The Advantages of Nevis Limited Liability Companies

The Nevis Limited Liability Company Ordinance was enacted in 1995. This state-of-the-art LLC legislation offers solutions to many of the problems confronting lawyers and businessmen using, or seeking to use LLCs.

The owners of a Nevis LLC (referred to as members) perform a role similar to that of partners in a partnership, or shareholders in a company. However, their precise characterisation will depend on the nature of the LLC's management. The management may be vested in all of the members. Alternatively, the LLC may be run by designated managers, appointed either from the ranks of the members or hired from outside the LLC, in which case the members will be more passive investors, like limited partners or shareholders and the LLC would appear to be similar to a limited partnership with general partners, or a corporation with officers and directors.

A Nevis LLC is formed by filing Articles of Organization with the Nevis Registrar of Offshore Companies. The LLCs operations and the rights among the members are defined through an Operating Agreement. A foreign LLC (or similar entity) may easily convert to a Nevis LLC by doing little more than filing Articles of Organization. Other foreign entities, such as corporations, may convert to a Nevis LLC after transferring their domicile to Nevis.

The LLC is liable for its operating debts and no members, other than those who may have guaranteed company debts, are liable for any of the LLCs obligations. The interests of members in an LLC are freely transferable, subject to any restrictions imposed by an agreement between the members.

LLCs may be taxed either as corporations (with potential corporate level tax) or as partnerships (with income and losses flowing through to the members without the LLC being taxed). If treated for tax purposes as a partnership, it is the members who report any income or loss from LLC operations on their personal tax returns.

The Nevis LLC Ordinance permits planners to structure the LLC in almost any manner to achieve their commercial objectives. Hence, if partnership tax treatment is desired, the Nevis LLC could be structured to lack continuity of life, free transferability of membership, centralized management, or limited liability.

Nevis LLCs also provide a large degree of confidentiality. There is no requirement to file or have on public record the Operating Agreement (in effect the equivalent to the Articles of Association of a Company) and the names of the members and managers are also not a matter of public record.

The Nevis LLC can be used for any business venture or professional practice anywhere in the world, outside of Nevis, including international financing arrangements to gather funds internationally for U.S. or non-U.S. operations, real estate holding in the U.S. or elsewhere, manufacturing operations and operational or investment vehicles for offshore trusts. The aviation industry in the Caribbean is one of the fastest growing in the aviation sector and the region is heavily aviation dependent.