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St. Kitts & Nevis

 
   

Executive Summary
Both islands form a federation in the Caribbean Sea that covers the surface of 261 sq km, and its population is 40,000 inhabitants. The capital is Basseterre and it is situated on the territory of St. Kitts. The English speaking country is neither a Crown dependency nor a British Crown colony that lets it avoid EU’s Savings Tax Directive. However, its legal system is based on English Common Law.

Main economic activities are tourism, agriculture (sugar), as well as offshore financial services (in particular banking). While St. Kitts is concentrated on industrial and touristic development, Nevis focuses on the offshore market segment growth. Legislation of the Federation is in line with OECD and FATF principles.
The national currency is East Caribbean dollar.

Geography
Being situated in the Caribbean Sea the exact position of the islands can be defined as being at about one/third away from Puerto Rico on the way to Trinidad and Tobago. 

The climate is tropical and tempered by sea breezes and there is insignificant variation between seasons. Both volcanic islands have a very spectacular mountainous landscape. The way to the peaks of the mountains are covered by jungles, population prefers to live near the sea shore. Many small rivers fall from the mountains, and there is even one lake in St. Kitts.

Map, Flag and Coat of Arm

 


Types of Company

It is important to underline, that being a Federation, Nevis has a large autonomy and it has chosen to practice its own offshore legislation. Entrepreneurs may choose whether they want to follow the Federation or Nevis local rules for the purposes of company incorporation, while in St. Kitts it is only possible to incorporate a company following the Federation regulations.

Private Company (Federation)
At least one shareholder and a maximum number of 50 shareholders should be registered in this type of company, however, it is also possible to issue bearer shares. At least one director and a secretary should be appointed. There are no requirements for annual returns, and words “Limited” or “Corporation” or their abbreviations are necessary to be present at the end of a company name.

Such a company can be limited by shares – it is required to state the maximum share capital of a company and its value expressed in any currency.  A company limited by guarantee is required to state the exact number of registered members and the amount of guarantee the value of which can be shown in any currency.

Public Company (Federation)
This company should have more than 50 members and at least three directors, at least two of which should not be employed by this or related companies. A company may offer its shares to the general public. Holding an Annual General Meeting is an obligatory requirement.

Exempt Private Company (Federation)
This company follows precisely the regulations of a Private Company (please see above), but pays no taxes in case it conducts business exclusively with non-residents of St. Kitts and Nevis. Information on the company is kept in the public register, but it is available only to the governmental officers.

Limited Partnership (Federation)
There should be at least one general and one limited partner to form a limited partnership.  A partner can be either a private or a corporate person and the same entity can be a limited and a general partner at the same time.

A declaration of the partnership incorporation should be submitted to the registration authority. A limited partner can contribute to the structure in money or other assets, as well as in personal services, and it is not liable to the company debts for the capital exceeding its investment, unless it actively participates in the partnership management, thus executing a general partner’s role. A registered office should be situated in the federation where the register of limited partners is kept.

Exempt Limited Partnership (Federation)
These organizations are exempt from all the taxes if they do not conduct any business activity with the Federation residents.

Trust (Federation)
Both a settler and a trustee can be beneficiaries of a trust, and in order to be exempt from taxes, a trust should make all the transactions with non-resident entities. There should be a registered office in the Federation and at least one trustee should be either the Federation resident or it should conduct the business from there. Trust accounts do not have to be audited and the perpetuity is of 100 years.

International Exempt Trust (Nevis)
This structure has been introduced in 1994 to enhance the use of Nevis Asset Protection Trusts, as it offers the wide range of advantages.

Limited Liability Company (LLC) (Nevis)
No taxes are paid on income generated outside Nevis. Members can be representatives of any nationality, as private as corporate persons. It is possible for an LLC to have only one member. Foreign LLCs can be re-domiciled to Nevis, where no submission of annual returns is an obligatory requirement.

International Business Company (Nevis)
This is an appropriate structure for a holding or an investment company. There is no minimum capital required and a company is totally exempt from taxes. Shelf companies can be available. Bearer shares must be hold by a custodian. There does not have to be a registered office, but it is an obligatory requirement to have a registered agent. Only the information on a registered agent and Articles of Association is available to the wide public. Annual returns do not have to be submitted

Multiform Foundations Ordinance (Nevis)
This structure has been introduced in 2005, which is a legal entity that can design the most appropriate form for itself choosing between company, partnership, trust or an ordinary foundation. With the help of the Multiform Foundation structure, its form can be easily changed during its existence period, providing a high level of flexibility to the management. Any organization, be it a local or a foreign structure, can transform into a Nevis Multinational Foundation receiving all the benefits this structure is able to provide. It is particularly used for estate planning, financing, charity as well as investment holding purposes, ensuring a good balance of transparency and confidentiality together with good governance.

Taxation

Personal
There is no income tax in St. Kitts and Nevis. Nationals of other countries are required to obtain a work permit. VAT of 18% is applied to individuals and companies. Individuals are liable to social contribution at not more than 10% on salary, but maximum monthly contribution is US$ 6,500.

Corporate
Income and withholding tax is applied to companies conducting a business activity on the jurisdiction territory, but companies are not liable to any tax if their transactions are made solely with non-resident entities. Moreover, there is no worth, gift, turnover, sales taxes or estate duty.

Capital gain tax of 20% is applied to transactions related to the assets of St. Kitts and Nevis.
10% of withholding tax is deducted from profits, administration, rent, royalties and other fees remitting payments to entities outside the jurisdiction. Property and import taxes are applicable.

 
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