The Nevis LLC is a popular choice of Offshore Company for clients looking for robust Offshore Asset Protection features principally because (a) The Nevis LLC enables you to shield your assets from lawsuits, agencies, and financial creditors and (b) Owners are shielded from legal liability and can manage the company without becoming liable for company financial obligations or legal liabilities.
One major benefit of the Nevis LLC is that it has members rather than shareholders. Therefore, there are not any shares that can be seized by a court of law. Moreover, members are not legally responsible for company obligations.
ADDITIONAL NEVIS LLC ADVANTAGES:
- A manager can have 100% control of the company.
- The manager of the LLC does not need to have any ownership and yet can control the entire company and all of its assets.
- A Nevis LLC can have any number of members.
- Any person or company can own the entity.
- Nevis does not impose corporate tax, income tax, withholding tax, stamp tax, asset tax, exchange controls or other fees or taxes on assets or income originating outside of Nevis.
- Members of LLCs may be individuals or business entities of any nationality or domicile.
- Members may amend their Articles of Organization, merge, or consolidate with other domestic or foreign LLCs or other business entities.
- Members of the offshore company may assign their interests to other parties unless restricted otherwise. Nevis permits single member LLCs.
- Management of the companies may be by the members or by managers designated by the members.
- There are no stock limitations – a Nevis LLC can issue preferred interests analogous to preferred stock of corporations.
- It is an excellent vehicle if used by a group of investors for a joint venture investment. In this respect it functions as if it was a Limited Partnership, but with all the added liability protection features and advantages of a corporation.
- It can be set up within 24 hours and has low initial cost and low annual fees.
With a Nevis LLC you can appoint an Officer to manage the Company (known as a Manager – which is the equivalent of Director in the case of a Limited Company). But as by law a Nevis LLC is controlled by the Manager any order by a foreign court ordering you to do something (eg hand over money held by your LLC) has no effect at law.
LLC vs. Corporation:
The primary distinction between an LLC and a “normal” company such as a “C” corporation (USA) or a PLC (United Kingdom), is that the LLC is a tax-neutral vehicle because it is taxed as a partnership, rather than as a corporation. Thus, using an LLC can eliminate tax at the corporate level. In this regard, it is somewhat like a U.S. “S” corporation or a German GmbH but without all the restrictions and disadvantages. So if the LLC itself has no tax payment obligation – then who does? The obligation for any taxes that would otherwise be owed by the company bypasses the company itself and attaches directly to the members. Members are to LLCs what shareholders are to corporations. Other companies, as well as individuals and trusts, can be members of an LLC. There are no limits on the number of members or the classes of members that an LLC may have each member is responsible for his/her own pro-rata share of any overall tax obligation, if any, leaving the LLC itself with no tax obligations.
LLC as an alternative or in addition to a Trust
Because of the flexibility available in LLC management structuring, and because of the favorable way in which the laws of Nevis are drafted, this type of entity can also be used as alternatives to or in addition to an asset protection trust. The manager of the LLC is somewhat akin to the trustee of a trust and the members are akin to the beneficiaries of a trust. OCI can act as a nominee manager of an LLC on behalf of a client who desires to take advantage of our corporate management services.
Substituting an LLC for a trust can change the reporting requirements of taxpayers in onshore jurisdictions. The income or capital gain of an LLC is not reportable as trust income or gain or as corporate income or gain but is treated as personal income (as in the US or UK) or gain or is non-taxable, depending upon the jurisdiction in which the owners reside.
Multi-National Joint Ventures:
LLCs are excellent vehicles for structuring joint venture arrangements between project participants from different countries. This is so because the venture can enjoy all of the benefits of incorporation, but each member is liable for his own taxation in his own country. Moreover, the membership flexibility allows different joint ventures to have different levels of ownership and reward based upon the value that each constituent member brings to the project.
All Nevis LLCs are free from all forms of Nevisian taxation. There are no Nevisian taxes on dividends, income, capital distribution, or wages whatsoever. Moreover, unlike many onshore jurisdictions, Nevis does not tax an LLC for accumulated (but undistributed) earnings.
All of the affairs of the LLC are private and cannot be disclosed except under truly exceptional circumstances such as links to international terrorism. The only document that needs to be filed with the government is the annual corporate license and this contains minimal information. There is no annual report or annual financial return that needs to be made to the government. There is no public inspection of your LLCs’ records. Confidentiality is further enhanced if the LLC appoints our company as manager and we perform the minimal corporate duties required under Nevisian law.
Confidentiality & Asset Protection:
Nevisian LLC laws contain many requirements related to confidentiality including strict financial secrecy laws. Strict legal requirements, known as fiduciary duties, also govern the behaviour of OCI as a manager of an LLC. These fiduciary duties are imposed on managers by both the equivalent of the LLCs bylaws and by the proper law of the LLC (usually the law of the country where the manager is located).
Many of these fiduciary requirements relate to secrecy and accounting obligations by which the manager must abide. Nevisian LLC law prevents us from discussing your business with anyone to which you have not instructed us to speak.
Others cannot force us to discuss your business with anyone unless they obtain a court order against you or us or both ordering a disclosure to be made. But a court order from their respective jurisdiction is useless in Nevis. In accordance with strong Nevisian law, a judgement from outside of Nevis will not be recognized by Nevisian courts. This means an onshore judgement creditor who won a lawsuit against you or your LLC in, for example, the U.S., UK, Canada or Germany cannot take that foreign judgement and require a Nevisian court to enforce it.
In addition to not recognizing the judgements of other countries, Nevisian law and Nevisian courts do not favor the granting of court orders against LLCs except under truly exceptional circumstances. Nevisian law favors upholding the independence and application of its own law over the enforcement of foreign, onshore laws. Additionally any legal action seeking to overturn the transfer of an asset to a Nevis LLC can only be brought within 2 years of the date of transfer after which time the claim is statute barred.
Finally to sue a Nevis LLC is not easy – a Plaintiff must first post a bond of $US100,000 in Nevis before he/she can initiate legal action to collect a judgment against a member of a Nevis LLC.
As always local laws can have an impact, so be sure to seek local legal/tax/financial advice before committing to set up a Nevis LLC.