Given that Nevis offshore corporations are often overshadowed by their tax benefits, first, the tax exemptions enjoyed by a Nevis LLC corporation will be briefly discussed and then the practicality of Nevis LLC incorporation will be discussed further on.
LLC corporations registered in Nevis are exempt from tax on income, dividends and interest, and are free from exchange controls which apply to local Nevis companies. In Nevis no succession, estate, transfer, gift or capital gains tax are imposed. Owning an offshore bank account in Nevis or establishing and maintaining professional relations with lawyers, financial advisors, accountants and investors are not considered active business operations in Nevis by an LLC, and as such, business conducted with banks or on a professional level is non taxable.
Besides the LLC, other offshore formation services include second citizenship which has become necessary these days due to disturbance in many countries. St. Kitts and Nevis program for second passports processes applications under the Sugar Investment Diversification Fund and the Citizenship-by-Investment program. In addition to LLC formation, orders for offshore accounts, IBC incorporation and second citizenship are welcome.
Nevis LLC corporations are offshore limited liability companies which are similar to the Nevis business corporation (Nevis international business company) but different in some ways.
Besides the tax advantages many people choose to incorporate Nevis LLC corporations over international business companies due to their origins in the United States and consequently the sense of credibility felt when using a structure which is similar to or identical with the U.S. LLC.
Over the years, other factors which made Nevis LLC corporations a favorite offshore company form are their simple structure and incorporation procedure. Nevis LLC corporations are constituted by with an Operation Agreement and the Articles of Organization which are not as lengthy as a typical memorandum and articles but contain sufficient information regarding the legal existence and powers of the LLC. Changes can be made as time goes by and the wording of these documents can be dictated by the members of the Nevis LLC as long as the desired provisions are allowed under the LLC act.
The first step to incorporating a Nevis LLC corporation involves verifying a company name with the registry of companies, signing the necessary documents by the members and issuance of corporate statutes by the authorized agent of the Nevis LLC company in Nevis. A due diligence check will also be carried out on the beneficial owner(s) of the Nevis LLC before incorporation is entirely complete.
The name of a Nevis LLC corporation must end with a word or abbreviation that means limited liability; consequently expressions such as “limited liability company”, “limited company”, “LLC”,”L.L.C.” or “L.C.” must be added as the ending of the name of a Nevis LLC corporation.
Nevis LLC companies can engage in providing a whole range of professional, technical and financial services. However, a Nevis LLC company is prohibited from providing its services to people or companies that are resident in Nevis. If a Nevis LLC wishes to undertake business activities such as insurance, reinsurance or trustee services, an application must be made for the corresponding licensing and approval must be granted before operations as an insurance company commence.
A regular Nevis offshore company issues shares and ownership is in the hands of the shareholders. This is different with a Nevisian LLC corporation which does not issue shares but instead ‘donations’ are made towards building the LLC’s capital. Funds paid out the members as dividends or interest are thus based on the amount that each member would have put into the LLC, which in turn makes taxation on income based on the amount paid out to each member, which is not fixed but dependent on each contribution.
When incorporating a Nevis LLC, there is no standard maximum or minimum capital, which gives the members much more freedom in raising a capital that they are comfortable with. This differs in a Nevis international business company which has an authorized share capital.
Nevis LLC corporations are hybrid offshore companies which have features of a partnership or a sole proprietorship depending on the number of members, and a corporation so that liabilities of its members are restricted to what they each invest in the Nevis LLC corporation. In this way the members are protected from extending losses to their personal assets. As a partnership, a Nevis LLC corporation which operates in Nevis will be entitled to pass-through taxation so that taxes are imposed on the income of the members and not on the company, thereby avoiding double taxation of both members and the company.
Offshore LLC corporations in Nevis can be administered by one or more members who are appointed as managers or by a manager who is in no way affiliated or connected with the LLC. By having just a manager for running the affairs of the Nevis LLC corporation, there is no board of directors who is responsible to the shareholders and required to follow the regular reporting protocol to shareholders when managing the business. Rather, with a Nevis LLC the manager maintains contact with the members and decisions can be taken amongst the members themselves, making the management and decision making process quicker and less complicated than that of a Nevis international business company. Though this has no significant impact on the effectiveness of a Nevis LLC corporation as a Nevis offshore business entity, it all boils down to the requirements of the members and what is more convenient.