Company formation in brief

A special feature of the law of the Federation of Saint Kitts and Nevis (SKN) is that companies established on the island of Nevis may choose whether they will be subject to standard income tax or they will obtain an offshore status and an appropriate exemption from taxation. Companies established on the island of St. Kitts may not be established as offshore ones and pay taxes at the standard rate.

Nevis is an offshore jurisdiction with a recognised concept of a tax exempt company (and/or offshore company, International Business Company (IBC), trust, foundation etc.) registration. A company formation in Nevis could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in Nevis. To set up a company in Nevis is possible by correspondence, but to open a bank account in Nevis will, most probably, require a personal visit.

Although the SKN law provides for registration of companies of various organizational and legal forms on the islands, in practice, only classic offshore companies (International Business Companies - IBC) established in Nevis might be of some interest to a potential foreign investor until recently.

International Business Company

International Business Company (IBC) is characterised as follows:

• one person (physical or legal) may own and manage IBC in Nevis;

• names may not include words or their derivatives reflecting activities subject to licensing, for example, Bank, Chamber of Commerce, Chartered, Insurance;

• no minimum charter capital which may be expressed in any currency;

• registered shares (of such classes, types and fractions as IBC owners decide) may be issued;

• IBC needs to have a registered agent which should be a qualified entity or a private person with a government license obtained at SKN;

• directors’ and shareholders’ meetings may be held in any country and their minutes and financial documents may be kept anywhere in the world;

• IBC is required to maintain the directors and shareholders registers;

• IBC may not do business with SKN residents or invest funds in any property located in the islands, other than for maintaining its own office. IBC may not be engaged in banking or trust activities, insurance or reinsurance, or provide its registered office address for other companies’ needs. In fact, IBC may operate outside SKN only;

• IBC having an account in one of the banks at SKN has guarantee in respect of repatriation of 100% of capital and profits outside SKN;

If an IBC does not pay annual state fees for renewing its registration, it will be deleted from the SKN Companies Register one year after the date of the last fee payment. The Companies Act clearly explains that an IBC excluded from the Register may not continue its business activities and, in particular, manage its bank accounts, although its directors and shareholders continue being fully liable for the company’s debts and obligations.

IBC may be re-registered in the SKN Companies Register but after a certain period of time, the company may be re-registered only through the local court which may take either a positive or a negative decision in respect of the re-registration.

Any foreign companies may move to SKN, and alternatively, IBCs registered at SKN may change their registered address by duly observing relevant formalities.

Dividends paid to shareholders are not subject to taxation in Nevis.

IBCs will not be considered as doing business in Nevis because they have bank accounts in Nevis, hold directors’ or shareholders’ meetings, maintain corporate and financial statements in Nevis, as well as keep administrative offices, have a registered agent in Nevis, invest in shares or purchase real estate items in Nevis.

Recent changes in the legislation have caused reporting requirements to appear and Nevis companies have to keep accounts. All company operations reflected in contracts, accounts and other business documents have to be accounted for. Pursuant to the law, all financial statements for Nevis companies must: at any time, explain correctly all company’s transactions, financial standing and include detailed records. Financial statements must be kept for a period of 5 years from the date of their preparation, preferably, at the registered agent's address or at any other place good for their verification by the company members at any time. Should those requirements be violated, the company will have to pay a fine of US$ 5’000.

Nevis IBC is also required to keep all minutes of shareholders' meetings, records of actions taken in accordance with shareholders’ decision, minutes of directors' meetings and minutes of actions taken in accordance with directors’ decision. All records must be kept in the written form or in any other form which enables their conversion into the written form within a reasonable period of time.

Nevis is involved in automatic tax information exchange.

Nevis does not have Double Taxation Agreements

99 classical offshore, onshore and midshore jurisdictions of Europe, America, Middle East, Asia, Africa and Oceania


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