Nevis Foundations Reviewed

Like most “Offshore” nil tax jurisdictions, local legislation enables the registration of Private Foundations in Nevis via the Nevis Multiform Foundation Ordinance.

 

The Nevis Multiform Foundations Ordinance provides that each Nevis Foundation must have a stated ‘multiform’. This means that the Constitution of the Foundation must state how it is to be treated. Initially a Nevis Multiform can be registered as:

(a)  A Multiform Trust; or as

(b)  A Multiform Company; or as

(c)  A Multiform LLC; or as

(d)  A Multiform Partnership; or as

(e)  A Multiform Private Foundation.

 

Through the ‘multiform’ concept the stated identity of the Foundation can be changed during its lifetime, thus allowing for there to be greater flexibility in its use and application. Generally, the Nevis Multiform Foundation product can be used for estate planning, charity, tax deferral, financing and special investment holding arrangements.

 

There are five basic requirements for establishing a Nevis Multiform Foundation:

 

-        It must have a Nevis based registered agent (which OCI supplies)

-        It must have a Nevis registered office (which OCI supplies)

-        It must have an acceptable name

-        It must have a management board and secretary (which OCI can supply via Nominees); and

-        It must have a memorandum of establishment

 

Like the formation of a company, you must first engage the services of a registered agent who is authorized to act as agent of the entity, and that registered agent must have an office to which all communications and notices may be addressed (OCI provides this service). The Promoter of the Foundation, through its registered agent, may reserve a name prior to establishment of the Foundation. If the Foundation is a Trust Foundation, then the name must accord with that multiform so that the Trust Foundation has the word “trust” in it. The name must not be prohibited by law: Irrespective of the prohibited word list the Registrar of Foundations will not reserve a name that is misleading, undesirable, confusing or similar to another name of an entity registered in Nevis.

 

Once the Registrar confirms that a name is available and valid for use, that name can be reserved for a period of one month. The Registrar has discretion to permit a name to be reserved for a longer period. Once a name has been reserved, the following establishment documents must be submitted to the Registrar in order to establish the Multiform Foundation:

 

-        Application Form

-        Consent Schedule

-        Memorandum of establishment

-        By laws (if standard by-laws are not adopted)

-        Evidence that the existing entity has been dissolved or discontinued or an undertaking that an application for dissolution or discontinuance has been submitted in the existing jurisdiction (where applicable)

 

The relevant fees must accompany the documentation for establishment of a Nevis Multiform Foundation.

 

Key Players

 

A Nevis Foundation requires:

 

Rather than having/naming Beneficiaries, potentially, a Nevis Foundation could, alternatively, set up as a Purpose Foundation. To learn what a Purpose Foundation is check this Link: https://offshoreincorporate.com/what-is-a-purpose-foundation/#:~:text=A%20Purpose%20Foundation%20is%20a,benefit%20on%20any%20specific%20person. ):  https://offshoreincorporate.com/faq/what-is-a-beneficiary/

 

It should be noted that one person cannot serve as Secretary and sole Board Member, though it is in order for the Secretary to be a Board Member, so long as there is at least one additional Board Member.

 

A Management Board and a Secretary are required for a Foundation – a supervisory board is something that is optional, and the constitutional documents should indicate whether a supervisory board is to be put in place. Nominees can be deployed to act as Founder, Secretary and as Councillor enabling the true Founder/Controller’s identity to be hidden from public view.

 

Unlike an IBC or LLC, renewal of a Foundation requires the submission of an annual return (and we can provide the draft return form in due course) Multiform Foundations Ordinance – Ch-07.08N-Multi-form-Foundations-Ord.pdf

 

Asset Protection Benefits

If you have a look at Section 83(1) of the Foundation Ordinance, you will see that there is a requirement to post a bond of US$50,000 prior to commencing any action against a Nevis Foundation. In practice, this is something that would be difficult and time consuming for a creditor, as local banks would typically not issue such a bond without the creditor being a customer, and account opening can take a while. The intent of this requirement is to deter frivolous lawsuits, while allowing a legitimate creditor a clear path to follow.

 

Redomiciliation & Conversion

The Nevis Multiform Foundation Ordinance also provides for entities to be converted or transformed, continued or consolidated and merged into a Nevis Multiform Foundation.

 

Through the process of Continuance, a Foundation in another jurisdiction can be continued in Nevis as a Multiform Foundation.

 

Through the process of Transformation, any entity outside of Nevis can be transformed into a Foundation in Nevis. (For example, a Trust in Jersey can become a multiform Foundation in Nevis).

 

Through the process of Conversion, an existing Nevis entity (eg an IBC) can be converted to a multiform Foundation.

 

Through the process of Consolidation or Merger, any two or more entities can merge into a multiform Foundation;

 

Through the process of Discontinuance, a multiform Foundation can move to another jurisdiction.

 

These provisions allow for the mobility of a Foundation as an entity into and out of Nevis and give the Founder an extremely valuable asset protection tool.

 

Cost:

Setup (Including 1 year’s basic admin government fees and disbursements) $3,500 (2nd and subsequent years $1,450)

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.