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Finance • Offshore

How to Set Up an Offshore Trust in St. Kitts and Nevis

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Breaking News: St Kitts and Nevis Raises Minimum Investment for Citizenship-by-Investment Program

St Kitts and Nevis has signed up to a new deal that’s set to shake up the Caribbean Citizenship-by-Investment (CBI) scene.

Along with Grenada, Antigua & Barbuda and Dominica, St Kitts and Nevis has signed a Memorandum of Agreement (MOA) that will raise the minimum investment required to qualify for citizenship to US$200,000 by June 30, 2024.

It remains to be seen what the knock-on effects, if any, will be for the process of setting up an offshore trust in the islands, but it’s important to be aware of the winds of change currently blowing through the Caribbean.

This significant policy shift is part of a broader Caribbean initiative aimed at upgrading regional standards and comes in the wake of international scrutiny and criticism of the security and integrity of some local CBI programs.

The four island nations maintain that the program overhaul is another significant step towards enhanced regulatory integration, transparency and the eradication of underselling – a notable concern within the industry.

The agreement addresses issues such as sharing information on CBI applicants, enhancing transparency measures, establishing a regional competent authority, setting common standards of communication and promotion, regulating agents and facilitating joint training programmes. 

That means greater security and transparency: vetting of CBI applicants will be strengthened and the four island nations will establish a shared digital portal for exchanging information on applications.

Notably, St Lucia has opted out of this price hike, though it has implemented its own extra due diligence fee of US$500. St Lucia’s stance is interesting and provides investors with an alternative to the new MOA.

We’ll continue to cover this developing story and update you on what’s clearly a significant shift in policy on CBI programs in the Caribbean. But things move quickly in this scene and there’s no guarantee St Lucia will sit this new move out indefinitely.

So, if you’re currently exploring the option of Caribbean CBI, take time to read our comprehensive guide below and get in touch.

Set Up an Offshore Trust in St Kitts and Nevis

Long before the arrival of Europeans, the indigenous people of St Kitts and Nevis – expert sailors that they were – thrived on the island’s abundant resources.

Today, the twin island nation has emerged as a regional success story, an ideal destination for businesses, entrepreneurs, and investors pursuing secure, tax-efficient, and private asset protection.

Located in the Eastern Caribbean, St Kitts and Nevis is the ideal gateway to the Americas, providing access to multiple regional markets along with excellent investment and business opportunities.

Asset protection and personal freedoms are two things that any Nomad Capitalist values. That’s why offshore trusts and second citizenships have long been part of our strategy. While establishing a Nevis international trust might not be the ideal solution for everyone, if you’re looking for an offshore trust that offers high-level protection and the utmost discretion, then St Kitts and Nevis could be the solution for you. 

Are you interested in protecting your assets, safeguarding your financial future, and getting impartial, actionable advice on estate planning matters? Talk to us about becoming a Nomad Capitalist client for the whole picture.

Why Saint Kitts And Nevis

Why St Kitts and Nevis?

There are a couple of main reasons why you should consider St and Nevis as a location for your offshore trust, but first a little look at its geography, politics and legal system.

St Kitts and Nevis is a Caribbean nation consisting of the island of St Kitts and the smaller island of Nevis. The island nation is a member of the Organisation of Eastern Caribbean States (OECS) and uses the Eastern Caribbean Dollar as currency. It’s also a Commonwealth country with a legal system based on English common law.

The Federation of St Kitts is comprised of two islands. The larger St Kitts is the administrative capital, while Nevis enjoys a degree of political autonomy, allowing it to set its own legislation. That’s important because it’s enabled Nevis to create trust structures under its own legal framework and these have grown a reputation for providing exceptionally strong levels of asset protection.

It’s worth noting that St Kitts and Nevis Citizenship by Investment is incredibly popular. That’s partly down to the CBI process taking only three months and, at the end of that brief period, presenting successful applicants with access to the entire European Union. The icing on the cake is that St Kitts and Nevis is tax-free – there’s no personal income tax on citizens or residents and no wealth, gift, or capital gains taxes. 

