Looking to save some money? It might be time to consider taking that money offshore.

By now, you’ve likely heard of offshore business accounts. Opening an account is a useful strategy that can save you big money when it comes to taxes.

That is especially true for people in the midst of offshore company formation.

But it’s important to understand the basics before opening an offshore account. You need to be prepared with the right balance, account, and interest rate to set yourself up for success.

A crucial part of offshore company formation is opening an offshore business account.

Read on for a quick guide on how to open your offshore account.

What is an Offshore Company?

Offshore companies are companies registered outside of their country of operation. An Offshore company formation can make for easier business transactions between partners in different countries.

There are a number of benefits to starting a Nevis Business Company.  For instance, it is a simple way to encourage international trade, simplify accounting, and hold large sums of money.

Really, though, the main benefit is the reduction in taxes. Offshore companies enjoy a number of tax breaks that you might not enjoy in your home country.

Nevis Business Companies do not have to pay corporate income tax, capital gains tax, and other binding taxes.

That’s a big benefit when you consider small businesses average effective tax rate is 19.8 percent in the U.S.

These tax breaks don’t apply to all income. For example, income from clients is still taxable in areas where clients are tax residents.

Nonetheless, offshore companies are still a go-to for businesses.

Account Information

The truth is offshore accounts operate similarly to bank accounts in other countries. In fact, deposits into these accounts receive interest like in your country of domicile banks. Interest rates vary based on the form of currency, size of the deposit, and the type of account.

You can typically make deposits in three types of accounts: demand deposits, savings, and term deposits.

An offshore bank might also have minimum balances for different types of accounts, so make sure you have enough saved up.

Minimum balances for a Nevis Bank account are usually between $200-$500 based on the type of account.

Offshore banks might also charge you start up fees. It’s recommended that you account for several hundred dollars for opening fees.

Additional fees might include an application fee, annual service fees, and wire charges.

Many offshore banks also offer credit cards on a cash collateralized basis. Credit limits and conditions vary.

Your Offshore Company Formation

Offshore business accounts are a must for any offshore company. They can be your ticket to fast savings, easier business, and tax breaks.

Are you looking to start an offshore company? We can help. Contact us to learn more about setting up an offshore account today.

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The Nevis Multiform Foundations Ordinance 2004

Introduction

Although St. Kitts and Nevis are part of one Federation Nevis has its own Legislative Assembly with autonomous powers to pass Ordinances. Committed to remaining relevant to the needs of existing and new clients the Nevis Legislative Assembly decided to enhance the jurisdiction’s product portfolio to offer better options to the sophisticated investor. With this in mind the Nevis Multiform Foundations Ordinance came into force on October 1, 2005.

This piece of legislation facilitates a New Corporate Vehicle described as the “Swiss Army Knife” of legal entities. It introduces into the Nevis international financial services regime the formation of a ‘Multiform Foundation’ which is an innovative and flexible hybrid type of foundation.

What is a Nevis Multiform Foundation

The Nevis Multiform Foundation is an attractive asset protection tool which offers unique planning advantages. It is a legal entity which can be seen as an umbrella within which [subject to given rules that define the structure] a subscriber can personally design their form of Foundation.

With a single filing an entity can function as:

1) A corporation
2) A trust
3) A limited liability company

Each Nevis Foundation has a stated Multiform, which means that the constitution of the Foundation states whether it should to be treated as a trust, a corporation, a limited liability company or an ordinary Foundation. Whether an entity is designated to function as a corporation, a trust or a limited liability company would also be determined by the registration filed with the Registrar.

Requirements for Registration

The subscriber, promoter or registered agent acting on behalf of a subscriber or promoter shall deliver to the Registrar an original copy of the memorandum of establishment and by-laws (if any) of the foundation and a statement in the prescribed form signed by the subscriber and legally acknowledged, or signed by the registered agent on his behalf and duly witnessed.

Flexibility

• The constitutional format and the stated identity of the Foundation can be changed during its lifetime, thereby allowing for greater flexibility in its use and application;

Existing entities can to be converted or transformed, continued, consolidated or merged into a Nevis Multiform Foundation;

• An entity incorporated outside of Nevis can be converted into a Nevis Foundation;
• An existing Nevis entity can be similarly transformed into a Nevis Foundation;
• Two or more entities from outside or within Nevis can be merged into a Nevis Multiform Foundation.

These features serve to make the Nevis Multiform Foundations Ordinance an effective piece of legislation for the provision of asset protection vehicles.

Advantages

The Nevis Multiform Foundation is a useful tool for estate planning, financing structures, special investment holding arrangements and charities.

If the Nevis Multiform is used as a limited liability company (“LLC”) type entity a creditor pursuing a claim against the Multiform must post a $50,000 cash bond with the Nevis Courts, and transfers to the LLC are subject to a shortened statute of limitations on fraudulent transfers (maximum 1 year). Therefore members of a Multiform LLC may obtain benefits similar to settlers of an offshore asset protection trust. Multiform trusts enjoy similar protection as Multiform LLCs.

Once the Foundation conducts no business with persons ordinarily resident within the Federation, the Foundation is exempt from income, withholding and capital gains taxes.

The Foundation can become tax resident in Nevis. This is particularly important for some jurisdictions, and again enhances the flexibility of these entities.

