The biggest portal about international asset protection and diversification

icon-skype-png icon-telegram-png icon-viber-png icon-whatsapp-png

The biggest portal about international asset protection and diversification

+507 848 3045
+44 7700 304814
+372 5 489 53 37
+381 6911 12327

Nevis: What to Know About This Offshore Jurisdiction. Complete Guide for 2024

A pocket-sized yet important island in the Caribbean, Nevis has become a top choice for businesspeople and investors in search of company setup overseas. As part of the federation that also includes the neighboring island of St. Kitts, Nevis shares many common laws with the latter. However, Nevis stands out because of its own parliamentary assembly, with the power to make laws in certain domains.

With its favorable economic policies and strong privacy laws, Nevis is a magnet for entrepreneurs from all over the globe. Its local currency, the Eastern Caribbean dollar, is pegged to the US dollar, adding to its business-friendly environment.

Nevis

Nevis is recognized as an offshore haven and maintains a clean status as it is not on any FATF or EU blacklists. This reflects the jurisdiction’s compliance with international regulations. Registered companies in Nevis benefit from advantageous tax conditions, such as exemptions, which are among the many advantages offered by the jurisdiction.

Below, you will find our in-depth guide to Nevis. It is an invaluable resource for anyone looking to set up an offshore company overseas.

Understanding the economy of Nevis

Since gaining independence from Britain in 1983, the Federation of St. Kitts and Nevis has maintained a democratic system based on English law.

While Nevis’ economy is actively growing, it’s still relatively weak compared to other countries. The government is addressing this issue by boosting tourism and encouraging foreign investment, which creates a favorable climate for business and new company formations. Nevis, in particular, is working hard to move beyond its colonial past, a journey that will take some more time. The reason behind this is simple: high external debt, expensive property, and a lack of economic variety make the task ever more challenging.

The federation’s GDP, however, is growing each year. Tourism is now a major component of the local economy, making up about a third of the GDP. The construction and light industry sectors are also getting bigger as the country moves away from agriculture. The economy has felt the impact of COVID-19 and is at risk from natural disasters, but government actions are helping the nation deal with these challenges and keep developing.

It is due to these perks that businesses find Nevis an attractive offshore destination:

  • Tax Incentives: Nevis offers substantial tax benefits to international companies, boosting their profitability and financial operations.
  • Confidentiality: Authorities in Nevis have found a middle ground that meets FATF standards while protecting the privacy of offshore companies and their proprietors.
  • Global Compliance: Nevis’s adherence to FATF/OECD guidelines improves its international standing and guarantees that the jurisdiction meets global regulatory expectations.
  • Flexible Structures: The legal system in Nevis allows for a variety of company structures with customizable management and ownership, which gives business owners significant control over their entities.
  • Asset Protection: The jurisdiction comes with strong regulations for protecting assets, which support the establishment of trusts, foundations, and offshore companies.
  • Registration and Maintenance Simplicity: The process of registering a company in Nevis is clear and efficient, and it contributes to its appeal for business formation.
  • Business-Friendly Legislation: Nevis has enacted laws that support business growth, offer advantageous banking and international business conditions, and have optimized residency and citizenship processes.

The jurisdiction of St. Kitts and Nevis comes with various investment routes to obtain citizenship. Options include a minimum investment of USD 250,000 in special-purpose funds or a real estate investment starting at USD 400,000 in government-approved projects. Both pathways require a comprehensive background check and are subject to government charges. Need detailed guidance? Book a personal consultation with International Wealth specialists!

sign
OFFSHORE COMPANY
FREE EXPERT CONSULTATION

information from an expert on taxes
and possible tax benefits of the jurisdiction
appropriate to the company's structure.

oinformation from an expert on taxes and possible tax benefits of the jurisdiction appropriate to the company's structure.

We’ll contact you in 10 minutes

Legal environment and tax policy

Offshore jurisdictions certainly differ from traditional midshores, and Nevis is a prime example of this. With its specialized economic policies, legal systems, and focus on a niche market of business professionals, Nevis is nothing like such huge economic centers as Singapore or Hong Kong. 

It pays to keep in mind that offshore business models have transformed a lot lately. The ease with which tax-free nations were used for illicit financial activities and tax reduction in the 1980s is no longer possible, thanks to stringent modern regulations.

In response to the global shift towards deoffshorization, jurisdictions once known as classic offshore havens are largely compelled to implement new regulations to align with financial regulatory standards. As a result, the following measures have been introduced:

  • compulsory accounting
  • mandatory disclosure of beneficiary information in official registries
  • stricter banking policies
  • increased limitations on aggressive tax optimization.

At present, numerous jurisdictions offer advantageous tax conditions that align with global standards, along with extra incentives for businesses that register with them. Nevis exemplifies these benefits. It’s an ideal choice if you want to run your business with integrity and transparency, while also taking advantage of legal tax-saving opportunities.

With a history of more than 35 years as an international financial hub, Nevis is a jurisdiction that enjoys both economic and political stability. It boasts state-of-the-art infrastructure and benefits from the absence of currency control, along with accommodating and adaptable legislation. Famous for its hospitality, Nevis is also recognized for welcoming innovation and progress.

Although St. Kitts and Nevis are often mentioned together, some experts still recommend St. Kitts for offshore company registration. However, please keep in mind that Nevis boasts a more developed offshore industry.

