Nevis Table of Statutes

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- Nevis Table of Statutes
- Nevis Banking Law
- Nevis Insurance Law
- Nevis Trust Law
- Nevis Investment Fund Legislation
- Nevis Anti-Money Laundering Legislation

Nevis Table of Statutes

This is a non-exhaustive list of the main Nevis statutes affecting offshore and non-resident business. The statutes are listed in alphabetical order – click on the statute for a fuller description of the statute, the legal regime it forms part of, or in some cases the text of the law.

• Nevis Business Corporation Ordinance, 1984
• Nevis Business Corporation (Amendment) Ordinance, 2009
• Nevis Captive Insurance Companies Act 2006
• Nevis Insurance Act 2009
• Nevis International Exempt Trust Ordinance, 1994
• Nevis International Insurance Ordinance, 2004
• Nevis International Insurance (Amendment) Ordinance, 2006
• Nevis International Insurance (Amendment) Ordinance, 2009
• Nevis International Mutual Funds Ordinance, 2004
• Nevis Limited Liability Company Ordinance, 1995
• Nevis Limited Liability Company (Amendment) Ordinance, 2009
• Nevis Multiform Foundations Ordinance, 2004
• Nevis Offshore Banking Ordinance, 1996
• Trusts Act 1996 (St. Kitts and Nevis)

Under the St. Kitts and Nevis Financial Services Order, 1997, which imposed a licensing and supervisory regime for all offshore financial services businesses, the National Assembly established a Financial Services Department headed by a Director General, whose responsibilities include monitoring the financial sector and examining the affairs or business of any authorized person to make sure of compliance with the law and determining whether the person being investigated is in a sound financial position and carrying on business in a satisfactory manner.

The Nevis International Insurance Act was passed in July 2004. The Nevis Mutual Funds Ordinance was enacted on November 16th, 2004. The Multiform Ordinance allows among other features for the transformation of a trust into a foundation and for consolidation of entities.

Two bills strengthening the jurisdiction's offshore legislation were passed into law by the Nevis Island Assembly at its meeting on January 26, 2009. These amended the Nevis Limited Liability Company Ordinance and the Nevis International Insurance ordinance.

Speaking after the bills' adoption, Legal Advisor to the Nevis Island Administration, Patrice Nisbett told the Department of Information that the amendments to the International Insurance Ordinance tightened some issues in the legislation surrounding reinsurance companies’ share capital: “[The previous legislation] created certain confusion in the sector. We sought to deal with that confusion by specifically amending the section which dealt with the issue of share capital for re insurance companies, and lowered the threshold requirement from $200,000 to $75,000," he said.

It is intended that the changes will ultimately make the jurisdiction more competitive. Speaking on the amendments made to the Limited Liability Ordinance, Nisbett explained what parliament sought to address: “We were putting in place a provision for a prescribed fee for persons who wish to search the register of limited liability companies. Also when foreign companies or foreign limited liability companies wish to re-domicile in the jurisdiction of Nevis, the Nevis Island Administration after consultation with the service providers came to a consensus, whereby they had indicated to us that they would wish that at least a 60-day period in terms of a certificate of good standing should be made available to the Registrar of Companies,” he said.

It would be mandatory for that particular company wishing to domicile in Nevis to provide the Registrar of Companies with a certification from the original jurisdiction stating that the company now wishing to re-domicile in Nevis no longer existed in that foreign jurisdiction. The legislation also requires certain prerequisites or obligations of the foreign company wishing to redomicile.

Another bill enacted in 2009 was the Nevis Business Corporation (Amendment) Ordinance 2009, which introduced a provision that deals with the protection of minority shareholders of corporate structures.

Commenting on the situation prior to this amendment coming into force, Nisbett explained: “The legislation as it stands now has no protection to deal with the issue of oppression by the majority shareholders upon minority shareholders, so in our jurisdiction we have sought to put in place a provision to deal with this eventuality. We have had a number of instances in our jurisdiction, the complaint has been made to us and we have listened, we have now drafted a provision that we feel is a balanced provision and its reflective of the situation.”

“We believe that when this piece of legislation is eventually passed it will correct the necessary defect that is existing in this particular legislation with regards to the issue of minority holders versus majority shareholders and the effect that they may have in terms of winding up and existing entity."

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Nevis Banking Law

Nevis has its own Offshore Banking Ordinance 1996 (as amended), which defines offshore banking as follows:

• Receiving of foreign funds through the acceptance of foreign money, deposits payable upon receipt demand or after a fixed period or after notice;
• The sale or placement of foreign bonds certificates, notes or other debt obligations or other securities, or
• Any other similar activities involving foreign money or foreign securities, and
• Either in whole or in part using foreign funds so acquired for loans, advances and investments whether in Nevis or elsewhere.

Licences under the Banking Ordinance are issued to eligible companies or qualified foreign banks. An eligible company must be a wholly owned subsidiary of a local bank regulated by the Eastern Caribbean Central Bank that is licensed under the Banking Act to do business in Nevis. A qualified foreign bank is a foreign bank that is licensed under the Banking Act, or is a foreign bank with minimum capitalization and assets, as prescribed by the Minister, that is not licensed under the Banking Act but is licensed to do domestic banking in its jurisdiction of incorporation.