St Kitts And Nevis Trusts

St Kitts and Nevis Trusts

When someone refers to a St Kitts and Nevis trust, they are, in all likelihood, referring to a Nevis Trust since it specialises in these types of structures.

Nevis trusts are primarily employed for asset protection and have a reputation for being virtually impregnable, tax-exempt and highly confidential.

Since Nevis does not recognise overseas judgments, creditors must take legal action directly through the Nevis courts, which further shelters individuals from litigation. 

Naturally, this draws the ire of certain commentators, with Nevis regularly criticised by politicians and the media for its lack of transparency and cooperation.

Nevertheless, choosing to use a Nevis trust remains popular, with individuals seeking a tax-efficient and robust structure to protect assets while affording them the utmost discretion and privacy.

Nevis Multiform Foundations, established in 2004, provide a hybrid structure that offers the flexibility to form a charitable foundation, a private interest foundation, a trust or a partnership or company. The form of a multiform foundation can be changed at a later date or an existing entity can merge into another.

These chameleon-like asset protection plans are regarded as the ideal vehicle for charitable purposes, estate planning and holding special financing vehicles.

The minimum required to open a multiform foundation is US$10,000 in either property or assets. If desired, the founder can decide to include information about the foundation in the public record, but it’s not necessary. 

Nevis Trust Usage

Nevis Trust Usage

Nevis trusts are particularly appealing to high-net-worth individuals looking to shield their assets from creditors and are the perfect deterrent against predatory litigation.

Predatory litigation operates on the principle that the potential rewards far outweigh the cost of litigation. But with a Nevis trust, the costs of litigation, in terms of time and expense, are prohibitive as any or all disputes will be expected to go through a Nevis court.

A Nevis trust can also facilitate friction-free estate planning. The trust’s settlor can ensure the safe transfer of assets with little to no foreign interference or threat of legal action.

Nevis Asset Protection Trust

The Nevis Asset Protection Trust is a structure that was established under the Nevis International Exempt Trust Ordinance (NIETO) of 1994.

This allows that the settlor and beneficiary can be the same individual but both must be non-residents on the island. This also means that both parties are tax-exempt for all transactions.

There are no registration requirements beyond the trust’s name and the Trustee’s contact details. At least one Nevis Trustee must be from an entity licensed in Nevis.

Benefits Of A Nevis Trust

As we know, the primary benefits of a Nevis trust are confidentiality and asset protection and these are enshrined in legislation. 

As per the Nevis Act: ‘Any rule of law or public policy which prevents a settlor from establishing a spendthrift or protective trust of which he is a beneficiary is hereby abolished.’

Further amendments to the Nevis International Exempt Trust Ordinance (NIETO) made in 2015 provided additional layers of protection.

For example, the Nevis courts first require creditors to deposit a bond of the equivalent of US$100,000 to guarantee any legal expenses they may incur. If unsuccessful, the creditor risks forfeiting that amount while also being liable to pay the other party’s legal costs (i.e., the trust beneficiary.)

Nevis Trust Legislation

Although establishing a Nevis trust is fairly easy, they still have several laws and regulations which are important to take into consideration. Fortunately, these laws and rules work to benefit you and your beneficiaries. These include the following:  