The application for tax residency is simple and requires a fee of US$1,000. The Multiform will then be subject to Corporation Tax at a rate of 1% of net income (net profits) with a minimum tax payable of US$1,000 per annum.

A local Corporation Tax return must be completed each year. Audited accounts are not required to be filed, but the accounts and/or the return must be completed by a qualified accountant.

There is provision for a balance between privacy and transparency. As with all Nevis entities, privacy is guaranteed under the St Kitts and Nevis Confidentiality Act 1985. The Foundation can elect to have some or all information available on the public record. This is achieved by completing the appropriate form and supplying the Registrar with the information that you require to be made available. Should circumstances change, the Foundation can apply to have this information removed from the Register.

There is provision for a form based system of information collection. This removes ambiguity from the processing of information to and by the Registry, and simultaneously reinforces confidence in the system. All forms are held by the Registered Agent who can advise as to which form is required to meet each specific circumstance.

The Nevis Multiform Foundation Ordinance addresses the issue of forced heirship by categorically stating that any Multiform Foundation governed by the laws of Nevis cannot be made void, voidable or liable to be set aside or defective in any manner by reference to the law of a foreign jurisdiction.

Conclusion

Nevis Multiform Foundation is a new type of financial vehicle made available through innovative legislation. The key benefits of a Nevis Multiform Foundation are its flexibility, the ability to elect for tax residency and the balance between privacy and transparency.

The Nevis International Insurance Ordinance 2004

Introduction

Prior to 2004 Nevis allowed reinsurance companies to be established in the territory as Nevis Business Corporations without any specific legislation relating to their regulation.

In 2004 the Nevis Government, as part of an overall policy of ensuring that the jurisdiction has a regulatory regime and regulatory standards in keeping with international best practices, enacted The Nevis International Insurance Ordinance.

The Nevis International Insurance Ordinance 2004 provides for the general regulation of the international insurance arena and also allows general and captive insurance companies to be formed in addition to the already established reinsurance companies.

Upon its enactment The Nevis International Insurance Ordinance required that all reinsurance companies previously operating from within Nevis either cease operations or register with Nevis Financial Services Department and apply for licensing under the Ordinance within 6 months of the enactment of the Ordinance.

The Nevis Insurance Ordinance 2004 is a very modern insurance legislation, with a number of aspects that make operating an international insurance company from Nevis easier than most domiciles, and without introducing the additional costs that many of the other jurisdictions’ laws may dictate.

For example the Act allows for:

• Protected cell companies to be established;
• Low minimum capitalization levels (from $25,000 depending upon the nature of the business);
• Pragmatic solvency requirements;
• No requirement of Local directors;
• No requirement for local banking;
• Low licensing fees;
• Tax neutral jurisdiction.

Nevis does, however, require that an international insurance company licensed in Nevis employ a locally licensed insurance manager, and an auditor approved by Nevis Financial Services Department (NFSD).

Regulation

NFSD is the body that regulates the whole financial services sector in Nevis. The insurance division of NFSD is actively working toward developing Nevis as the primary domicile for mid market insurance captives within the Eastern Caribbean.

NFSD wherever possible, seeks to work with prospective captive owners and managers to make the process of establishing a captive as easy as possible whilst always respecting the rule of law within Nevis and internationally.

The main regulatory features are:

• Insurer must be registered;
• Company names are subject to approval;
• Minimum of two directors who are natural persons;
• Flexibility on allowable assets;
• Annual audit of all insurers;
• Actuarial valuation every three years, of insurers carrying on long term business.

Captive Insurance

A captive insurance is basically an insurance company that insures the risk of its parent company. The Nevis International Insurance Ordinance 2004 defines Captive Insurance as ‘insurance business where the insured is a parent or affiliated company of the registered insurer or is a person in respect of whom the registered insurer is authorized by the registrar to provide insurance.’

An offshore captive insurance company therefore is a form of self-insurance where a company, group of companies or professionals, sets up an insurance company to self-insure the normal expected loss.

It is a subsidiary company, wholly owned by a non-insurance company, that underwrites the insurable risks of its parent company or its related or associated companies.

Why Captive Insurance

• To minimize costs by the elimination of a large percentage of traditional insurance company overhead;
• To reduce risk by selecting only quality insureds known to each other (as in the case of some medical malpractice association captives);
• To insure risks which would otherwise be uninsurable or cost prohibitive;
• Access to the re-insurance market;
• The reduction of Government regulations and restrictions by seeking out a favorable jurisdiction for the registration of the company;
• The reduction of taxes by domiciling the company in a low tax jurisdiction.

Types of Insurable Risk

The captive insurance company may insure almost any form of insurable risk, however the most common types of insurance cover effected through captives are:

• Product liability coverage;
• General property and casualty coverage;
• Medical malpractice liability;
• Workers compensation;
• General property (usually minor claims);
• Loss of profits;
• Marine-cargo and hulls;
• Employee benefits;
• Group pension plans;
• Casualty;
• Products recall;
• Product liability;
• Pollution liability;
• Expropriation of assets;
• Nuclear explosion;
• Currency devaluation

Conclusion

Nevis is currently moving at a pace to develop as a market for small and medium sized captive insurance companies both on a reinsurance and direct writing basis for “mid-market” parents that have previously considered captives the sole domain for Fortune 1000 companies.