Saint Kitts and Nevis
Family Office

How can a Family Office benefit from a Nevis Foundation?

2/22/2022 8:00:00 AM
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The current pandemic circumstances have caused implosions in some vital financial sectors of the world economy. Governments around the world often take measures that affect the wealth of the wealthiest families, as they need to raise taxes to increase public spending.

Many wealthy families and individuals have taken steps to safeguard their wealth by establishing trusts and foundations. There are dozens of jurisdictions where it is possible to establish your own Foundation or Trust.

However, for a Family Office, the best place to do so is to establish a Foundation or Trust is Nevis. This small Caribbean island, being part of the Commonwealth of the United Kingdom, has a legal framework guaranteed by the British jurisdiction.

The establishment of a foundation or trust is regulated by the Multiform Foundations Ordinance, Cap 7.08 and the Nevis International Exempt Trust Ordinance (NIETO) respectively. 

Although the law is clear and specific to know the procedures in this article we will give you the necessary highlights for the creation of a Foundation or a Trust according to what is established in the law.

All you need to know about the Nevis Multiform Foundations

- What is a Foundation?

A foundation is a legal entity created to manage its own assets for any intended purpose, these can be charitable or non charitable purposes. Foundations are commonly created by wealthy families or individuals who wish to plan their patrimony and create inheritance plans for the future.

In the case of the Nevis Multiform Foundation, it can be operated as a trust, as a Foundation or as a partnership, providing a flexible structure that can adapt to the beneficiary needs.

- How does it protect assets?

Nevis Multiform Foundations serve as one of the most powerful tools for asset protection on Earth, making the central structure for holding Family Office assets. The beneficiary transfers his or her assets to the Foundation, meaning that the assets will be shielded against any legal or tax issues that may arise in the future. Nevis does not recognise foreign court decisions.

Therefore, the Nevis Multiform Foundation protects Family Office assets forever -this is called dynasty trust and is achieved by Rolling over the trust intergenerationally . This means that although the beneficiaries of the trust technically possess millions or billions of dollars they own nothing on paper and therefore are not taxed on the trust's holdings . They can borrow yachts, houses and money held by the trust but are not taxable.

For example, if the Multiform Foundation is operated as a trust and a bank decides to seize the beneficiary’s assets, then the assets under control of the Foundation won’t be seizable.

The Nevis Multiform Foundation offers flexible and resilient asset protection to its beneficiaries.

- Can the Foundation keep together the assets even after the main beneficiary passes away?

Wealth planning is also one of the main features of the Nevis Multiform Foundations. When it comes to inheritance, often the assets are partitioned due to a generational change. However, sometimes the assets should be held and managed together because they are part of a longstanding strategy.

With a Nevis Multiform Foundation, it would be possible for the beneficiary to continue his plans even after he passes away, because the Foundation would continue managing and growing the assets, producing benefits to the next generations of the family.

While many Families suffer from Wealth and inheritance taxes and have serious issues in succession planning the MPF solves all these issues at the same time. 

- Can it hold international assets safely?

Yes. The Nevis Multiform Foundation can hold international assets among its patrimony. Also, you should note that Nevis does not tax gains or profits.

- What about tax residency?

St Kitts and Nevis has enacted a regime whereby you can elect to have the tax paid in Nevis with a certificate of tax residency. This means in effect that the family office can demonstrate should it choose that it is paying tax. The rate is fixed at 1% on profits and its elective. 

- What about the management of the MPF?

The MPF can appoint a financial Adviser as well as a protector or a board of advisers to ensure its investments are properly managed independently whilst allowing the protectors committee (which can be close family and Friends) full control of the structure in a properly designed setting.

Due to is flexibility the MPF can also be used in various legal forms, for example a Limited partnership, which can make it useful as a unlicensed family office investment fund or investment club

How can the MPF save the Family Offices assets?

Throughout the life of a wealthy Family, its members face multiple challenges of a financial nature; these can be anything from Bankruptcy due to bad financial decisions to specially created claims by ex spouses of mistresses fueled by armies of lawyers seeking to tie up assets in courts. Lately wealthy families have been increasingly targeted by governments seeking to seize their wealth or the wealth of various members.

The MPF is a separate entity and is not legally responsible for the debts of its beneficiaries so no assignee in bankruptcy are able to claim against the beneficiaries in a Nevis court. This is set in Stone by Part IX -Forced Heirship, Restriction On Alienation And Forfeiture Of Benefits of the Multiform Foundations Ordinance - Cap 7.08. in article 47. Further under the same part specifically in article 46 no foreign judgment against a MPF will be recognised. It is therefore imposible to claim against a MPF .

The Asset protection benefits of the Multi purpose foundation have been recognised by Nevis legislation on the basis of British law as ST Kitts and Nevis was founded by the British Commonwealth. Therefore the courts of the federation are strongly founded on British law and will never set aside a Multi Purpose foundation at the request or pressure from foreign Powers. This is not entirely the case in European countries where Civil law is recognised and the courts have more powers and discretions over trusts.

Differences between a Foundation and a Trust

Having explained what a Foundation is, it is worth mentioning the differences between a Foundation and a Trust, since they are two useful mechanisms for the management and protection of assets of an individual or family. Among these differences are: 

- A Trust is basically an agreement between two parties that does not need to be legally registered, whereas a Foundation does need to be registered to be effective, as well as acquiring legal personality afterwards. 