An eligible company must be incorporated under the Companies Act as a company limited by shares, and must have objects or business activity restricted to offshore banking from within Nevis. It must have at least one director who is a citizen of St. Kitts and Nevis with a residence in Nevis. The minimum Authorised Capital must be at least ECD2 Million, of which not less than ECD1 Million has been subscribed and paid up in cash, such cash being deposited in an account maintained by the Permanent Secretary at the Eastern Caribbean Central Bank.

Not later than four months after the close of its financial year, a licensee must forward to the Permanent Secretary copies of its balance sheet and profit and loss account and the full and correct names of the directors of the licensee. The balance sheet and the profit and loss account must bear on its face the certificate of an auditor.

The Minister may by order exempt a licensee in respect of its business from all or so much of any duty payable under the Customs Act in respect of any goods imported by the licensee in respect of its business as the Minister deems expedient, if the licensee in respect of its business satisfies the Minister that the goods concerned are not being made or manufactured in Nevis, are essential as equipment or fixtures for doing business from within Nevis and are not merely goods that will be used up or expended in the ordinary course of business.

Where the Minister is satisfied that a licensee must use the services of specially qualified persons in order to do its business effectively from within Nevis and that (a) it is unable to acquire those services in Nevis, and (b) it is unable to retain or hire those services from outside Nevis without special tax benefits being made available the Minister may authorise an offshore benefit provision for the employment of those specially qualified persons.

An offshore benefit provision is one whereby a prescribed percentage of an employee's or contractor's salary or fees from a licensee (a) is exempt from any duty or tax in Nevis; (b) may be paid in a foreign currency; (c) may be paid in some other prescribed manner in another currency or otherwise; notwithstanding the provision of any other law to the contrary.

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Nevis Insurance Law

In July, 2004, the Nevis Ministry of Finance and Development announced the passage of the Nevis International Insurance Ordinance. The ordinance is divided into six sections, and provides for the licensing and regulation of general insurance, captive insurance and reinsurance companies. It is compulsory for insurance companies to have a physical presence in Nevis, whether via a resident manager or a fully trained registered agent, with adequate knowledge and experience of the insurance industry.

In 2006, lawmakers on Nevis approved an amendment to the jurisdiction's insurance law that clarified and tightened up certain sections of the legislation to combat fraud. The Nevis International Insurance (Amendment) Ordinance, 2006 updated the Nevis International Insurance Act of 2004, and, according to then Premier Vance Amory, was drafted to "eliminate loopholes which could be exploited by persons who do not really care what they do in international business."

The International Insurance Ordinance was further amended in 2009 to address some issues in the legislation surrounding reinsurance companies’ share capital.

In June 2006, St. Kitts and Nevis passed a captive insurance law, known as the Captive Insurance Companies Act 2006. According to Prime Minister and Minister of Finance Denzil Douglas, the new captive insurance vehicle will be "extremely competitive", with low licence fees for small captives.

There is a license fee of ECD8,100.00 for the year of registration and a renewal fee for each year thereafter of ECD8,100.00.

However, the licence fee for a 'small captive insurance company' is ECD2,160.00 for the year of registration and ECD2,160.00 annually thereafter. A 'small captive insurance company' means a captive insurance company with annual net written premiums, or, if greater, direct written premiums, not exceeding ECD4,050,000.

A small captive insurance company may apply for a license in a prescribed simplified form. See Offshore Business Sectors for a more detailed summary of the captive insurance legislation.

Nevis enacted new insurance legislation in 2009.

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Nevis Trust Law

Nevis offshore trusts are formed under the Nevis International Exempt Trust Ordinance of 1994, as amended to September 2000. The Trust Ordinance includes special provisions to enhance the use of Nevis as a preferred jurisdiction for the establishment of Asset Protection Trusts.

Highlights of the Trust Ordinance include:

• Exemption from all forms of Nevis taxation and exchange controls provided that transactions take place only with non-residents;
• The trustee may be either a trust company licensed to do business in Nevis or a company incorporated under the Corporation Ordinance;
• The proper law may be the law of Nevis or the law of another jurisdiction;
• The rule against perpetuities does not apply; Forced heirship rules are specifically excluded; Spendthrift and charitable trusts are permitted;
• There is a USD25,000 bond requirement prior to the commencement of an action or proceeding against trust property;
• There is no registration requirement other than for the Trust's name, name of Trustee and the registered office address;
• Settlor and Beneficiary must be non-residents and may be the same person;
• One trustee must be a Nevis offshore company or a trust licensed company;
• Protectors are allowed for and may be the same person as the Settlor and Beneficiary of the Trust;
• An IET is valid and enforceable notwithstanding that it may be invalid according to the law of the Settlor's domicile or residence or place of current incorporation;
• The Trust is not considered fraudulent if settled up to 2 years after the date of the creditor's cause of action;
• The creditor must prove the intent of the debtor to defraud with "clear and convincing" evidence;
• The Statute of Queen Elizabeth is excluded.

