¶ 3001
Overview
Scope of the chapter. This chapter brings together the rules examined in the earlier chapters and applies them to the design of complete structures. The three Nevis vehicles are rarely used alone. A planner usually combines an international trust under the Nevis International Exempt Trust Ordinance, Cap. 7.03(N), a limited liability company under the Nevis Limited Liability Company Ordinance, Cap. 7.04(N), and, increasingly, a multiform foundation under the Multiform Foundations Ordinance, Cap. 7.08(N). Each statute has its own protective rules, its own limitation periods, its own bond and its own registry. A structure that combines them takes the protection of each layer only if the layers are built in the right order, on the right documents, and kept in good standing afterwards.
Method. The chapter does not restate the law. It takes the verified rules from the earlier chapters and cites them by paragraph, so that the reader can check each step against the full treatment. Where an earlier chapter left a point open, this chapter says so and states the design response. The chapter adds no new statutory analysis of its own; where it states a rule, the source is the cross-referenced paragraph.
Plan of the chapter. Paragraph 3010 sets out the design principles that apply to every structure: timing, solvency, control, documentation and compliance. Paragraphs 3020 to 3070 examine six standard structures:
- an international trust holding a Nevis LLC (¶ 3020);
- a multiform foundation holding a Nevis LLC (¶ 3030);
- a foundation acting as trustee of an international trust, and the trust foundation (¶ 3040);
- a single-member Nevis LLC owned by a United States person (¶ 3050);
- the migration of an existing foreign trust into Nevis (¶ 3060); and
- a layered structure combining Nevis with the Cook Islands or Belize (¶ 3070).
For each, the chapter gives the steps in order, the documents and filings, the tax and reporting consequences, and the points at which the structure most often fails. Paragraph 3080 is a drafting guide to the trust deed, the operating agreement and the foundation's constitution, keyed to the model provisions in earlier chapters and to the forms in Appendices A to C. Paragraph 3090 closes with an implementation checklist and a maintenance calendar.
The three statutes compared. Table 30-1 collects the protective rules of the three Ordinances that drive design decisions. Each entry is examined in the paragraph cited.
Table 30-1. The protective rules that drive design
| Rule | International trust | LLC | Multiform foundation |
|---|---|---|---|
| Fraudulent-transfer standard | Principal intent to defraud the creditor, proved beyond reasonable doubt; insolvency required (§ 26; ¶ 2120) | Parallel rule (§ 61; ¶ 2170) | Parallel rule (§ 108; ¶ 2170) |
| Transfer protected if made after accrual by more than | One year (§ 26(3); ¶ 2140) | Two years (§ 61(4)(a); ¶ 2170.02) | One year (§ 108(3)(a); ¶ 2170.06) |
| Time to sue | Two years from the transfer (§ 50(1); ¶ 2140) | One year from the transfer, where the transfer was within two years of accrual (§ 61(4)(b); ¶ 2170.02) | Six months from subscription where the subscription was within one year of accrual (§ 108(3)(b); ¶¶ 1870.10, 2030.03) |
| Creditor's bond | EC$270,000 before any action against trust property; no order of any kind until deposited (§§ 50(3)(c), 61; ¶¶ 2220, 2220.10) | Set by the court; actions to collect a judgment under § 60 only (§ 62; ¶ 2240) | US$50,000; dissolution petitions under § 79(2) only (§ 83(1); ¶ 2240) |
| Member's or beneficiary's creditor | Spendthrift and discretionary protection (¶¶ 830, 840) | Charging order the sole remedy; three years, non-renewable (§ 60; ¶¶ 1520, 1540) | No proprietary interest; restriction on alienation (§ 47; ¶ 1970) |
| Foreign judgments | Not recognised (§ 30; ¶ 2340) | Firewall (§ 60(7), (12); ¶ 2350) | Firewall (§ 110; ¶ 2350) |
| Register | Closed (§ 46; ¶ 580) | Articles on the public file; operating agreement private (¶ 1270) | Open, by-laws confidential (§ 86(3); ¶ 2080.01) |
What the table shows. Three points emerge. First, the trust offers the strongest procedural protection, because its bond is high, it binds every creditor and it bars any order, including a freezing order, until the bond is posted (¶ 2220.10). Second, the LLC is the better vehicle for holding and operating assets, because the charging order is the sole remedy of a member's creditor and expires after three years (¶¶ 1520, 1540). Third, the foundation offers continuity, a public identity and a short time to sue, but its bond is narrow and its register is open (¶¶ 2030, 2080). Most structures therefore place the operating assets in an LLC and the ownership of the LLC in a trust or a foundation, so that a creditor must defeat two statutes in sequence.
The limits of design. No structure protects a transfer made while the settlor is insolvent, with intent to defraud a known creditor. The Nevis statutes protect against claims that arise later, and against the pressure of a creditor who must sue in a distant court, post a bond and prove a case beyond reasonable doubt. They do not protect a settlor from the courts of the settlor's own country, which can act on the settlor in person (see infra ¶ 3010.06; supra ¶¶ 2510, 2530). The design principles in ¶ 3010 follow from that limit.