Nevis LLC Guide

Nevis, part of the Federation of St. Kitts and Nevis in the Caribbean, has become a prominent jurisdiction for forming Limited Liability Companies (LLCs) due to its favorable asset protection statutes. A Nevis LLC offers a combination of flexibility, confidentiality, and security for businesses and investors looking to safeguard their assets.

How Does a Nevis LLC Protect Your Assets?

Nevis courts do not recognize a charging order issued by a U.S. court. In theory, a U.S. creditor must apply for a separate charging order in Nevis. A U.S. creditor rarely, if ever, obtains a charging lien through Nevis courts to enforce a U.S. judgment.

In 2015, one Florida court held that a creditor could foreclose a debtor’s interest in a single-member Nevis LLC through Florida court proceedings. The court held that LLC interests are intangible personal property subject to the jurisdiction of courts where the debtor resides and holds their LLC interest, in this case, Florida.

The court said it could order foreclosure of the debtor’s membership interest in their single-member LLC under Florida law because the membership interest is in Florida. Other courts have reached the opposite result holding that charging liens must be filed in the LLC’s originating jurisdiction, such as Nevis.

Key Features of Nevis LLCs

1. Asset Protection:
   • Nevis LLCs offer significant asset protection features. The laws in Nevis make it challenging for creditors to access LLC assets. For instance, creditors must post a bond and prove their claims beyond a reasonable doubt, which is a high legal standard.
2. Flexibility in Structure and Management:
   • Nevis allows LLCs to be structured in a way that suits the members’ needs. There are no restrictions on the number or nationality of members, and a single-member LLC is permissible. The LLC can be managed by members or designated managers.
3. Confidentiality:
   • Nevis does not require LLCs to disclose information about members or managers publicly. The registration process ensures significant confidentiality, making it ideal for individuals and entities seeking privacy.
4. Tax Neutrality:
   • Nevis imposes no personal or corporate income tax, estate tax, or inheritance tax on LLCs that operate internationally. This makes Nevis an attractive jurisdiction for tax planning.
5. Ease of Formation and Maintenance:
   • Forming an LLC in Nevis is straightforward and can be completed quickly, often within a few days. The ongoing compliance requirements are minimal, reducing the administrative burden.

How to Form a Nevis LLC

To form an LLC in Nevis, a person must (1) select a registered agent in Nevis, (2) pass a due diligence check with the agent company, (3) determine the manager of the LLC, and (4) file the required paperwork with the Island of Nevis.

A U.S. entity or law firm can act as an interface between the U.S. person and an offshore formation company that serves as a registered agent and the forming entity of the Nevis LLC. The offshore company can be formed without ever having to leave the United States.

Nevis LLC Manager

The manager of a Nevis  LLC does not have to be a Nevis resident or a Nevis business organization. A Nevis LLC’s manager may be the debtor/member himself or any other individual located in the United States or a different foreign jurisdiction. Some debtors have friends or relatives living in foreign jurisdictions whom they appoint as initial or successor managers.

A debtor serving as LLC manager controls the Nevis LLC, and they can maintain assets in the United States, Nevis, or anywhere else in the world. For example, a Nevis LLC may have a Florida bank account, or if appropriate, it may open an offshore bank account in Nevis or a bank in the European Union.

A debtor serving as manager of their own Nevis LLC does not have the best asset protection. A Nevis LLC provides better protection if the debtor appoints as either the initial or successor manager an individual or company outside of the United States. A U.S court would not have jurisdiction over a foreign manager. An effective LLC operating agreement provides that the debtor/member cannot remove the foreign manager. The U.S. debtor must be willing to trust a foreign LLC manager if an aggressive creditor threatens to attack the Nevis LLC.

Background Check

U.S. debtors must exercise due diligence to investigate and interview offshore companies that provide LLC management services. There are many reputable LLC management companies, but each person should interview companies and persons who will control their assets transferred to the Nevis LLC. People should do more than rely on their professional advisers’ suggestions to select an offshore manager for their Nevis LLC.

Often, people are surprised that offshore managers do a thorough investigation and due diligence about prospective customers. Offshore management companies are careful about whom they do business with, and they are subject to “know your customer” regulations. For example, offshore managers are reluctant to become associated with U.S. individuals who are involved in disputes with a federal or state government agency or individuals involved in contentious divorce litigation.

Asset Management

An offshore manager of a Nevis LLC may have discretion over the management of assets transferred to the LLC. Asset management within a Nevis LLC is similar to discretionary financial accounts offered by most U.S. financial institutions. A Nevis management company typically hires a financial institution outside the U.S to invest the member’s money in securities throughout the world, including U.S. securities.

As is the case in U.S. discretionary accounts, the Nevis LLC member can direct the LLC’s investment policy and goals. The member can instruct the LLC’s money manager about risk tolerance and asset allocation between bonds or equity and between U.S. or international markets. The money manager of the Nevis LLC normally sends the LLC member monthly statements and trade confirmations if requested.

Some Nevis management companies are receptive to the appointment of a U.S. person as asset manager. The U.S. person is appointed as a co-manager with the authority to make investment decisions regarding LLC financial assets.

Nevis LLC vs. Cook Islands LLC

The Cook Islands also has favorable LLC statutes. Cook Islands law has similar asset protection benefits and barriers to collection. Nevis, however, has an important practical advantage. The Cook Islands are physically situated in the South Pacific Ocean near New Zealand. Travel to the Cook Islands is long and expensive. Nevis is situated in the Caribbean Ocean and can be reached by a short plane ride from Puerto Rico. It is easier and less expensive for a U.S. person to visit Nevis to interview prospective offshore management companies that will have control of LLC assets.  

Frequently Asked Questions

Here are answers to some frequently asked questions about Nevis LLCs.