The Nevis registrar maintains a register of international trusts and a register of qualified foreign trusts. Where a trust provides for the law of Nevis to be the governing law of all or any aspects of that trust an application for entry on the register as an international trust shall be made to the registrar within 45 days of the date on which the trust is created, settled or established. Where a trust provides for the law of a jurisdiction other than the Island of Nevis to be the governing law of all aspects of that trust an application for entry on the register as a qualified foreign trust shall be made to the registrar within 45 days of the date on which the trust is created, settled or established. An application for registration should be accompanied by notice of the name and registered office of the trust, a certificate from a trustee company, a barrister or solicitor certifying that the trust upon registration will be an international trust or a qualified foreign trust, the date on which the trust was created, settled or established, and in the case of a qualified foreign trust, the law under which the trust was settled. Registration has to be renewed annually.

The register is not open for inspection except that a trustee of a trust may in writing authorise a person to inspect the entry of that trust on the register.

A trust registered under the Nevis Ordinance is exempt from all income tax, all estate, inheritance, succession and gift tax payable with respect to the trust property by reason of any death, stamp duty with respect to all instruments relating to the trust property or to transactions carried out by the trustee on behalf of the trust, and all exchange controls.

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Nevis Investment Fund Legislation

Investment funds may be formed in Nevis under the Nevis International Mutual Funds Ordinance 2004. A mutual fund is defined under the Ordinance as a company incorporated, a partnership formed, a unit trust organized or other similar body formed under the laws of Nevis or any other jurisdiction which collects and pools investor funds for the purpose of collective investment.

The definition includes umbrella funds whose shares are split into a number of different classes of funds or sub-funds. It also includes a fund which has one or more investors which are mutual funds not registered or recognized by the Ordinance.

The Ordinance divides mutual funds into three classes:

• Public Funds, offering shares or units to the general public and which are required to be registered;
• Private Funds, offering shares on a private basis with no more than 50 investors and which are required to be recognized by the Minister of Finance upon proof that it is lawfully constituted; and
• Professional Funds, available only to professional investors with an initial investment of not less than USD100,000. These are also required to be recognized by the Minister of Finance, but can be fully operational for a period of 14 days without being recognized under the Ordinance.

The Ordinance allows a licensed or recognized mutual fund of an approved jurisdiction to be continued or redomiciled in Nevis. Also, Managers or Administrators who are not resident or domicile in Nevis and who are authorized to provide services under the laws of a recognized jurisdiction may operate from within Nevis after receiving written permission from the Minister of Finance.

The Nevis International Mutual Funds Regulations 2007 set the annual licence renewal fee at USD300 for Public Funds and USD200 for Private Funds and Professional Funds. The 2007 Regulations have allowed mutual funds to register in Nevis since 1st January, 2008.

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Nevis Anti-Money Laundering Legislation

After St. Kitts and Nevis was listed by the FATF as a tax haven which was uncooperative in fighting money laundering, the government passed the Money Laundering (Prevention) Act 2000, the Financial Services Intelligence Unit Act 2000, the Proceeds of Crime Act 2000 and the Financial Services Commission Act 2000. The latter Act intends to establish the Financial Services Commission as the main regulatory body for the offshore sector. In June 2002, St. Kitts and Nevis was removed from the FATF blacklist.

Subsequent legislation has included Anti-Money Laundering Regulations 2002, and the Financial Services (Exchange of Information) Regulations 2002, and the Anti-Money Laundering Regulations 2008.

On 4th June, 2008, Minister of State in the Ministry of Finance, Senator Nigel Carty introduced the Payment Systems Bill, the Bills of Exchange (Amendment) Bill, the Financial Services Commission (Amendment) Bill and the Financial Intelligence Unit (Amendment) Bill. Minister of National Security, Dwyer Astaphan introduced the Anti-Terrorism (Amendment) Bill at the same sitting of the National Assembly.

The Payment System Bill establishes a comprehensive legislative framework governing the establishment, maintenance and functioning of the payment system operated by the St Kitts-based Eastern Caribbean Central Bank (ECCB).

The Financial Services Commission (Amendment) Bill increases the efficiency of the Financial Services Commission by endowing the Commission with powers to impose sanctions on financial institutions that are acting in a manner that violates safe prudential practices, as set out in the Proceeds of Crime Act, the Anti-money Laundering Regulations, the Anti-Terrorism Act or similar legislation.

The amendment to the Financial Services Intelligence Unit Act expanded the jurisdiction of the unit to encompass the financing of terrorist activities, and enables the Unit to liaise with competent authorities and agencies in combating the financing of terrorism, in addition to the collaboration that is now undertaken with money laundering intelligence agencies.

The amendment to the Bill of Exchange Act, modernizes the principal 1887 Act with some critical provisions which set out alternative means of presenting a cheque, including electronically, that enables a transaction to be performed by way of electronic notification of the essential elements of the cheque.

The amendment to the Anti-Terrorism Act corrects an omission in the original bill by providing for the mental element of the offence of engaging in money laundering for terrorist purposes.

Another amendment introduces an alternative to forfeiture where forfeiture of property seized from terrorist activities is not possible.

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