Business Environment

St. Kitts and Nevis is in the process of changing its financial services legislation in order to avoid punitive measures against its offshore jurisdiction by countries that are members of the G-7 and OECD.

The G-7's Financial Stability Forum listed St. Kitts and Nevis as being among group three jurisdictions (jurisdictions that are regarded as having the lowest quality financial supervision), while the OECD has listed St. Kitts as a tax haven and as uncooperative in combating money laundering.

The government of St. Kitts and Nevis has passed the Money Laundering (Prevention) Bill 2000, the Financial Services Intelligence Unit Bill 2000, and the Financial Services Commission Bill 2000. This last piece of legislation establishes the Financial Services Commission as the main regulatory body for the offshore sector.

An offshore company can be established under the Companies Act 1996, while banks, trusts, and other investment services are regulated by the Financial Services (Regulations) Order 1997. Citizenship can be obtained under the Citizenship Act 1984.
The minimum investment requirement is $200,000 in 10-year Treasury Bonds that are issued and guaranteed by the Federation, a minimum $250,000 investment in a project, or a minimum of $150,000 investment in a real estate development. Treasury bonds are issued at their nominal or par value with no interest paid on them.

This island of Nevis has its own financial services legislation which includes the Nevis Business Corporation Ordinance, 1984; the Nevis International Exempt Trust Ordinance, 1994; the Nevis Limited Liability Company Ordinance, 1995; and the Nevis Offshore Banking Ordinance, 1996. St. Kitts and Nevis is a member of the Eastern Caribbean Central Bank.

Taxes

Exempt companies, limited partnerships, and trusts that conduct business exclusively with those non-residents are exempt from taxes. Other companies are exempt from taxes on dividends, interest, and royalties. Ordinary companies pay a 37% tax on profits.

Individuals and ordinary companies remitting payments overseas have to deduct 10% withholding tax from profits, administration, management or head office expenses, technical service fees, accounting and audit expenses, royalties, non-life insurance premiums, and rent.

There is a capital gains tax of 20% on profits or gains derived from a transaction relating to local assets disposed of within one year of the date of their acquisition. This tax does not apply to trusts, limited partnerships, exempt companies, or to enterprises that have been granted a tax concession. St. Kitts or Nevis have no personal income tax, and there is no net worth tax, gift tax, sales tax, turnover tax, or estate duty.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.