Incorporating an offshore company in Nevis – benefits for international investors
In which jurisdiction is it better to open an offshore company? Experienced investment specialists recommend the location on the island of Nevis (Federation of St. Kitts and Nevis). Why should you choose this particular state? There are other offshore zones in the world, what is the advantage of the Caribbean region? The advantage of St. Kitts and Nevis for investors is that it is a high-quality jurisdiction with a good reputation, which means:
- It is a reliable protection of property, personal and corporate data.
- It is an opportunity to reduce the tax burden.
- It is an opportunity to open corporate bank accounts not only in Nevis, but also in other countries.
- It is the ability to accept payments from customers around the world and withdraw money.
- These jurisdictions are not criticized by the international community.
Not in all traditional offshore zones residents receive such generous preferences. The point is that it is possible to register a legal entity in any country in the world. But what will be the consequences for the owner of the company? Investors are tempted by the opportunity to open an offshore zone cheaply, they are enticed by the prospects of tax-free havens, and then they face the problems of doing business in another country, their bank accounts are frozen and it is impossible to repatriate assets. It turns out that not all offshore jurisdictions are equally useful and safe. Therefore, opening a business in Nevis is a good idea for those investors who do not want to take risks. Now let’s take a closer look at the benefits of incorporation in Nevis.
- Ability to use the international banking system
Foreign citizens can also become clients of banks in Nevis; it is not necessary to be a tax resident. There are international banks on the island, where you can open an account not only in local currency, but also in popular foreign currencies. All institutions offer online banking services. The following types of accounts can be opened: current, savings, trading, corporate.
Importantly, owners of offshore companies in Nevis can also become clients of other reputable foreign banks. In developed countries, attention is paid to where exactly the business of a potential depositor is registered. The reputation of Nevis does not cause doubts among bankers, and potential clients will not have to submit a lot of papers and go through long interviews to prove their trustworthiness.
- Maximum protection of the investor’s assets and financial interests
Nevis law is structured to protect the assets of an LLC or trust company owner from lawsuits, creditor claims, or other financial claims. Investors can have peace of mind about their assets, and here’s why:
- For the local court system, decisions of other foreign courts in favor of the claimant are disregarded. The claimant must start a new lawsuit in the Nevis jurisdiction from the beginning.
- Class actions are not accepted, each case is considered only individually. Moreover, the claimant will have to appear in person on the island, that is, to overcome a long journey.
- The plaintiff must pay a fairly large insurance premium ($100 thousand) to file a statement of claim in the local court.
- A foreign plaintiff can not bring his own lawyer, his interests in the judicial institutions of Nevis can be represented only by local lawyers.
- The evidentiary basis must be undisputed and beyond the judge’s doubt, to prove facts or objection, you must prepare as if it were a criminal proceeding.
- The limitation period to challenge the transfer of assets to a Nevis company is no more than 2 years from the transfer of assets to the island. After this period expires, the local court dismisses the applications by default.
- If the plaintiff still manages to win the lawsuit, the consequences will not be so critical. In most cases, only the defendant’s income and dividends (money) can be claimed, but the company’s assets remain out of reach.
- If the company has several co-owners, then in case of a negative scenario (losing the case) only the part of the property that belongs to the injured party is at risk of alienation. The shares of the other owners of the company are untouchable.
- The court order is valid for only 3 years and cannot be extended. If the plaintiff does not have time during this time to make material claims against the losing party, it will not be possible to defend its interests.
It should be clarified that all these opportunities are real only if you open a company in Nevis and transfer assets to the balance sheet in advance – before creditors or other persons may have claims. If a lawsuit against the owner of the property has already started in any jurisdiction, there will be no guarantees of asset protection.
- Reducing the tax burden on business
Contrary to stereotypes, registering an offshore company is not a complete tax avoidance, but just an opportunity to reduce tax rates several times. Nevis has a good reputation in the international market because this island is not a tax haven. The realities of the current world are such that it is better to pay a little bit of tax levies than to pay none at all. In return, residents get an attractive and comfortable environment to do business in the new jurisdiction.
Here are some features of the St. Kitts and Nevis tax system:
- There are no capital gains, gift, inheritance, or individual income taxes for individuals.
- Tax residents do not pay taxes on dividends and royalties, for non-residents the rate is 15% if these incomes are received on the islands.
- There is a property tax on purchase (stamp duty and land license), but there is no capital gains tax on the subsequent sale of the property.
- Resident companies pay corporate income tax on a global basis (33%), non-residents are only subject to tax if they received income from local sources.
In summary, a legal entity in Nevis can be either tax resident or non-resident, fiscal policy differs for different statuses. The founder of the company can choose which status is more favorable for him at the moment. An offshore company is considered resident if the board of directors holds meetings in Nevis.
- Data on the beneficiaries of the company is hidden from public access
- The founders, directors and shareholders of an offshore company in Nevis can be assured that information about their identities and ownership of the business is kept exclusively with the registrar and can only be disclosed to third parties in exceptional cases.
- Financial records and audit reports can be kept not only on the island but also in other countries, in any convenient form (paper, digital copies). There is no need to submit reports to the tax authorities of Nevis, only storage is mandatory.
- Foreign citizens should know that the banks of St. Kitts and Nevis participate in the system of automatic exchange of information (CRS), but not with all countries. In order to implement this mechanism, it is necessary for both jurisdictions to express an intention to mutually exchange data, which is not always the case.
- Exchange of tax information is possible only upon request and not for all states.
As you can see, registering an offshore company in St. Kitts and Nevis does not imply that the founder will be able to hide his assets – in a world of transparent information this is impossible. But incorporation in a quality offshore zone is a legal opportunity to control your own business more effectively, protect your assets, reduce tax rates and simplify access to international markets.