- In a Trust, there is an established division in the ownership of assets by prior agreement between the parties involved, whereas, in a Foundation, its legal personality is the one that owns all the assets of the Foundation without such division. 

- In a Trust, the trustee has certain fiduciary duties to the beneficiaries, but in the case of a Foundation, these duties do not exist. However, the original founder has the power to control the assets in the name of the Foundation using a variety of tools. 

The difference clearly lies in the legal personality that the Foundation acquires when it is officially registered, as opposed to the Trust, and from this legal fact onwards, other important differences are established. 

However, both mechanisms are commonly used nowadays, so people should be clear about the details that differentiate them, as perhaps in the future some people may consider setting up one of them.

The Powers of the Protector

The multi Purpose Foundation protector committee can be established to take care of the Needs of the most discerning Family office. By giving specific Powers including veto Powers to the protector committee (which can be made up of trusted family members, Friends, advisers and counsel ) , the Powers of the foundation counsel can be controlled and Limited thus giving Absolute intergenerational control to the family without favoring any single member . The system can work in a similar manner to parliamentary democracy . In effect the MPF can be run like your own country in legal terms with the family members being its members .

Witha properly structured protector committee the Multi purpose foundation becomes the governance base of an intergenerational Family office.

The protector committee therefore balances the Powers of the Foundation to créate safety and stability making it impossible for any one Adviser or beneficiary to seize power . At the same time the founder can maintain personal power until death by naming himself or his corporation as sole protector.

The multi purpose foundation as a family wealth management tool 

The MPF can own limitless asset classes including real estate, bank accounts , cryptocurrency , shares, bonds, ipo equities etc . These can be owned through especially established Special purpose vehicles or holding companies in various jurisdictions . Thus the MPF can establish special purpose companies to hold :

A. Bank and Brokerage Accounts in múltiple jurisdictions 

B. Forex and Cryprotrading Accounts usually through a Nevis LLC 

C. Gold and precious metals holdings in vaults via companies 

In fact the Multi Purpose Foundation can hold almost any assets class and especially crypto as holding crypto assets is specifically permitted under Nevis law {state the law).

Why Nevis?

St Kitts and Nevis are two exuberant islands associated with the British Commonwealth located in the Caribbean. This tiny nation is one of the last frontiers of financial freedom, a place where wealthy families and individuals come to achieve freedom for them and safeguard their patrimony. In a nutshell, we will tell you some of the wonders of Nevis:

- The Nevis citizenship by investment program is ranked as one of the best programs of this type in the Caribbean.

- The banking sector is stable as a rock and it provides confidentiality to its clients.

- As we told you above, the Nevis foundation is extraordinarily flexible as it can be operated as a trust, a company or even a partnership.

- Stt Kitts and Nevis offers a paradisiac standard of living for the lucky people who live in its coasts.

Setting up a Foundation in Nevis

Setting up a Foundation in St. Kitts and Nevis can be relatively quick compared to other foreign jurisdictions. The legislation in this country regarding Foundations includes the idea of a “multiform”, which allows the expressed personality of the Foundation to be changed, allowing it to be more flexible in nature than in other countries. 

This means that the internal structure of the foundation in Nevis can be modified and adapted to structures such as a corporation, a trust or a common foundation. In order to establish one in this country, it is necessary to: 

- Have a specialized agent established within the country.

- Have a legally established office in the country.

- Have an acceptable name to the authorities.

- Have a memorandum of the establishment.

- Have a structure with a board of directors and a secretary.

Once all this has been obtained, the process of opening a Foundation involves reserving the name through the established agent in the country to make the organization's registration official. 

Once this has been done, every last document must be provided to the registry for the Multiform Foundation to be registered, including the following: 

- Official application form. 

- Memorandum of incorporation and establishment. 

- Plan de Consent. 

- Official Articles of Association of the organization.

It is worth mentioning that the best banking solutions are not always out in the open for anyone to see; they are usually hidden among so much information. Thus, it's vital to find the right experts that are aware of all these details and all the necessary documents to be able to open a bank account in the best possible option for a savings account and even to make significant profits.

Some additional benefits

- Access to all traditional financial options such as bonds, cryptocurrency investment, mutual funds, commodities, etc.

- The acquisition of physical gold and silver with the best security standards worldwide.

- The best insurance service for these transactions.

These benefits make establishing a family office in a jurisdiction such as St. Kitts and Nevis quite profitable for an individual and his family, besides being a relatively simple process compared to other countries whose legislation can be more complicated and with high taxes compared to this country. 

If a family wants to protect their wealth most safely and profitably, they should seek more information about this option in this country, since the most likely scenario for the finances of the wealthiest families is that the legislations of many developed countries promote more taxes on these estates.

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Disclaimer: The information contained in this article is for informational purposes only and does not constitute financial advice or recommendations. Investing in financial products or cryptocurrencies involves risks, and you should be aware of the potential risks involved before investing. The content on this website is not intended to be a solicitation or offer to buy or sell any financial products or services. The information provided does not take into account your specific investment objectives, financial situation, or needs, and should not be relied upon as a substitute for professional financial advice. You should seek independent advice from a financial advisor or other professionals before making any investment decisions. Please be aware that the legal status of cryptocurrencies and other financial products may vary in different jurisdictions and may be subject to regulation. It is your responsibility to ensure compliance with any relevant laws and regulations governing the sale and marketing of financial products and services in your jurisdiction.

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