saint Kitt’s island,” which was further shortened to “Saint Kitts.”
Today, the Constitution refers to the nation as both “Saint Kitts and Nevis” and “Saint Christopher and Nevis”, but “Saint Kitts and Nevis” is the form commonly used both at home and abroad.
The islands of Saint Kitts and Nevis are two of the Caribbean’s oldest colonised territories. Saint Kitts became the first British colony in the West Indies in 1624 and then became the first French colony in the Caribbean in 1625, when both nations decided to partition the island.
Five thousand years prior to European arrival, the island was settled by Indian peoples. The latest arrivals, the Kalinago peoples, arrived approximately 3 centuries before the Europeans. The Kalinago allowed the Europeans to colonize Saint Kitts, while earlier attempts to settle other islands were met with immediate destruction of the colonies by the Indians. The Kalinago were eventually wiped out in the great Kalinago Genocide of 1626. Often overlooked in history is the fact that in the 1600s, under Cromwell’s reign, England shipped approximately 25,000 Irish to St. Kitts as slaves to work on the island.
The island of Nevis was colonized in 1628 by British settlers from Saint Kitts. From there, Saint Kitts became the premier base for British and French expansion, as the islands of Antigua, Montserrat, Anguilla and Tortola for the British, and Martinique, the Guadeloupe archipelago and St. Barths for the French were colonized from it.
Although small in size, and separated by only 2 miles (3 km) of water, the two islands were viewed and governed as different states until the late 19th century, when they were forcefully unified along with the island of Anguilla by the British. To this day relations are strained, with Nevis accusing Saint Kitts of neglecting its needs.
Saint Kitts and Nevis, along with Anguilla, became an associated state with full internal autonomy in 1967. Angullians rebelled, and their island was allowed to separate from the others in 1971. St. Kitts and Nevis achieved independence in 1983. It is the newest sovereign nation in the Americas. In August 1998, a vote in Nevis on a referendum to separate from St. Kitts fell short of the two-thirds majority needed. In late September 1998, Hurricane Georges caused approximately $445 million in damages and limited GDP growth for the year.
Alexander Hamilton, the first United States Secretary of the Treasury, was born in Nevis; he spent his childhood there and on St. Croix, then belonging to Denmark, and now one of the United States Virgin Islands.
Private companies may be limited by shares or by guarantee, and are formed under the Companies Act 1996, which has effect in St. Kitts and Nevis. They have the following characteristics:
- A minimum of one shareholder is required and a maximum of 50 are permitted.
- Either registered or bearer shares may be issued. Bearer shares must be deposited with a regulated company in St. Kitts. Nominee shareholder service is available for registered shares. Fractional and Treasury shares are permitted, but shares cannot be sold at a discount except for commission payments. Public offers of shares may not be made.
- A private company must have at least one director. Every company must have a secretary and may have one or more assistant secretaries who, or each of whom, may be an individual or a body corporate.
- Every company must hold an annual general meeting unless all the members of a private company agree in writing not to.
- No annual returns required.
- Certain words are prohibited in company names and the company’s name must end in “Limited,” “corporation” or their abbreviations.
- All companies must have a registered office in the Federation to which communications and notices may be addressed; however a registered agent is not required.
- Every company must keep a register of members.
One or more persons associated for a lawful purpose can form a company by subscribing their names to a Memorandum of Association written in the English language. Incorporators either adopt model Articles or draw up their own Articles of Association. These documents are submitted to the Registrar of Companies along with payment of a 540 East Caribbean dollars ($200) registration fee, after which a certificate is issued. In its Memorandum, a company limited by shares must state the maximum number of shares that the company is authorized to issue and the share value, which can be expressed in any currency but may not be printed on share certificates. A company limited by guarantee must state in its Memorandum the number of members it proposes to register and the amount of the guarantee expressed in any currency.
Since the doctrine of ultra vires has been abolished, a company has the capacity, rights, powers and privileges of an individual. Perpetuity options are a limited life-span (with the number of years specified) or an unlimited life-span.
St. Kitts and Nevis Public Company (St Kitts & Nevis)
A public company is one that has more than 50 members, and is permitted to make public offerings of its shares. It needs three directors, of whom a least two are not employed by the company or related companies. Assistant secretaries can be individuals or corporations.
