A Nevis Multiform Foundation provides a unique foundation capable of also taking the form of a partnership, trust, or a company. All of them are separate legal entities. No other foundation offers such flexibility in its legal entity structure.
Foreigners can create a foundation transferring international assets for foreign beneficiaries. A perfect legal entity for asset protection and estate planning. The foundation can also act as a holding company for international assets such as real estate, corporate stocks, bonds, mutual funds, commodities, bank accounts, art collections, investment holdings, pension funds and much more.
The Multiform Foundation Ordinance of 2004 (hereinafter the “Ordinance”) governs how Nevis foundations are formed, their legal activities, and termination. There are tremendous benefits in Nevis as you can see in this offshore foundations comparison table.
Background
Nevis and the St. Kitts Islands form a federation in the Caribbean Sea. After over 300 years as a British colony, both islands gained their independence in 1983. They continue to maintain British Commonwealth associations.
Nevis Multiform Foundation Benefits
A Nevis Multiform Foundation offers these benefits:
• Complete Foreign Ownership: Foreigners can be the founders and beneficiaries.
• Total Tax Exemption: Foundations do not pay any taxes. However, U.S. taxpayers and all others paying income taxes on global income must report all income to their governments.
• Confidential and Private: The founders and beneficiaries names are not in any public records and the books and accounting records are confidential.
• Multiform: Foundations can choose to be regular, trust, company, or partnership foundations.
• Business Activities: Company and Partnership Foundations may engage in normal business activities.
• Asset Protection: Foundations own the assets and Nevis laws protect them from other countries laws and court judgments or orders.
• Estate Planning: Foundations may be perpetual offering families long term estate planning structures for many generations.
• Fast Formation: A foundation can be formed in one day.
• English: After 300 years as a British colony, English is the official language.
Legal Information
Foundation Name
Foundations must select a name totally different from company names of other legal entities in Nevis.
The name must end with the word “Foundation” so the public will not become confused as to the nature of its legal identity.
Business Activities
Regular foundations cannot engage in active business activities or be involved with a trade. However, passive investments and business earnings are permitted.
However, when converting or registering as another form of foundation like a “company” or “partnership”; normal company and partnership activities can be engaged in for profit.
Multiform Foundations
Nevis foundations can choose to register as either a regular Nevis Foundation, a Nevis Partnership Foundation, a Nevis Trust Foundation, or a Nevis Company Foundation.
After initially registering under one form, the foundation can change to another form at any time by registering the new name with the government.
In order to accomplish the transformation, foundations may be revocable.
Other legal entities in Nevis can also convert into one of the above-mentioned foundation forms.
Duration
Foundations are not subject to the laws against perpetuity other countries impose. This means that when forming a foundation may choose perpetual life or a definite number of year’s lifespan.
Formation
Nevis foundations are formed by the execution of one or two documents: Memorandum of Establishment and the Bylaws (optional) written in English.
The Memorandum of Establishment should contain:
• Foundation’s name;
• Registered local office address;
• Details about the registered agent;
• Declaration of which multiform will be adopted by the foundation;
• Foundation’s purpose;
• Duration of lifespan;
• Whether irrevocable or revocable;
• Initial subscription (Minimum of $10,000 USD required);
• Which country’s laws apply (Nevis or another country); and
• Other important clauses.
Positions and Roles Within the Foundations
- Secretary – required role. One Secretary required. Cannot be person who is sole member of management board.
- Management Board – required. Must have at least one member who cannot also be Secretary. Persons set out in s 17(5) of Multiform Foundations Ordinance (attached) are excluded. Our by-laws provide for a maximum of seven members.
- Supervisory Board – optional. If desired, can have 1-7 members under our by-laws. Sole member of management board cannot also be sole member of supervisory board.
- Beneficial Owner(s) – The one(s) who own the foundation.
- Founder – at least one required. This is the person establishing and placing assets into the foundation.
- Council Members – Not a statutory role in Nevis Foundations. Management Board is equivalent.
- Enforcer – Not a statutory role in Nevis Foundations. Supervisory Board is equivalent.
- Beneficiaries – at least one normally expected but not compulsory as a Foundation can be established for a purpose or object.
- Protector / Guardian – Not a statutory role in Nevis Foundations. Supervisory Board is equivalent.
- Director – Not a statutory role in Nevis Foundations.
Founder
A founder is the creator of a foundation. One or more natural persons or legal entities from any country and residing anywhere can be the founder(s). There is no limit on the number of founders.
Founders can also be beneficiaries of the foundation.
Management
A minimum of one person must be appointed as the manager. If more than one manager, a management board must exist.
A secretary is required who can be the sole manager. In other words, the secretary can be the sole manager but cannot be the sole member.
Beneficiaries
The person benefiting from the foundation are the “beneficiaries”. They can be natural persons or legal entities from any country and residing anywhere. There is no limit on the number of beneficiaries. As mentioned above, a founder can also be a beneficiary.
Protector
A protector who protects the interests of the beneficiaries may be appointed. The Memorandum of Establishment should provide how a protector is appointed, compensated, removed, and what powers he or she may have to protect the rights of the beneficiaries including overruling the management or providing prior consent before the management may act.
Asset Protection
The foundation has no owners unlike companies and corporations. The assets of the foundation become separate from the founder who no longer owns them.
Nevis does not recognize foreign laws or their court judgments. So, the assets cannot be seized to satisfy creditors with foreign court judgments.
Confidential
Foundations receive the same protections of confidentiality as corporations as the Ordinance does not allow the “piercing of corporate veil”. Thus, foundations’ books and accounting records and other important information are confidential and private by law.
Privacy
The names of the founder and the beneficiaries are not included in any public records. Pursuant to the Ordinance.
Arbitration
The Ordinance allows for arbitration of legal disputes rather than being forced to file expensive and time consuming lawsuits.
Registered Agent and Office
Every foundation must appoint a local lawyer or a law firm as the registered agent whose office address can be used as the registered address.
Minimum Subscription
The Ordinance requires a minimum initial subscription of $10,000 USD.
Taxes
Foundations are exempt from all taxes as long as the founder, beneficiaries, and managing officers are not Nevis residents and the assets are not located in Nevis. In addition, a company or partnership foundation cannot do business with Nevis residents or own real property in Nevis.
Foundations have the option to register as a resident foundation subject to a corporate tax rate of 1% from income gained from local business activities.
Note: U.S. taxpayers like everyone subject to taxation of all worldwide income must report all income to their tax authorities.
Accounting
The foundation’s books and accounting records must be maintained at the registered office.
Annual Meetings
The management board must hold an annual meeting which can be held anywhere in the world. In addition, the meeting can be conducted by telephone, video conferencing, or other means.
Public Records
Foundations do no register with the government so the names of the founder and beneficiaries remain private.
Time for Formation
A foundation can be formed in one day.
Conclusion
A Nevis Multiform Foundation has these benefits: total foreign participation, confidential and privacy, no taxes, multiple formations as legal entities, fast formation, asset protection, estate planning, business activities flexibility, and English as its official language.
