Real Answers by Experienced Professionals.
Ask questions about offshore banking, company formation, asset protection and related topics.
Call Now 24 Hrs./Day
If consultants are busy, please call again.
As an asset planning instrument, few options can rival the protection that an offshore Limited Liability Company (LLC) provides. And in this increasingly crowded arena, few offshore locations can equal the advantages of a Nevis LLC. Protected by a recently amended and strengthened asset protection legislation, Nevis LLC founders are discovering and enjoying the satisfaction of knowing their assets are secure and shielded from unauthorized attention and spurious claims. At the same time, they have the freedom of pursuing and growing the business that they wisely registered as a Nevis LLC.
Nevis LLC Legal Flexibility
Although it is a clear and distinct legal entity on its own, a Nevis LLC is actually more of a cross between a partnership and a corporation. In fact, it possesses the best characteristics of both. A Nevis LLC enjoys the limited liability advantages of a big corporation as well as the tax liberties of a small partnership. The structure of a Nevis LLC is particularly flexible since it is mostly a matter of contract among the members, or pretty much what the members agree upon.
A properly drafted Nevis LLC Operating Agreement can provide additional verbiage to protect Nevis LLC members from personal liability in the (unlikely) event that a creditor brings a successful claim against the LLC. In addition, statues allow a Nevis LLC to exist in perpetuity, a condition that was once reserved only for corporations. Members can elect managers to run the LLC, either amongst themselves or by hiring outside experts, and they are free to transfer their interests in the LLC under the terms of the agreement.
The flexible structure of a Nevis LLC allows members to respond quickly to changing market conditions in practically any arena of business they operate without subjecting their activities to unwarranted inspection. It can have owners from anywhere in the world. A person can be a controlling manager and a member, just a controlling manager without ownership, or just a member. The flexibility of this entity applies to the area of taxation as well. US members are most often advised to complete the IRS 8832 tax form and elect foreign disregarded entity or foreign partnership status. Informed CPAs tell their clients that US LLCs receive this tax status by default but foreign LLCs need to make this election to receive sole proprietorship or partnership tax status. Foreign LLCs are taxed as foreign corporations by default. So, like a US LLC, tax statutes surrounding the offshore LLC enjoy similar tax options.
Nevis LLC Membership Flexibility
As you will read below, Nevis permits an LLC to be established with just one member. On the other end of this spectrum, there is no limit to the number of members a Nevis LLC can have. In addition, owner-members are not limited to individuals; they can be foundations, trusts, or even corporations. A Nevis LLC is also free to enter into business partnerships with other companies, own shares (in another company), real estate, bank accounts, and other tangible assets, and even be a beneficiary of trusts. Nevis LLC creators are given free rein in shaping the character and composition of its member base, giving them added assurance that their Nevis LLC will embody and carry out the purpose for which it has been formed.
Nevis LLC Laws
Nevis LLC laws permit a lone individual, working with a Nevis registered agent, to legally set up a Nevis LLC. In a single-member LLC, the owner-member holds all interests in the company and consequently, exercises complete control over the company. He or she makes decisions on matters pertaining to the direction of the LLC, including the type of business activity it can engage in, the contracts it can enter into, asset distribution, and other similar issues. A single-member LLC not only protects your assets, it also ensures that you retain sole authority over them.
The provision for a single-member LLC makes setting up a Nevis LLC a simple and largely uncomplicated task. As with multiple-member LLCs on the island, there are no reporting, auditing, or accounting requirements for a single-member LLC. In addition, the owner-member still gets to enjoy the generous tax benefits and protection that Nevis trust legislation extends to all properly-established LLCs on the island.
Nevis LLC Privacy
The documents that are publicly filed to set up a Nevis LLC do not contain the names of any of the members, thus enhancing privacy. A Nevis LLC does not require a filing disclosure of the identities of any of its members in order to be properly established. Any changes to the member or asset composition (such as adding or removing a member or increasing or decreasing the capital) are handled by and through the registered agent. There is no need to obtain the services of a nominee because member names do not appear in any part of the Articles of Organization. Individuals who wish to carry out a legal, ethical operation using their Nevis LLC without exposing themselves to possible future scrutiny will find that the anonymity of a Nevis LLC will help them do just that.