Members’ meetings can be conducted by electronic means, as long as members can hear each other’s voices. Public companies must hold an annual general meeting while members of private companies can agree to dispense with this. The first general meeting must take place within 18 months after incorporation. Shareholders holding one-tenth of shares and members of a company limited by guarantee who hold one-tenth of voting rights can demand that directors call a general meeting. If directors do not comply, those who requisitioned a meeting (or requisitionists of the group holding one-half of voting rights) can call a meeting themselves. A quorum consists of a least two members present in person or by proxy (1) holding at least one-third of value of issued shares with voting rights; or (2) one-third of voting rights of a company limited by guarantee. Special resolutions require a two-thirds vote.
St. Kitts and Nevis Exempt Private Company (St Kitts & Nevis)
An exempt private company is a private company (as above), which pays no income, capital gains, withholding, or stamp taxes as long as it conducts business exclusively with persons who are not resident in the Federation.
An annual fee of US$200 is payable to the government on filing of the annual return. Although company details are kept on the public register, inspection of the register by persons who are not members or officers of the company is not permitted.
The law makes clear that an exempt company does not lose its tax waivers because of certain activities within the Federation including signing contracts or concluding arrangements for employing residents, purchasing goods and services, and exercising other powers to carry on its business such as holding directors’ and members’ meetings, transacting banking and reinsurance business, and conducting securities transactions or serving as adviser to Federation residents who enjoy exempt status.
St. Kitts and Nevis International Business Company (Nevis)
This type of company is formed under the Nevis Business Corporation Ordinance, 1984 as amended, particularly in 2000, and is suitable for use as a holding company or an investment company. The legislation closely follows Delaware law and is useful to those familiar with this legislation. Characteristics of the IBC are as follows:
- Nothing required to be maintained in the place of incorporation except the Registered Agent’s details.
- Total tax exemption is automatically provided by law for IBC companies.
- No minimum capital required.
- Prior approval required of company name. Some words are sensitive eg Assurance, Bank, Trust etc. Must end ‘Limited’, ‘Corporation’, ‘Incorporated’, ‘Societe Anonymne’ , Gesellschaft mit beschraenkter Haftung or their abbreviations.
- Incorporation takes one or two days.
- Shelf companies are available.
- Capital duty is US$ 200 based on an authorised share capital of 1,000 shares at no par value or on $100,000 of par value shares.
- The minimum number of shareholders is one.
- Bearer shares and shares of no par value must be held by a custodian.
- The minimum number of directors is three, however, if there are fewer than three shareholders then there may also be fewer than three directors.
- A secretary is required who may be a company.
- There is no requirement for a registered office, but there must be a registered agent.
- Information available publicly consists of the articles of incorporation and the name of the registered agent.
- There is no requirement for the production or filing of accounts, and no annual return is required.
- Annual fees amount to US$200.
- IBCs do not have access to St Kitts and Nevis double tax treaties.
St. Kitts and Nevis Limited Partnership (St Kitts & Nevis)
At least one general and one limited partner are needed to form a limited partnership, under the Companies Act, 1996. The law allows a corporation to be a general or limited partner and permits one person to be simultaneously a general as well as a limited partner in the same limited partnership.
Registration is a simple process of drawing up a declaration of formation of the limited partnership and delivering the document to the Registrar of Limited Partnerships accompanied by a $200 registration fee. The declaration, signed only by general partners, requires the name of the firm, term (if any) for which it is to exist (or, if for unlimited duration, a statement to that effect) and the general partner’s names and addresses. The ongoing annual registration fee is US$100.
Contributions of a limited partnership to the firm may be in money (expressed in any currency), other property, and services. A limited partner is not liable for the firm’s debts and obligations unless he participates in the management of the partnership, which is the function of general partners. However limited partners have the right to vote on a number of matters affecting the partnership without losing their limited status. Divestiture of a limited partner’s interest in the partnership requires consent of all members.
A limited partnership’s name must end with the words “limited partnership” or its abbreviation (LP) and may only contain the name of general partners. The firm must maintain an office in the Federation, where a register of limited partners must be kept. Legal proceedings by or against a limited partnership may only identify a general partner as the instigator or target of the action. Accurate accounts reflecting the partnership’s financial position must be kept but auditing is not required. Records can be kept in electronic form. A limited partnership may invite the public to acquire units of the partnership’s assets after a prospectus has been approved by the Minister of Finance.
If general partners drop out of the firm for any reason, the firm must be dissolved unless limited partners elect one or more general partners. The firm can be continued under the existing agreement or a subsequent agreement.
A limited partnership can qualify for tax exemption if it refrains from doing business with Federation residents. Partners of an exempt limited partnership are not subject to income, capital gains, and withholding taxes. Furthermore, no estate, inheritance, succession or gift taxes have to be paid by any person regarding property owned by or securities created or issued by an exempt limited partnership. Also, stamp duties are not levied on any person with regard to transactions in securities issued or create in respect of an exempt limited partnership.