  1. Spendthrift clauses: these work to protect beneficiaries’ assets from creditors, as guaranteed by the Nevis Act.
  2. Confidentiality: in addition to providing solid asset protection, the Act also guarantees privacy protection for individuals establishing a Nevis trust.
  3. Self-settled trusts: local law permits both parties of a Nevis trust (the settlor and beneficiary) to be the same individual while affording the same legal protections to the beneficiary.
  4. Protection: Since the Nevis trust statute does not recognise foreign judgments, creditors must subsequently go through the courts in Nevis, incurring the additional time delays and expenses that may entail.
  5. Local representation: If a creditor decides to take legal action in Nevis, they will also need to find a legal professional who is qualified to practice law in Nevis. This can be difficult since many such practitioners already represent trust companies and banks. And since contingent legal fees are not allowed, they will have to hire them on a retainer basis, thus incurring more upfront costs.
  6. Burden of proof: Under Nevis law, the burden of proof is on the creditor to prove impropriety during the proceedings. As this is carried out within the Nevis court system, which operates under a common-law framework, the onus is on the creditor to prove their case ‘beyond a reasonable doubt’.
  7. Bonds: To take legal action against trust property, the creditor must provide a bond in the amount of US$25,000.
  8. Statute of Elizabeth: This legislation is the foundation for fraudulent conveyance law, both in the United States and the United Kingdom, and it was the first of its kind. However, under Nevis trust law, it is overruled.
  9. Statute of limitations: Nevis has a short statute of limitations of 1–2 years, depending on the specific circumstances, providing a very narrow window in which a creditor can take action.

All these factors combine to provide ironclad asset protection for beneficiaries.  Indeed, according to our sources, there are, as of yet, no instances of a Nevis offshore trust being dismantled or of a creditor being successful in such cases.

Unless the island of Nevis decides to make some major changes to its legislation, that’s unlikely to change any time soon.

Nevis Trust Legislation

How to Set Up a Nevis Trust

To set up a Nevis trust, you must first have the trust legally registered with the Registrar of International Trusts.

They will require you to register the trust’s name, the trustee’s name and the trust’s registered office. You will also need to provide a statement to guarantee that your trust adheres to the Nevis International Trust ordinance.

You’ll need to pay a US$225 registration fee to the Nevis Government and your trust will be subject to an annual fee of US$220.

Remember, your trust deed/declaration does not need to be registered, so the names of the beneficiary (or beneficiaries) and settlor can be kept confidential.

Nevis Trusts and Nevis LLCs

A Nevis Limited Liability Company (LLC) is a legal entity similar to a US-style LLC but formed under the Nevis Limited Liability Company Ordinance (NLLCO). As such, a Nevis LLC cannot be held liable for the debts of its constituent members.

While the primary purpose of this structure is to conduct business when using a Nevis LLC, assets such as real estate can be held by the entity rather than owned by an individual.

By using a Nevis LLC in this way, you can, therefore, protect your assets from creditors and legal action.

Nevis trusts often use one or more Nevis LLCs as investment vehicles. The individual setting up the trust becomes the LLC manager but can later appoint a trustee, such as a Nevis law firm, to take over as LLC manager.

Nevis International Trust Law

Under Nevis International Trust Law, both settlor and beneficiary can be the same person but cannot be Nevis residents. You must also have a minimum of one trustee who can be an individual or a Nevis-registered corporation or law firm.

Trust types can be protective, spendthrift or qualified foreign trusts and can be either charitable or non-charitable.

There are no restrictions on trust property except for one notable exception: a Nevis trust can hold various types of assets but is not permitted to own any land in St Kitts and Nevis.

Should You Set Up an Offshore Trust?

Nevis offshore trusts are an ideal vehicle to protect your assets from legal duress.

Nevis trust law has several strong provisions protecting the integrity of its trusts.

Creditors hoping to gain access to assets protected by a Nevis trust must understand that foreign judgments are not upheld in Nevis. The only avenue open to them is to go to court in Nevis, using a Nevis-qualified legal practitioner on retainer.

Like many common law jurisdictions, local laws in Nevis require clear and convincing evidence with the onus on the creditor is to prove, beyond a reasonable doubt, that their claim is valid. Any failure to do so, will leave them liable to pay the legal fees of the trust beneficiary.

The prohibitive costs of such action would give any creditor cause to reflect, which is probably why we currently know of no instances of a private creditor penetrating a Nevis trust. Similarly, a settlor’s creditors can also be dissuaded in this way since Nevis trusts allow both settlor and beneficiary to be the same entity.

