Disclosure of Information
Secrecy of Information
Trust Registration in Nevis
The use of the international trust has become increasingly imaginative and prolific and remains an important feature of estate planning and asset protection.
The Nevis International Exempt Trust Ordinance provides for the creation of various types of international trusts including Charitable Trust, Non-Charitable Trust, Spendthrift or Protective Trust and Qualified Foreign Trust.
The assets and income of an international trust are exempt from all exchange controls and all forms of taxation and stamp duty in Nevis.
To qualify as an international trust under the Nevis International Exempt Trust Ordinance, the following criteria must be met:
- There must be at least one trustee, which can be a corporation incorporated under the Nevis Business Corporation Ordinance;
- The Settlor and Beneficiaries must at all times be non-residents of Nevis; and
- The trust property must not include any land situated in St Kitts and Nevis.
Nevis International Exempt Trust
Asset Protection Features
- An international trust cannot be declared void, voidable or defective by reason of any forced heirship rules of the Settlor’s domicile, residence, place of current incorporation, formation or establishment;
- The rule against perpetuities does not apply to an international trust and unless otherwise provided, an international trust shall have unlimited duration;
- Foreign Judgments against the trust are not enforceable in Nevis. Any civil action to recover assets from an international trust must be brought anew in the Courts of the Federation of St. Kitts and Nevis.
- The Ordinance was amended recently to give a trustee additional powers to help achieve the purpose of an international trust by allowing the trustee to combine two or more separate trusts into a single trust or divide a single trust into two or more separate trusts provided that such action does not impair the rights of any beneficiary or adversely affect the purpose of the trust or trusts. Rules governing any such combination or severance are also provided for in the Ordinance.
- The 2015 amendment also expanded the list of authorized trust investments to include such assets approved by the protector so that trustees can hold a wider variety of assets.
- The sole remedy available to a creditor is to allege fraudulent transfer or disposition. If the Trust is settled after the expiration of one year from the date that the creditor’s cause of action accrued or originated, it is not deemed fraudulent. In any event, a creditor seeking to set aside a transfer to an international trust must prove beyond a reasonable doubt and with clear and convincing evidence that the transfer constituted a fraudulent disposition. Moreover, a creditor must deposit with the Ministry of Finance, a security bond of XCD$270,000.00 or US$100,000.00 before he can bring an action against an international Trust;
- A creditor of a beneficiary cannot compel or force a distribution with regard to a discretionary interest in an international trust or compel or force a trustee to exercise the trustee’s discretion to make a distribution with regard to a discretionary interest in an international trust. Neither can a creditor of a beneficiary compel or force a protector to exercise a power to direct a trustee to make such distributions to any beneficiary of an international trust. Furthermore, a trustee is permitted to make payments on behalf of the beneficiary without liability to any creditor.
- Creditors of a beneficiary of an international trust will have a right to a beneficiary’s interest only in the circumstances where the beneficiary has unfettered control of the trust property and exercises such control. Similarly, creditors will only have a right to a settlor’s interest in an international trust if that settlor has retained a power to revoke the international trust entirely and to appoint the trust property to the settlor, the settlor’s estate, the settlor’s creditors, or the creditors of the settlor’s estate, to the extent the settlor exercised such retained power.
Appointment of a Protector
Note that the Ordinance provides for the appointment of a Protector, who is responsible for monitoring the operations of the international trust. This provision allows the Protector to ensure that the purpose of the international trust is fulfilled. The Ordinance was recently amended to clarify the role of the Protector who has the authority to direct a trustee to make and approve distributions made by a trustee or direct the trustee to make particular investments. Statutory protection is also given to the trustee for acting in accordance with the directions of a Protector absent the trustee’s own willful misconduct.
The Proper Law of the international trust is the law of the jurisdiction expressed by the terms of the trust, or failing that, with which the trust at the time it was created had the closer connection. Failing either, then the proper law of the international trust shall be the law of Nevis.
The Ordinance also provides for there to be confidentiality with respect to the trust. Though an international trust register is maintained, it only records the name of the international trust and the date of settlement and is not a public document available for inspection. The only exception is where a trustee of a specific international trust gives written authorization allowing the inspection of the entry of that trust on the register.
However, AML/CFT Regulations mandate that the Registered Agent responsible for the registration of that international trust is under an obligation to maintain accurate and updated information on their customers and third parties on behalf of whom the customer is acting. This includes information on the settlor and beneficiaries of the trust. Additionally, the Ordinance provides that all non-criminal judicial proceedings relating to the international trust shall be heard in private and that no details may be published without leave of the court.
The registration of a Trust must be carried out by a registered agent, such as an attorney or local management company. The registration may be achieved in twenty four (24) hours.
An application for entry on the register of International Trusts shall be made in a manner and form prescribed by the Registrar.
The application shall be accompanied by:
- Notice of the name and registered office of the Trust
- Undertaking that Trust document has been read and it conforms with NIETO (Nevis International Exempt Trust Ordinance)
- Name of the Trustee – one of the trustees has to be a corporation incorporated under the NBCO or a trust company doing business in Nevis
- A certificate from a trustee company, a barrister or solicitor certifying:-
- That the trust upon registration will be an international trust
- The date on which the Trust was created, settled or established
iii. In the case of a qualified foreign trust, the law under which the trust was settled
- Where the governing law is changed to the law of Nevis, that the trust is registered as a qualified foreign trust and the date of its registration
- (a) There has been no changes made to the International Trust
(b) There is no illegal activity perpetuated by the Trust and/or
(c) Pending litigation against the Trust