The rules for allowing an exempt limited partnership to carry on some onshore activities are the same as for a corporation (see above). The annual registration fee for an exempt limited partnership is US$200.
St. Kitts and Nevis Limited Liability Company (Nevis)
Nevis LLCs are formed under the Nevis Limited Liability Company Ordinance, 1995, whose features include:
- No corporate tax, income tax, withholding tax, stamp tax, asset tax, exchange controls or other fees or taxes are levied on assets or income originating outside of Nevis;
- Members may be individuals or business entities of any nationality or domicile; there may be a single member;
- No annual or other reports are required;
- Foreign Limited Liability Companies or other business entities may re-domicile to Nevis;
- Limited Liability Companies may have limited life.
- The name of an LLC must end in one of the following: “Limited Liability Company”, “LLC”, “L.L.C.”, “LC” or “L.C.”.
- Shelf companies are available immediately; the formation of a company normally takes 2 to 4 working days.
St. Kitts and Nevis Trusts (St Kitts And Nevis)
The Trusts Act 1996 was a replacement for the 1961 Trustee Ordinance modeled after the 1925 English Trusts Act, and contains modern asset protection provisions. Trusts and their beneficiaries receive the same tax waivers as companies, with the similar proviso that all transactions must be confined to non-residents for the trust to enjoy exempt status. Trusts may have a protector but, with the exception of unit, spendthrift and charitable trusts, the protector needs acceptable professional qualifications. Both the settlor and trustees can be beneficiaries of a trust.
St Kitts and Nevis trusts are exempt from income, withholding, capital gains and stamp taxes as long as all transactions are confined to non-residents, and subject to a statutory declaration of exempt status accompanied by an annual registration fee of US$200.
Section XV of the Act makes it clear that beneficiaries do not lose their exemption if trustees are active in the Federation owning or leasing property for an office or residences for beneficiaries, holding meetings, conducting banking, signing employment contracts, and arranging for goods and services.
Every trust must maintain an office in the Federation for service of papers. At least two trustees must be appointed, unless one trustee is a corporation or only one trustee was originally appointed under previous legislation. One trustee must either be a Federation resident or carry on business from an office within the Federation. Trustees’ duties include registering the trust with the Registrar of Trusts (who may also be the Registrar of Companies).
Trusts do not have to be audited, unless trust terms call for this. The annual statement filed by trustees need not include any financial information. Strict confidentiality rules for trustees prevail. In response to a written request, trustees may in a “reasonable time” provide information about the trust’s financial situation and management to the Eastern Caribbean Supreme Court, Government inspectors, and, subject to the terms of the trust, the settlor, protector, a beneficiary, and a charitable beneficiary.
Every non-charitable trust is restricted to a 100-year life span. No restriction is imposed on charitable trusts. Trust terms should specify how long the trust might accumulate income.
Asset protection provisions, covered in Part V of the Act dealing with a settlor’s rights and responsibilities and applicable to all trust, shield the settlor against forced heirship, compulsory division of matrimonial property, and creditors’ suits. A creditor who wants to bring a court action against trust property must first purchase a 25,000 East Caribbean dollars ($9,250) bond from a Federation financial institution and deposit it with the Minister of Finance to cover all costs should the action prove unsuccessful.
The proper law of the trust is the law of the jurisdiction expressed by the trust’s terms as the proper law; or, failing that, implied from the trust’s terms; or failing either, the jurisdiction with which the trust at the time it was created had the closest connection.
These trusts are formed under the Nevis International Exempt Trust Ordinance of 1994, as amended to September 2000. The Trust Ordinance includes special provisions to enhance the use of Nevis as a preferred jurisdiction for the establishment of Asset Protection Trusts.
Highlights of the Trust Ordinance include:
- Exemption from all forms of Nevis taxation and exchange controls provided that transactions take place only with non-residents;
- The trustee may be either a trust company licensed to do business in Nevis or a company incorporated under the Corporation Ordinance;
- The proper law may be the law of Nevis or the law of another jurisdiction;
- The rule against perpetuities does not apply;
- Forced heirship rules are specifically excluded;
- Spendthrift and charitable trusts are permitted;
- There is a US$25,000 bond requirement prior to the commencement of an action or proceeding against trust property;
- There is no registration requirement other than for the Trust’s name, name of Trustee and the registered office address;
- Settlor and Beneficiary must be non-residents and may be the same person;
- One trustee must be a Nevis offshore company or a trust licensed company;
- Protectors are allowed for and may be the same person as the Settlor and Beneficiary of the Trust;
- An IET is valid and enforceable notwithstanding that it may be invalid according to the law of the Settlor’s domicile or residence or place of current incorporation;
- The Trust is not considered fraudulent if settled up to 2 years after the date of the creditor’s cause of action;
- The creditor must prove the intent of the debtor to defraud with “clear and convincing” evidence;
- The Statute of Queen Elizabeth is excluded.