Finally, thanks to Nevis trust legislation, your privacy is fully respected and you are not legally required to register your trust deed – this information can be kept confidential.

Combine all these factors and you have a formidable legal structure that affords you maximum confidentiality, asset protection and overall peace of mind.

Peace of mind is a good thing as there’s a lot to consider in setting up an offshore trust:

  • What is your tax situation?
  • Where are you currently located?
  • Where do you do business?
  • Do you need to open an offshore bank account or transfer funds between foreign bank accounts?

The list of factors can be huge and the decision on how to approach the issue, ultimately depends on your personal and financial circumstances. You can hire a Nevis attorney or a law firm and ask for their opinion but since they only practice law in Nevis, they retain the prerogative to sell you a Nevis-based solution.

It’s important to remember that while St Kitts and Nevis will certainly protect you in certain situations, at Nomad Capitalist we don’t push one-country solutions – the offshore world has so many options. 

Others advisors may make everything sound simple to the point of being almost effortless but we take a slightly different approach – we don’t recommend trusts to people who don’t have a genuine need for one.

Ultimately, complete asset protection requires more than just setting up a trust and our view is everyone needs a complete holistic strategy which includes banking, asset protection, second residence and citizenship.  

At Nomad Capitalist, we take into account every aspect of your personal and business life. Then, finally, we create a personalised Action Plan that’s custom-designed to meet all your goals. 

Nevis International Trust: FAQs

How does an offshore trust work?

An offshore trust is a legal tool used for estate planning that allows an individual to have legal jurisdiction outside of their home jurisdiction, such as the United Kingdom or the United States. Trustees and other types of estate plan managers then manage the trust.

What is a Nevis purpose trust?

Purpose trusts do not have individual beneficiaries and are set up to provide funds for a specific purpose. For example, Nevis purpose trusts may be settled with charitable or non-charitable objectives, such as religion, the environment, human rights, community programs or poverty relief. 

What are the disadvantages of an offshore trust?

Offshore trusts offer many advantages but they also present some challenges, such as legal complexity and cost considerations.

Which country is best to set up a trust?

The ideal location for setting up trust depends on your priorities. Some of the most popular international trust jurisdictions include: 
St Kitts and Nevis
British Virgin Islands
Cayman Islands
Cook Islands
Cyprus
Seychelles

What is an asset protection trust?

As its name suggests, an asset protection trust is designed specifically for asset protection. In such a structure, trust assets are shielded from creditors and/or predatory litigation. Nevis specialises in international trust formation and their legislation provides a high level of asset protection. 

What does a trustee do?

A trustee acts as custodian of the assets placed within a trust and acts in a fiduciary capacity in the beneficiary’s interest. This could be a law firm or financial institution. In the case of a Nevis international trust, this can be a Nevis attorney or firm who can help create the trust and manage the settlor’s estate. 

What is a Nevis LLC?

A Nevis LLC (Limited Liability Company) is a type of corporate entity similar in structure to a US LLC. They are often used in conjunction with Nevis trusts for asset protection purposes.

Put Your Trust in Us

Armed with this knowledge, consider whether an offshore trust in St Kitts and Nevis sounds like a good option for you.

Are you tired of constant government intrusion into your finances and the movement of your money? Are you concerned about falling victim to over-zealous creditors seeking to take your wealth?

Fortunately, St Kitts and Nevis offers an ideal safe haven for your wealth and provides a curtain of privacy that prevents unwanted eyes from spying on your business. With the constant buzz around the creation of Central Banking Digital Currencies (CBDCs) and increased cryptocurrency regulation, it’s fair to assume that the government wants more control over your money.

Our team at Nomad Capitalist specialises in helping our clients establish offshore trusts and move their wealth to a safer environment. We create holistic plans tailored to your individual needs and desires to help you gain more freedom and go where you’re treated best. Contact us today to get started.

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