The World’s Strongest Asset Protection Laws (and Second Passports, Too)

The World’s Strongest Asset Protection Laws (and Second Passports, Too)

By Mark Nestmann • January 15, 2019

Jessups, Nevis: I’m writing these words as I listen to the gentle lilt of the tree frogs outside my villa 1,000 feet up the slopes of Mount Nevis. I’m here attending to matters relating to Fortress Trust Ltd. with my business partner, Trey Wyatt.

Nevis is part of the Federation of St. Kitts & Nevis. Former colonies of Great Britain, these sister islands have been independent since 1983.

Trey and I formed Fortress in 2015 to create and administer Nevis trusts, LLCs, and corporations. We’re also licensed to submit applications under the St. Kitts & Nevis citizenship-by-investment program.

In the last two years, owners of companies registered in the European Union, the British Virgin Islands (BVI), the Cayman Islands, and other nations have flocked to Nevis. They’re attracted to some of the world’s strongest asset protection laws. Not to mention the fact that Nevis doesn’t require the disclosure of the identities of beneficial owners of entities formed here to the public or the government.  

Increasingly, that’s not the case in other countries. For instance, in 2016, the UK enacted legislation that requires all UK-registered private company to disclose the identities of "people with significant control" over the entity to the UK government. That information is now available to the public.

The UK has forced its overseas territories to follow its example. By 2020, the 14 territories have to establish public business registries. That includes the BVI, which has more than 500,000 companies under management, and the Cayman Islands, with 100,000 companies registered. Currently, ownership data submitted to the regulatory authorities of British overseas territories need not be kept in a public register. But the fact that the register exists at all is a honeypot for identity thieves, kidnappers, and worse.

Nevis has no such requirement. While registered agents such as Fortress must identify the beneficial owners of any entities it creates or for which it serves as registered agent, this information need not be shared with any government agency. Indeed, the only way we can be forced to disclose ownership information is if we’re ordered to do so by a local (not foreign) court or other local competent authority.

Financial privacy is only one of many advantages of doing business in Nevis. For instance, the Nevis LLC is one of the world’s most flexible and protective international business entities for several reasons:

  • Judgments outside Nevis against Nevis LLCs or their members (owners) or managers aren’t automatically enforced. To obtain a judgment, a creditor must retain a Nevis attorney, who under local rules may not work on a contingency basis. The creditor must also post a cash bond to cover any damages or court costs the debtor may be awarded. Nevis is also a “loser pays” jurisdiction: The prevailing party is generally entitled to have its legal fees reimbursed by the loser.

  • The “charging order” is the exclusive creditor action permitted against Nevis LLCs. An LLC shields assets from claims against its members by limiting the legal remedies available to creditors. In Nevis, the only legal remedy is for a creditor to get a charging order from a local court. This order gives a creditor the right to receive only future distributions made from the LLC to the liable member. Creditors can’t force the LLC to liquidate, nor can they seize the interests of the liable member.

LLCs formed in the US also have charging order protection. However, creditors of domestic LLCs – especially if the LLC only has one member – may be able to foreclose on the owner’s membership interest or seize assets the LLC owns. These exceptions don’t exist in Nevis. And because US judgments aren’t enforced in Nevis, charging order protection in Nevis is stronger than in any US state.

  • Enhanced burden of proof is required to assert fraudulent transfer claims. Challenges to asset protection often focus on the legitimacy of transfers into a protected structure such as an LLC. If a creditor can demonstrate that you transferred assets in order to “hinder, delay, or defraud” a creditor, a court can void that transfer. Under Nevis law, the transfer of assets to an LLC is not considered a fraudulent transfer if you receive an equivalent interest in the LLC. Your registered agent needs only to make a valid transfer of organizational rights to you to defeat a fraudulent transfer claim in Nevis. This is true for both single-member and multiple-member LLCs. What’s more, the Nevis LLC ordinance requires proof “beyond a reasonable doubt” that the transfer was fraudulent. That’s a much higher burden of proof than most US states require.

  • No taxation in Nevis. There is no taxation in Nevis on a Nevis LLC that generates profits outside St. Kitts & Nevis.

As if the ultra-protective legal entities available on this island paradise weren’t enough, St. Kitts & Nevis also has the world’s oldest continuously operating citizenship-by-investment program.

There are three options:

  1. A contribution to the Sustainable Growth Fund (SGF). The cost for an individual applicant is $150,000 for an individual; $175,000 for a married couple; and $195,000 for a family of four.

  2. An investment of $200,000 in an approved real estate project, plus $75,000 government fees. You can sell this investment after seven years

  3. An investment of $400,000 in an approved real estate project, plus $75,000 government fees. You can sell this investment after five years.

St. Kitts & Nevis passport holders can travel without a visa or obtain a visa upon entry to nearly 150 countries, including all 28 members of the European Union.

In these uncertain times, could you benefit from a Nevis entity or a St. Kitts & Nevis passport? Get in touch to learn more.

Protecting your assets (and yourself) against any threat - from the government, the IRS or a frivolous lawsuit - is something The Nestmann Group has helped more than 15,000 Americans do over the last 30 years.

Feel free to get in touch at service@nestmann.com or call +1 (602) 688-7552 to learn how we can help you.

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About The Author

Since 1990, Mark Nestmann has helped thousands of clients seeking wealth preservation and international tax planning solutions. He is the author of highly acclaimed Lifeboat Strategy and other books & reports dealing with these subjects.

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