St. Kitts and Nevis Multiform Foundations Ordinance (Nevis)
The Multiform Foundations Ordinance came into force on October 1st 2005. It introduces a flexible hybrid multiform of foundation into the Nevis international financial services regime.
The Nevis Multiform Foundation is a legal entity shell into which a subscriber can self-design the form of the Foundation, subject to given rules that define it. Therefore, each Nevis Foundation will have a stated multiform, meaning that the constitution of the foundation will state how it is to be treated: whether as a trust, a company, a partnership or an ordinary foundation.
Through the multiform concept the stated identity of the Foundation can be changed during its lifetime, thus allowing for greater flexibility in its use and application.
The Ordinance provides for other entities to be converted or transformed, continued or consolidated or merged into a Nevis Multiform Foundation. Therefore, an entity incorporated outside of Nevis can be transformed into a Nevis Foundation; an existing Nevis entity can be converted into a Nevis Foundation; and any two or more entities from outside or within Nevis can merge into a Nevis Multiform Foundation.
The Ordinance provides for a balance between privacy and transparency and also provides for healthy corporate governance. In light of this, the Ordinance anticipates that Nevis Multiform Foundations will be used for estate planning, charity, financing and special investment holding arrangements.
The Ordinance has a section on forced heirship, making it clear that any Multiform Foundation governed by the laws of Nevis cannot be made void, voidable or liable to be set aside, or defective in any manner by reference to the law of a foreign jurisdiction.
The Ordinance provides that a Foundation can become tax resident in Nevis, subject to an annual fee of $1,000. The Multiform will then be subject to Corporation Tax at a rate of 1% of net income (net profits) with a minimum tax payable of US$1,000 per annum. This is particularly important for some jurisdictions, and again enhances the flexibility of these entities.
Whether under Federation legislation or Nevisvian legislation, offshore entities in St Kitts and Nevis are exempt from Corporate Income Tax, Withholding Tax and Capital Gains Tax, as long as they carry on business only with non-residents of the Federation. However, the various laws make it clear that an exempt entity does not lose its tax waivers because of certain activities within the Federation including signing contracts or concluding arrangements for employing residents, purchasing goods and services, and exercising other powers to carry on its business such as holding directors’ and members’ meetings, transacting banking and reinsurance business, and conducting securities transactions or serving as adviser to Federation residents who enjoy exempt status.
At the time of writing, St Kitts and Nevis companies paid the following fees:
An Exempt Private Company (St Kitts and Nevis) pays an annual fee of US$200 to the government on filing of the annual return.
An International Business Company (Nevis) pays an annual fee of US$200 to the government (no annual return is required). Capital duty is US$200 based on an authorised share capital of 1,000 shares at no par value or on $100,000 of par value shares.
An Exempt Limited Partnership (St Kitts and Nevis) pays an annual registration fee of US$200 to the government.
A Limited Liability Company (Nevis) pays an annual registration fee of US$220 to the government.
A Trust (St Kitts and Nevis) pays an annual fee of US$200 to the government along with a statutory declaration of exempt status.
An International Exempt Trust (Nevis) pays an annual registration fee of US$220 to the government.
St. Kitts and Nevis Taxation of Foreign Employees of Offshore Operations
There is no personal income tax in St Kitts and Nevis but foreign nationals working in the country are required to obtain a work permit for which, at the time of writing, there is an annual charge of 1,500 East Caribbean dollars ($635). Persons or companies remitting payments to persons or companies outside of the nation must deduct a 10% withholding tax on profits, administration or management and head office expenses, technical service fees, accounting and audit expenses, royalties, non-life insurance premiums and rents.
There is no capital gains tax other than on short-term investments, but the St. Kitts and Nevis house tax of 5%, payable in two installments a year, applies on annual rental value of a property, with a 25% rebate on residential property. The controversial Alien Landowners Tax places a 14% levy paid by buyers and 4% by sellers on residences. Although it also applies to commercial land, it is subject to negotiations on a case-by-case basis. A 1% sales tax on gross sales, a hotel tax of 5% and a 2% tax on foreign currency transfers are in effect.