Discover the advantages of choosing Nevis as a tax haven for your large-scale business. Learn about Nevis’s stable political and financial system, tax-exempt status, confidentiality, and asset protection.
Nevis is a beautiful island in the Caribbean Sea that is especially favored by owners of large business companies. A member of the Commonwealth of Nations, the Federation of St Kitts and Nevis has a stable political and financial system. The country provides confidentiality of company ownership information and personal privacy.
An offshore company registered in Nevis is tax-exempt in the jurisdiction. Besides, there are no control of capital flows and relaxed bookkeeping requirements. You can find branches of several international banks on the islands.
Nevis-based offshore companies do not have to pay any taxes on profits made in foreign countries. The economic situation is stable in the country as it derives incomes from marine industries, tourism, and the electronic industry.
The main trade partner of St Kitts and Nevis is the United States of America. More than two thirds of all import/ export operations in St Kitts and Nevis are performed with the USA.
Why is Nevis often referred to as a ‘tax haven’ even though some taxes are payable there (see below)? There are several factors that allow calling Nevis a tax haven.
For years, Nevis has been an offshore jurisdiction that provides ironclad protection of the assets registered in the name of a local company. A foreign entrepreneur registering an LLC or a trust in Nevis can be 100% sure that his/ her property will remain intact. Nobody could take it away thanks to the strict corporate laws in Nevis.
The corporate legislation in Nevis copies the Companies Act applicable in the state of Delaware, one of the US states that is also referred to as an offshore jurisdiction. Not very many people live on the island but they all speak English, which makes it easy to communicate with locals. Foreign investors have no trouble finding their way in Nevis.
Advantages of Nevis for offshore business formation
? There are several factors that attract foreign business people who register offshore companies in the island.
1. Corporate confidentiality
Affluent people often want their privacy well protected. This concerns not only their personal data but also their corporate activities, banking operations, and so on. Nevis is sometimes called ‘the most secret island in the world’. The owners of companies registered in Nevis can be dead certain that no third party can find out who the ultimate beneficiary company owners are. In addition, it is legal to use nominee services in Nevis: your company can have a nominee director and nominee shareholders.
2. Highest level of asset protection
No creditors or greedy relatives can lay hands on the assets that are written in the name of a Nevis-registered company, such as an LLC, for example. First, the names of the company owners are kept secret. Second, the corporate legislation is highly efficient in Nevis.
3. Transparent and understandable corporate legislation
If you would like to find out about the legal system in Nevis before registering a company there, you can simply study the legislation of the state of Delaware. The corporate legislation is almost identical in Nevis.
4. Tax policies beneficial for foreign companies
In addition to its political and economic stability, Nevis also offers a favorable tax system to foreign investors. The opportunity to save on taxes by establishing a company in Nevis is probably the main reason why so many foreigners register companies in Nevis. Let’s look at the tax policies in the jurisdiction in some detail.
Tax residence in Nevis
A company can be a resident company in Nevis or a non-resident one. The status will largely determine how the company is going to be taxed. Actually, two criteria matter:
- If the company is resident in Nevis or not;
- If the company makes profits in Nevis or outside.
A company is considered a resident company in Nevis if the following applies:
- The company is controlled and managed from Nevis even though it may be registered in another jurisdiction;
- The company is registered in Nevis by a foreign national (or foreign nationals) and it conducts business operations on the island.
A company is considered a non-resident one if it conducts no business operations in Nevis even if it is registered on the island. Resident companies are taxed on their global income. Non-resident companies are taxed only on the income made in St Kitts and Nevis. The income tax rate is 33% in Nevis.
Tax policies in Nevis
The corporate income tax and the withholding tax are not charged if the company does business exclusively with partners in other jurisdictions. Besides, if a non-resident company registered in Nevis does business only abroad, the dividends paid to the company owners are not taxed in Nevis either. If the company does business in Nevis, the corporate income tax rate is 35%
Effectively, it means that no personal income tax is charged in Nevis, which spares the company shareholders the need to file tax returns there. However, if you are to file a tax return in your home country, you should certainly do so.
Nevis charges no capital gains tax. Only one exception applies: if you buy a piece of property in Nevis and then sell it before a full year elapses, you’ll have to pay a 20% capital gains tax. This means that you have to have a really good offer or otherwise be patient.
Nevis is especially attractive for investing into real property there. Neither property tax nor gift tax nor inheritance tax are payable in Nevis.
Many companies can also qualify for 15-year tax holidays in Nevis. A developer investing in hotel construction, for example, can be tax-exempt for the first 15 years of operations.
You have to pay taxes at home
Even though your offshore company may be tax-exempt in Nevis, it does not mean that you can pay nothing in taxes at all. A large number of countries have CFC-related regulations today and you will have to report having a foreign company to your home country’s fiscal authorities in all likelihood. What is more, you have to report the profits that your Nevis-based company makes and pay the taxes in the jurisdictions where these profits are made. If you are a US citizen, you have to pay taxes in the USA in addition to that.
Nevis is a great place to register an offshore company because it offers a high level of confidentiality and charges no taxes in the first place. Besides, the company incorporation process is fast and simple in Nevis. At the same time, you should fully realize that you would have to pay taxes at comparatively high rates if you engaged in business operations in Nevis. Thus, yours would have to be an offshore company in the full sense of the world: registered in Nevis but conducting business operations elsewhere.