When venturing offshore it is sometimes a challenge to choose the right or suitable jurisdiction for incorporating a company and deciding exactly what type of offshore mechanism best suits your needs, but the island of Nevis is one of the very few jurisdictions which ensure that offshore structures such as the Nevis Limited Liability Company (LLC) are dependable for business and decreasing the tax burden on profits.
The Nevis LLC is an offshore business entity which was formed by merging some of the qualities of a sole proprietorship/partnership and a corporation. Based on this, the Nevis LLC is described as a hybrid structure having been emerged from these two distinct business entities. Nevis LLCs obtain their traits and rules governing them from the Nevis Limited Liability Company Ordinance which was passed in 1995, with amendments in 2002, and enjoy pass-through taxation (partnerships) and the limited liability of a corporation
LLCs in Nevis are rapidly becoming one of the most used offshore vehicles for trade and providing offshore services. The LLC originates from the United States, where the first laws introducing the LLC as a multipurpose and tax efficient entity were enacted. Nevis LLCs laws were adapted according to the features that were considered critical and profitable to the individual or legal entity that wishes to incorporate a Nevis LLC.
The Nevis offshore LLC is a business entity combines the most favoured features of a corporation and a partnership so as to harness the primary benefits of both entities;.
As its name suggests and previously mentioned, the Nevis LLC is a special type of company which isolates the assets of its members from its own, enabling members to limit the possible risk of losing their personal assets if they were to be tied or invested in the company. To achieve this, the Nevis LLC restricts the liabilities of each member to the amount of capital that they each would have put into the LLC. This feature of the Nevis LLC further explains the reason why persons investing in the company are referred to as members and not shareholders, based on the fact that investments are regarded as contributions and not shares; but the payment of dividends and interests where applicable are still paid. Also separate from the members are the rights and liabilities of the Nevis LLC, which allows for further legal protection of members. Nevis LLCs thus offers an alternative to setting up a partnership or a corporation where the special characteristics of one form do not exist in the other.
Having inherited many of its features from the classical US LLC, the Nevis LLC is a flexible structure that can be easily managed, amended and structured in a manner capable of functioning in the best interest of the company and at the same time satisfying the requirements of its members.
In Nevis, incorporating an LLC is fast, simple, and can be done by a single person, who may or may not be a member of the company at that point in time. A member can be a corporation, an individual or several people.
A Nevis LLC becomes effective and legally existent upon filing of the Articles of Organisation, which serves as its memorandum. The Articles set forth the LLCs name, a statement of formation, the registered agent’s name and address, management matters and the latest date on which dissolution can take place if plans exit to dissolve the period within a certain period of time. If desired, a Nevis LLC may be constitutionally structured to have a perpetual or limited lifespan.
The members of a Nevis LLC may opt to enter into an operating agreement wherein provisions are made for the nature of business to be carried out, the relationship between members as well as their rights and powers. To be effective, an operating agreement must be signed by all members. Operating agreements, however, do not have to be in writing if provisions governing this matter are established in the articles of organisation.
The registered agent of a Nevis Limited Liability Company must be authorized by the government and be solicitor or barrister who practices locally or a corporation which has a minimum paid-up capital of US $500,000.
Nevis LLCs are exempt from corporate tax, stamp tax, income tax, withholding tax and capital gains tax, including exchange controls.