Applicable laws

Below, you will find the laws that govern business activities in Nevis:

The Federation has entered into Tax Information Exchange Agreements (TIEAs) with 24 countries and 13 Double Taxation Avoidance Conventions with the following nations:

  • Antigua and Barbuda
  • Barbados
  • Belize
  • Dominica
  • Guyana
  • Grenada
  • Monaco
  • San Marino
  • Saint Lucia
  • Saint Vincent and the Grenadines
  • Trinidad and Tobago
  • Switzerland
  • Jamaica.

Key features of the local tax system

When one sets up businesses in Nevis, the main practical challenge is to pick the right organizational and legal structure for them. You have 2 options: an LLC or a BC (IBC). Each has its pros and cons, so it’s important to carefully analyze all the information before you make that final decision. A random choice might not be a disaster, but it could limit your business’s potential. To make sure you create a successful and efficient company, go over all the important details with International Wealth experts.

Many agencies and websites claim that the Federation offers complete tax exemption, assuring you there are no taxes here at all. Yet, this is not entirely accurate. If it were so, the offshore state would likely be on the Financial Action Task Force (FATF)’s blacklist of non-cooperative jurisdictions.

In the Federation, zero taxation is achievable for citizens and registered companies that satisfy certain criteria. However, it’s not correct to say Nevis has no taxes at all. The country does have taxable activities within its territory, with the tax rates depending on the type of income. This allows international companies and their beneficiaries to use legal tax reduction strategies to optimize their tax obligations.

We would like to draw your attention to the fact that non-resident entities in Nevis are exempt from taxes on income generated abroad. Although these businesses are not permitted to operate in Nevis, they are granted complete exemption from corporate and income taxes for their commercial activities conducted outside the jurisdiction.

This is what the taxation for companies in the country looks like:

  • Resident Companies: Taxed on their worldwide income.
  • Dividend Income: Taxed as regular income when received from another resident company.
  • Capital Gains: Taxable only if assets are sold within one year of purchase.
  • Interest and Royalties: Exempt from corporate tax when derived from local government or CARICOM sources.
  • Withholding Tax: May apply in certain situations at 15%.
  • Corporate Income Tax (CIT): Standard rate set at 33%.
  • Non-Resident Entities and Foreign Company Branches: Taxed at 33% only on income sourced within the Federation, while foreign income is exempt.
  • Tax Exemptions: Available for up to 15 years, with potential for CIT rate reduction to 1% or a switch from profit tax to a licensing fee.

Historically, companies established as International Business Corporations (IBCs) benefited from favorable conditions. An IBC is a firm that, although registered under the Companies Act and the Nevis Business Corporation Ordinance, conducts its operations abroad. Such entities are prohibited from transacting with local residents, and they may do business exclusively with non-resident clients.

International Business Corporations do not have the right to own property in the country and participate in banking, insurance, fund management, or collective investment schemes. Previously, companies exempt from local operations or those conducting business exclusively with foreign entities were not subject to taxation. This exemption has been discontinued for new companies, which are now taxable under current laws, although certain exemptions may apply.

Nevis: its drawbacks as an offshore jurisdiction

Nevis does come with a range of business advantages. Here belong tax benefits, asset protection, and privacy. However, it also comes with certain limitations that you should keep in mind:

  • Industries like banking and financial services may face restrictions or require licenses, which could limit your business prospects.
  • The island’s international reputation might not be as strong as that of other offshore or mid-shore states, including Hong Kong and the UAE.
  • Due to its modest size, Nevis might offer limited opportunities for international trade and market access compared to larger regions.

Despite these factors, the jurisdiction’s significant benefits for international business people often surpass its potential limitations.

IBC registration in Nevis: things to consider

To register an International Business Corporation in Nevis, you will require the services of a licensed registered agent. 

These are the essential requirements for such an IBC:

  1. The corporation’s name can be reserved.
  2. The Memorandum of Association must contain the integral components listed below:
    1. The corporation’s name and a certified translation thereof.
    2. A declaration of registration compliant with the current Ordinance.
    3. Information on the corporation’s succession, if it is not perpetual.
    4. The corporation’s purpose.
    5. The registered agent’s name.
    6. The corporation’s registered office address in Nevis.
    7. The total number of shares the corporation is entitled to issue.
    8. The names and addresses of the corporation’s directors
    9. The names and addresses of all shareholders, irrespective of nationality.
  3. The Articles of Association require the incorporators’ signatures.
  4. The corporate secretary may be an individual or another corporation.
  5. Any alterations in beneficial ownership, shareholders, directors, or officers must be recorded by the Registered Agent.

Prospective IBC registrants must appoint a registered agent who is officially licensed in Nevis and has a registered office on the island, which also serves as the corporation’s registered office as per the corresponding legal requirements.

Conclusion

Before you proceed with registering an overseas business, it’s utterly important to thoroughly analyze the benefits and drawbacks associated with its goals and the specific requirements applicable to it. Please note that International Wealth experts are always on hand to offer their assistance and recommendations on these matters as well as the necessary legal support throughout the entire process of setting up a company or trust in Nevis.

Need a consultation?
Please help us make the portal even more informative, up-to-date, and valuable for you and your business.

Your email address will not be published.