Imagine this scenario; a 5-star American restauranteur is preparing to open three new branches in different countries; she is halfway there when the COVID pandemic strikes and everything went offline. Work is halted, income stalls, but creditors keep knocking on her door.
Next thing she knows, a flurry of lawsuits come in, which is typical in the US, then her assets are frozen, she can’t pay her creditors as she has no cash flow, and she can’t continue working on the new restaurants, which leads international creditors to take legal action as well. Suddenly, a successful person who was on the brink of global prosperity is facing bankruptcy, and due to the litigious landscape of the US, there is nothing she can do but go through the motions hoping her legal team can sort it out in time, but the courts aren’t as anxious as her.
All of this could have been prevented, but only if she set out the suitable asset protection framework beforehand.
Protecting your assets abroad
Asset protection has become a key issue for the globe’s elite. As more politicians lobby wealth tax, greedy creditors look for a quick payday, and domestic financial regulations become more restrictive, the wealthy are now looking for a way to escape the chokehold suffocating the resources they worked tirelessly to amass.
However, setting up domestic asset protection tools can prove inadequate more often than not, as local courts can issue orders for payments from your company, liquifying assets, or even terminating trusts.
This is why many investors look beyond the US border in search of the best location to set up their asset protection framework, as many foreign governments do not sway under the pressure of a US court order and value their investor’s rights more than a document issued by a faraway court. Those looking to find a destination that does that and more need not look any further than Nevis.
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on offshore structures and jurisdictions that would best meet your asset protection goals.
A serene and safe space
The small Caribbean Island forms the second part of St. Kitts & Nevis, and while it is significantly smaller in size and population than its older sibling St. Kitts, it makes up for it by having one of the world’s most prominent offshore financial frameworks and robust trust legislation; making it the perfect place for establishing your asset protection network.
Consisting of just 11,000 residents, Nevis is one of the most serene places on the planet, but that serenity brings with it something much more coveted for the world’s elite who spend most of their time in the limelight- privacy.
St. Kitts & Nevis is a tax haven, one amongst many, but what sets the country apart from its tax-friendly counterparts is that it knows the rich value their private affairs and has masterfully created an environment where their personal information can be kept just that – personal.
When we talk about privacy, we don’t mean thicker shades or an absence of the paparazzi, but something much deeper, much more important; financial privacy.
The country operates on its own version of common law, but the legislation and measures in place have adapted to cater to the world’s elite. Offshore trusts, for example, are completely private, as even trust deeds are not publicly registered.
Someone trying to find out who owns a certain LLC in Nevis? They will have a torrid time doing so, as even massive leaks and hacks proved inadequate in revealing such sensitive information. In fact, in 2017, a hacker tried to leak information on 70,000 Nevisian companies, but even with their best efforts, they could not find out who owned them, but succeeded in doing so in other countries; that is the level of privacy and security we are talking about in Nevis.
So how would our elite restauranteur go about protecting her assets within the sandy shorelines of Nevis?
The ultimate asset protection framework
There is a multitude of asset protection methods; chief among them is establishing offshore trusts, offshore companies, and offshore bank accounts. Combine them, and you have yourself an asset protection framework akin to the terminator sitting atop your cash guarding it.
But how does it work? Let’s break it down a bit.
Offshore trusts
The ultimate protection against creditors, trusts have been a mainstay amongst the elite looking to keep their money away from the prying hands of the government or greedy, sue-happy creditors. Imagine trusts as a box; you, the trustor, move any assets you want into that box, and transfer ownership of the box and its contents to the trustee.
Glued to that box is a trust deed, a set of rules the trustee must follow when managing the assets. You set how much gets spent and to whom, with the “whom” being listed as beneficiaries of the trust.
Now, since you do not technically own any assets in the trust anymore, no one can take them away from you, not a creditor, not a bank, and if you open an offshore trust, not even a court.
Opening an offshore trust in Nevis grants even more protection, as Nevis trust legislation favors the trustor over the creditors. For example, say someone wants to sue your trust for a big payday. They could do that in the US, although it is still quite complicated. But in Nevis, it becomes a tedious affair.
Anyone planning to pursue any legal action against a trust in Nevis must first place a 25,000 USD bond with the St. Kitts & Nevis Ministry of Finance; that’s the first hurdle.
Secondly, the statute of limitations for any legal claims is just one year, meaning they will be racing against the clock to do the impossible. Thirdly, and most importantly, civil lawsuits in St. Kitts & Nevis hold a higher burden of proof than in the US, as the creditor must prove wrongdoing beyond any reasonable doubt, a proof burden left for criminal cases in the US.
And since Nevis’ trust legislation allows the trustor to be the beneficiary, you can set up a trust that keeps your money under your control but in a safeguarded location. Remember, if you don’t own it, they can’t take it, but that doesn’t mean you can’t.
But wait, there’s more; trusts are not taxable in St. Kitts & Nevis.
Nevis LLCs
Incorporating a company in Nevis comes with a bucket load of benefits, but we will get to that in a moment because what is really interesting to know right off the bat is how simple it is; it takes only one week, and a handful of documents and you have yourself a company on one of the most gorgeous islands in the world.
But you are not opening a company in Nevis for the corner office view, but to expand your wealth and your business empire, and in Nevis, you can do just that.
The financial sector in Nevis, boosted by the Nevis International Banking Ordinance, allows for greater freedom in dealing with funds and doing profitable business on a global stage.
American investors, for instance, face lots of restrictions in making specific types of investments, such as dealing with insanely profitable cryptocurrencies. A Nevis LLC can do that on their behalf in a heartbeat. It is worth noting Nevis trusts can also do that, but having an LLC right next to your offshore trust just makes it more dynamic.
It can also provide greater tax relief, as Nevis offers companies tax incentives galore, and there are no capital gains, withholding, or surtaxes on corporate income.
Suing a Nevis LLC comes with similar hurdles to that of suing a Nevisian trust; it is difficult, and more so when the creditor planning on taking it to court is a foreign national or entity.
Offshore bank accounts
Nevis is one of the leading places in the world to establish an offshore bank account. The island has set up an exhilarating framework for offshore banking founded upon the highest levels of security, privacy, and exclusivity.
Offshore banks do their due diligence, and even after that, they won’t just take on any client; they want the best of the best, and the service you get reflects that ideal.
Moving money, making money, and safeguarding your assets are all within the realm of the many possibilities offered by offshore banks in Nevis, as they offer standard bank services, brokerage, consultations, and more. All of that within a secure financial landscape scientifically designed to protect your assets.
The perfect combo
Creating a robust asset protection structure by combining offshore trusts, LLCs, and bank accounts in Nevis means you can secure your funds against domestic and international turbulence. If you live in a sue-happy society such as the US or Germany, that can make the difference between prosperity and bankruptcy.
If you want to take it up a notch, you can even invest in a St. Kitts & Nevis citizenship, giving you greater global mobility and a second home to act as a Plan B in case your home nation becomes too greedy with their taxes or if it faces any unwanted political turbulence.
But creating the framework in Nevis needs some forethought, as choosing the right type of trust, the best bank for your needs, and managing an offshore company in a foreign land needs some research. Luckily we at International Wealth have done that on your behalf, and you can book a free, comprehensive consultation with one of our experts to explore the best options for you and your family. All you have to do is contact us today.
