¶ 1801
Overview
Scope of the chapter. This chapter introduces the Multiform Foundations Ordinance, the Nevis statute under which a foundation may be established, continued into Nevis from abroad, converted from another Nevis entity, or created by consolidation or merger. Multiform Foundations Ordinance, Cap. 7.08(N) (rev. ed. 2017) (St. Kitts & Nevis) ("MFO"). The Ordinance gives every foundation registered under it a separate legal personality and residence in Nevis. It requires each foundation to state, on registration, the form in which it is to be treated: as a trust, a company (including a limited liability company), a partnership, or an "ordinary foundation" whose form is unclassified. MFO §§ 3(2), 10(1), (6), (9). The stated form is the "multiform". It may be changed later by amendment of the constitution without affecting the foundation's existence. Id. § 10(2)–(5). The chapter examines what a multiform foundation is, how one is formed, what the choice of form does and how the foundation compares with the trusts, limited liability companies and foreign foundations that a planner might use instead.
Plan of the chapter. Paragraph 1810 traces the origins of the Ordinance, its commencement in 2005, its amendment in 2011 and the regulations made under it through the fee regulations in force from April 1, 2025. Paragraph 1820 examines the legal nature of the foundation: its personality, its residence and domicile, its ownership of the property subscribed to it, and the provisions that make Nevis law govern its establishment. Paragraph 1830 examines the multiform itself: designation, the four stated forms, the rules that apply the trust, company, limited liability company and partnership statutes to a foundation of the corresponding form, the change of form and the Registrar's power to reject a constitution that does not fit its stated form. Paragraph 1840 addresses subscribers, promoters and subscriptions, including foundations established by will. Paragraph 1850 addresses the foundation's purposes and objects. Paragraph 1860 sets out the formation process: the memorandum of establishment, the by-laws, registration, names, the formalities of execution and the amendment of the constitution. Paragraph 1870 introduces the foundation's organs and beneficiaries and its confidentiality and creditor provisions, each treated in depth in later chapters. Paragraph 1880 covers migration into and out of Nevis, conversion, merger and consolidation, dissolution and revival, the foundation's tax status and its annual filings and fees. Paragraph 1890 compares the multiform foundation with civil-law and common-law foundations, with the Nevis international trust and with the Nevis LLC, considers the foundation's classification for United States tax purposes, and closes with a formation checklist.
Relation to other chapters. Chapter 19 examines the foundation's governance in depth: the management board, the secretary, the supervisory board, beneficiaries' rights, meetings, records, accounts and audit. Chapter 20 examines the foundation in planning, including the forced-heirship and anti-alienation provisions, foundations acting as trustees, and conversion between forms. The creditor provisions of the Ordinance are treated with the corresponding trust provisions in Part V: the avoidance of subscriptions for fraud in chapter 21, the creditor's bond in chapter 22, foreign judgments in chapter 23, procedure in chapter 24, and the treatment of Nevis structures by foreign courts in chapter 25. Tax and reporting are treated in Part VI. The international trust, which a foundation of trust form closely resembles, is examined in chapters 5 through 11, and the Nevis LLC, which a foundation of limited liability company form resembles, in chapters 12 through 17. The comparative law of foundations, including the Liechtenstein, Panamanian, Jersey, Cook Islands and Belize statutes, is treated at greater length in the companion volume, Lighthouse on Asset Protection, chapter 31.
The point of the chapter. The multiform foundation is a single statutory entity that can be presented in four different shapes. Its flexibility is its distinguishing feature. It is also the source of most of the questions a planner must answer. A foundation stated to be a trust is governed, unless its constitution chooses another law, by the international trust Ordinance applied with modifications; a foundation stated to be a company or limited liability company is governed by the corresponding Nevis company statute; and a foundation stated to be a partnership by Nevis partnership law or the LLC Ordinance. MFO § 10(9). Each of those statutes was written for a different kind of entity, and their application "mutatis mutandis" to a foundation raises questions of fit that the Ordinance does not answer in detail. The Ordinance also leaves the classification of the foundation abroad, whether by a foreign court, a foreign tax authority or a bank, to the law of the place where the question arises. A planner who chooses the multiform foundation should do so because the form fits the client's purpose, and should draft the constitution so that the foundation works as intended under the stated form and is recognizable as that form outside Nevis.
Terminology. The Ordinance uses its own vocabulary, and this volume follows it. The person who transfers property to the foundation is the "subscriber", and the property transferred is a "subscription"; the person who establishes the foundation is the "promoter", who may or may not also be the subscriber. MFO § 2. The governing body is the "management board", and the optional supervisory body, which may be called a protector, enforcer or guardian, is the "supervisory board". Id. The constitution consists of the "memorandum of establishment" and the "by-laws". Id. A beneficiary whose entitlement has vested absolutely is an "absolute beneficiary", a term that carries particular weight because the Ordinance's default voting rules turn on it. Id. §§ 2, 8(1). A foundation of trust form is a "trust foundation"; of company or limited liability company form, a "company foundation"; of partnership form, a "partnership foundation"; and of unclassified form, an "ordinary foundation". Id. § 2. This chapter uses "founder" only when discussing foundation statutes of other jurisdictions that use that word.