Nevis LLCs

A Nevis LLC is a limited liability company formed under the Nevis Limited Liability Company Ordinance (NLLCO), originally enacted in 1995 and significantly strengthened by amendments in 2015. For U.S. residents seeking offshore asset protection, a Nevis LLC provides a creditor-resistant holding structure that limits collection remedies, imposes procedural barriers on litigants, and places assets under a legal framework that U.S. courts cannot override.

The Nevis LLC is not a trust. It does not require the owner to relinquish control to a foreign fiduciary. The member can serve as manager, retain signatory authority over financial accounts, and direct the LLC’s investment activity.

Retention of control makes the Nevis LLC a less disruptive structure than an offshore trust, though the protection it offers is correspondingly less comprehensive. A Nevis LLC works best either as a standalone tool for individuals with moderate risk and moderate asset levels, or as a component of a layered structure in which the LLC is owned by a Cook Islands trust or Nevis trust.

The Charging Order as Exclusive Remedy

The core asset protection feature of a Nevis LLC is the statutory limitation on creditor remedies. Under Section 43 of the NLLCO, a charging order is the sole and exclusive remedy available to a judgment creditor seeking to reach a member’s interest in the LLC. The charging order entitles the creditor to receive distributions that would otherwise go to the debtor-member, but it confers no ownership rights, no voting rights, no management authority, and no ability to force the LLC to make distributions.

The creditor cannot foreclose on the membership interest, cannot force a liquidation of the LLC, and cannot engage in reverse veil-piercing to reach the LLC’s underlying assets.

If the LLC simply retains earnings rather than making distributions, the creditor receives nothing. The charging order expires after three years and cannot be renewed. The built-in sunset provision means the creditor’s window of potential recovery is finite and, in practice, often yields nothing at all.

The charging order must be obtained from a Nevis court. U.S. courts can issue charging orders against domestic LLC interests, but Nevis does not recognize foreign judgments or foreign court orders. A creditor holding a U.S. judgment must retain Nevis counsel on a non-contingent fee basis, post a bond (typically $25,000 to $100,000 at the court’s discretion), and pursue a new proceeding under Nevis law. Most creditors decline to take this step.

The Domestic Enforcement Problem

A standalone Nevis LLC is not bulletproof. Several U.S. courts have held that a creditor can foreclose a debtor’s membership interest in a foreign LLC through domestic proceedings, reasoning that the LLC interest constitutes intangible personal property located where the debtor resides.

Under this analysis, the creditor does not need to pursue the charging order in Nevis at all. The court applies its own state’s charging order law to the membership interest, bypassing Nevis protections entirely. The issue is particularly acute in states that treat single-member LLCs less favorably or that allow foreclosure of LLC interests as a creditor remedy.

Other courts have reached different conclusions, holding that enforcement must occur where the LLC is registered. The law on this point is unsettled, and the conflict among jurisdictions creates uncertainty for individuals who rely on a standalone Nevis LLC without additional structural layers.

The domestic enforcement vulnerability is the primary reason that a Nevis LLC is most effective when owned by an offshore trust rather than held directly by the U.S. member. When a Cook Islands trust or Nevis trust owns 100% of the LLC, the debtor no longer holds a membership interest that can be characterized as personal property located in the United States. The trust, not the debtor, is the member. Offshore trusts and offshore LLCs serve different protective functions, but the combined structure eliminates the domestic enforcement gap that a standalone LLC leaves open.

Additional Statutory Protections

Beyond the charging order limitation, Nevis law imposes several additional barriers to creditor enforcement.

Fraudulent transfer claims under the NLLCO require the creditor to prove beyond a reasonable doubt that the member transferred assets to the LLC with the principal intent to defraud that particular creditor. The member must also have been insolvent at the time of the transfer. The criminal standard of proof applied to a civil claim is extraordinarily difficult to satisfy.

The statute of limitations for fraudulent transfer actions is two years from the date of the disputed transfer. After that period, the transfers are beyond challenge.

The creditor must post a bond before initiating any proceeding against a Nevis LLC member. The bond amount is set by the court and can be $100,000 or more. The bond is forfeitable if the creditor’s claim fails, creating a meaningful financial deterrent.

Single-member Nevis LLCs receive the same statutory protections as multi-member LLCs. This is a significant distinction from many U.S. jurisdictions, where single-member LLCs are treated less favorably and courts may permit foreclosure or turnover of the sole member’s interest.

Formation and Management

A Nevis LLC is formed by filing articles of organization with the Nevis Registrar through a registered agent located in Nevis. The process can be completed remotely and typically takes one to two weeks. The member does not need to travel to Nevis or maintain a physical presence on the island.