Nevis Registered Agent: Your Added Protection
Forming a Nevis LLC requires the services of a registered agent (such as our organization’s agent office in Nevis). This licensed person must be a Nevis resident or a legitimate business entity duly authorized to provide the entire range of trust or LLC-related services. Nevis LLC legislation also requires a minimum paid-in capital of $500,000 before a person or business entity can be issued a license to operate as a registered agent. A license is only issued after a careful and complete vetting process that tests an individual or company’s knowledge and expertise as well as personal and professional integrity.
Only the registered agent knows the identity of LLC member or members. However, they are prevented from sharing this information with another party by the very definition of their purpose. The rare exception to this of course, is when presented with irrefutable evidence of serious offense on the part of a member or members, such as acts of terrorism or drug-trafficking.
Nevis Courts: Lawsuit Shield
Practically no offshore court automatically enforces the judgement of a foreign court against an LLC or a trust that was properly established within its jurisdiction. Nevis courts are no different. A creditor bringing a claim against a Nevis LLC is required to present and pursue his or her case in a Nevis court. Because of the asset protection laws that are strongly enforced in Nevis, this can prove to be quite an expensive undertaking to your opponent. To begin with, a creditor must deposit the sum of $100,000 with the Nevis courts before any action can be taken.
Additionally, Nevis attorneys do not work on a contingency basis as many U.S. lawyers do when pursuing indemnity cases. A claimant will have to ante up a fair sum before a Nevis attorney will even consider taking him or her as a client. Keep in mind that this is on top of the $100,000 mentioned earlier, which will be used to cover court fees and other expenses should the claimant lose his or her case in court.
These amounts do not even cover plane fare, extended hotel accommodations during the trial, lost income, and other out-of-pocket expenses that a creditor will shoulder. Pursuing a claim against a Nevis LLC in a Nevis court is an expensive option and that may just be enough to deter most creditors from pushing their claim.
Nevis LLC Legal Procedural Requirement
As if the expense of mounting a case against an LLC in a Nevis court is not enough, the courts also impose a procedural requirement in any case brought against a Nevis LLC. Current Nevis laws are clear: only the Nevis LLC may be named as the defendant in a lawsuit. A case brought before a Nevis court that names the debtor-member will be dismissed immediately. A claimant who is aware of this can, of course, omit the name of the debtor-member in his or her lawsuit against a Nevis LLC. However, doing so makes it doubly difficult to go after a debtor-member’s interest since one cannot even name him or her in the suit.
Nevis LLC Charging Order Protection
It could happen that a creditor is granted a charging order against a debtor-member in a Nevis LLC. Although, given the hurdles above, this is a highly unlikely scenario. However, in the event that this does happen, the charging order gives the creditor the right to a distribution only from that particular member’s interest in the LLC. But it does not allow the creditor to force the LLC members to make any distributions to that member. So, in reality, the creditor ends up getting nothing. In other words, the interests of the other members as well as any income or interests arising from other assets or activities of the LLC are beyond the scope of the charging order. Again, if the LLC manager does not make a distribution to the debtor-member’s interest, the creditor, despite a hard-won charging order in hand, will be sent away empty-handed.
Although a charging order is practically the only remediation available to claimants against the interests and assets of a Nevis LLC, it remains a weak creditor remedy in light of the strict regulations of Nevis LLC laws.
Clearly, there are several advantages in setting up a Nevis LLC to protect your assets and interests from future creditors. You can set one up alone or with any number of people. You can even partner up with a corporation or a foundation. A Nevis LLC lets you reap the benefits of a large corporation (limited liability) as well as a partnership (tax liberties). Plus its flexible structure makes you an agile player in practically any business arena where you operate. Set up your Nevis LLC properly and your assets and business are practically insulated against claims, since Nevis court requirements are notoriously expensive and strict. And the pièce de résistance? You get to enjoy all this in the complete privacy that your Nevis LLC provides for you. Yes, life can be sweet!