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Guide to Nevis LLC

Nevis is the smaller of the two islands forming the Caribbean Federation of St Kitts and Nevis, a country famous for being the first to launch an economic citizenship program. It also is a famous assets protection hub thanks in large part to its Nevis Limited Liability Company Ordinance law. In this article, I review the Nevis LLC and explain how to register one.

Nevis LLC

Review

You have probably noticed that this article is about the Nevis LLC, not the St Kitts and Nevis LLC. The reason why is that the islands of St Kitts and Nevis are essentially two separate jurisdictions as far as business law is concerned, in a way that is not dissimilar of England and Scotland. An entity registered on the island of Nevis is governed by the laws of Nevis, not St Kitts.

A Nevis LLC is a transparent, pass-through entity. This means that any profits generated through it are taxed as if they had been generated directly by the owners (referred to as members). Below is a short example of how this works in practice.

Bobby is a tax resident of Australia and the sole member of Brown Gold LLC, a Nevis LLC. Last year, Brown Gold LLC generated a profit of one million Australian dollars. As a result, Bobby had to pay taxes on that one million dollars in Australia along with his other income. Neither Brown Gold LLC nor Bobby had to pay any taxes in Nevis.

In the example above, Bobby did not benefit much from having a Nevis LLC, at least from a tax perspective. If he had been the tax resident of a tax haven, however, he could have avoided having to pay tax on the profits generated via his Nevis LLC. If he had been the tax resident of a territorial taxation country, he might have avoided having to pay taxes on the profits generated via his LLC but this would have largely depended on the nature of those profits (their source) and how they were received.

So why did Bobby bother registering a Nevis LLC? Because he was told that it offers unparalleled assets protection and privacy benefits.

He was told wrong, however, as while it is true that Nevis did offer such benefits in the past, times have changed and most benefits do not apply anymore. For example, a US court ruled in 2015 that a member’s interest in an LLC is located where the member resides, not where the LLC is registered. As a result, the court was able to force the dissolution of a Nevis LLC owned by a Florida resident and the distribution of its assets despite that being against Nevis law (Wells Fargo vs Barber). The OECD’s Common Reporting Standard (CRS) and the Tax Information Exchange Agreements that St Kitts and Nevis has signed are other examples.

The war against tax evasion and money laundering has also resulted in most banks and financial institutions being very wary of opening accounts for entities registered in jurisdictions like Nevis. In many cases, the only option these entities have is to bank with the smaller, dodgy Caribbean banks (or with EMIs, Wise for example).

All of the above, combined with the fact that you can register an entity with the same tax and privacy characteristics but in a high reputation country like the United States, means that there are absolutely no reasons to register in Nevis. Depending on where you live, doing so could even be akin to painting a target on your forehead and inviting your home country’s tax agency to pull the trigger on an audit.

Registration

If the above has not scared you and you still want to register a Nevis LLC, you will need to hire the services of a registered agent as Nevis law does not allow for self-registration. Your registered agent will guide you through the registration process, prepare all necessary company documents and make sure your LLC fully complies with local law. The government charges a 250 USD registration fee and you will need to add the registered agent’s fee on top of that. The same is also true for the annual fee (250 USD + registered agent fee).

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