The LLC must have a Nevis-registered agent at all times. Member and manager identities are not disclosed in any public registry, which provides a degree of ownership privacy that domestic LLCs cannot match.

The manager of a Nevis LLC does not need to be a Nevis resident. The member can serve as initial manager, retaining direct control over the LLC’s financial accounts, investment decisions, and day-to-day operations. For enhanced protection, the member can appoint a foreign individual or company as successor manager to assume control when a creditor threat materializes.

An effective operating agreement should address the circumstances under which the successor manager takes over and should prevent the debtor-member from unilaterally removing the foreign manager once appointed.

When the Nevis LLC is paired with an offshore trust, the trust is the sole member and the LLC’s operating agreement designates the trustee (or a trustee-appointed entity) as successor manager. The U.S. individual serves as initial manager during ordinary times and is removed by the trustee when litigation arises.

Costs

Forming a Nevis LLC typically costs $3,000 to $5,000 in legal fees, plus government filing fees and registered agent costs. Annual maintenance runs $1,200 to $2,000 for the registered agent and government renewal, plus any costs associated with U.S. tax compliance.

Nevis LLC costs are substantially lower than offshore trust costs, which is one of the reasons the structure appeals to individuals who want some offshore protection without committing to a full trust. The trade-off is that the LLC alone provides less protection than a trust, particularly given the unresolved questions about domestic enforcement of foreign LLC interests.

For individuals who ultimately pair the Nevis LLC with an offshore trust, the LLC adds approximately $5,000 to the initial setup cost and $900 to $2,000 per year to ongoing expenses. The full cost of establishing an offshore trust includes the trust itself, the LLC, and the compliance work required by both.

Tax Treatment and Reporting

A Nevis LLC does not provide any tax advantage to U.S. persons. Nevis imposes no local taxes on foreign-owned LLCs, but this is irrelevant for U.S. citizens and residents who owe tax on worldwide income regardless of where the income is earned or where the entity is organized.

A single-member Nevis LLC owned directly by a U.S. person is typically treated as a disregarded entity for federal tax purposes. Income and deductions flow through to the member’s individual return. The member must file Form 8858 (Information Return of U.S. Persons With Respect to Foreign Disregarded Entities) annually. If the LLC is owned by a foreign trust, the reporting chain becomes more complex and includes Forms 3520, 3520-A, FBAR, and Form 8938.

If the LLC maintains foreign financial accounts with an aggregate balance exceeding $10,000 at any point during the year, the U.S. member must file an FBAR. Penalties for non-compliance with offshore reporting requirements are severe and can exceed the value of the undisclosed accounts. Working with a CPA experienced in international tax compliance before establishing any offshore structure is essential.

Nevis LLC vs. Cook Islands LLC

The Cook Islands also offers an LLC statute with asset protection features comparable to Nevis. Both jurisdictions limit creditor remedies to charging orders, impose elevated burdens of proof for fraudulent transfer claims, and refuse to recognize foreign judgments. The key differences are practical rather than legal.

The Cook Islands charging order has a five-year duration compared to three years in Nevis. Nevis requires creditors to post a bond; the Cook Islands does not. The Cook Islands has a more developed trustee market, which matters primarily when the LLC is paired with a trust.

For individuals using a standalone LLC without a trust wrapper, Nevis is generally the preferred jurisdiction because of the shorter charging order duration and the bond requirement. For individuals pairing the LLC with a Cook Islands trust, a Cook Islands LLC may simplify administration by keeping all entities under a single jurisdiction’s legal framework.

Nevis LLC vs. Wyoming LLC

A domestic LLC formed in a favorable state does not provide the same protection as a Nevis LLC against aggressive creditors with access to U.S. courts. A Nevis LLC and a Wyoming LLC differ in charging order exclusivity, single-member protections, bond requirements, and whether a creditor can reach the membership interest through the debtor’s home state court.

When a Nevis LLC Makes Sense

A standalone Nevis LLC is appropriate for individuals with moderate litigation exposure and $250,000 to $1,000,000 in transferable liquid assets who want creditor deterrence without the cost and complexity of a full offshore trust. The structure is also used as a holding entity within a larger offshore plan, where it serves as the operational layer beneath a Cook Islands or Nevis trust.

Individuals with higher asset levels, more severe litigation exposure, or a need for the strongest available protection should consider pairing the Nevis LLC with an offshore trust. The LLC provides operational flexibility and an additional layer of statutory barriers. The trust provides the jurisdictional separation and impossibility defense that the LLC alone cannot deliver.