IN404 - The Potential of Using a Managed Trust Company in Nevis

The Concept

A number of families and organisations have considered creating their own trust company in a tax-efficient jurisdiction, such as Nevis, but have concluded that the expense involved in setting up such an operation would not be justified.

An alternative is to establish a managed trust company. 

The benefits of an internal trust company can be enjoyed without incurring the high initial set up costs associated with forming a separate office.  Dixcart is able to assist in creating a managed trust company in Nevis.

From a compliance and regulatory perspective Nevis is a jurisdiction which does not appear on either the FATF or OECD black lists.

What Advantages Can the Jurisdiction of Nevis Offer?

The jurisdiction of Nevis offers a number of advantages including:

  • A very attractive tax regime: no personal income tax, no capital gains tax, no withholding tax.
  • The ability to waive the exemptions detailed above and for entities to become tax resident in Nevis. The annual tax charge is 1%.
  • The registers in Nevis are not open to the public which assists with confidentiality.
  • The Nevis trust regime offers a high standard of asset protection. An international trust established in Nevis cannot be declared void or defective due to the forced heirship rules of the Settlor’s domicile or the jurisdiction in which the trust was created.
  • A flexible Multiform Foundation structure which is unique to Nevis.

How Does a Managed Trust Position Work?

ABC Limited, for example, wishes to establish a trust company in Nevis and  creates ABC Trust Company (Nevis) Limited.  A management agreement is drawn up between ABC Limited and Dixcart, which provides for Dixcart to supply the day to day support services with the ability to represent the trust company and deal with trust company relationships.

A licence under the Nevis corporate service provider legislation is required for the provision of trustee services or to act as a corporate service provider on the island. Dixcart Management Nevis Limited holds such a licence and can provide the managed company with the appropriate compliance to meet the licence requirements. If the company, in this instance ABC Limited, acts as a trustee without establishing a physical presence on the island, a simple Nevis International Business Corporation can be formed with no requirement to be licensed.

ABC Limited may decide that it would like to deal directly with the clients and to pass on advice to the trust company with regard to client matters. Alternatively, they may decide that the Nevis Trust Company should have full management and business relationship responsibilities, which they then provide to contacts dealing directly with clients.

Benefits in Using a Managed Trust Company in Nevis
  • The structure is simple and straight forward for family offices.
  • Additional revenue, and therefore profit opportunities, are available through the creation and administration of companies and trusts inNevis.
  • There are no costs in establishing a new office, in renting premises or recruiting staff.
  • A wider range of services may be provided to existing clients and to potential new clients.
  • The managed trust company can have the same name as the professional firm.  Clients are therefore reassured that their affairs are being retained under the responsibility of the same group.
  • Client confidentiality and confidence is maintained.
  • If managed by Dixcart, the managed trust company will be administered by professional, qualified staff with experience in international business.

Establishing a Trust Company/Corporate Service Provider in Nevis

Dixcart can coordinate the application for an organisation to become a trust company or corporate service provider in Nevis.

The Regulator will need to be provided with:

  • A list of the proposed shareholders, including proof of identification.
  • A list of the proposed directors, and details of their full names, addresses and nationality.
  • A bank reference for each of the shareholders and proposed directors.
  • A police report from the country of residence of each of the shareholders and directors, confirming the absence of any criminal convictions.
  • A copy of the proposed managers’ CVs, together with personal information, including their Social Security numbers and Driving Licence numbers.
  • The names and addresses of the proposed bankers and auditors.
  • A detailed proposal of the intended activities, due diligence procedures of the company, management structure and a financial forecast regarding the first year’s activity.

Summary

A number of benefits can be generated by operating a dedicated trust company in Nevis.  These benefits can be enjoyed without the costs of establishing a new office, through the creation of a managed trust company.

Additional income can be generated for an organisation, with the clients’ affairs being retained under the firm’s umbrella and management being provided by experienced, professional Dixcart staff.

This is a practicable and cost effective way for an organisation to extend the services they offer and the choice of jurisdictions available.

Contact and Additional Information

If you would like more information on this subject, please speak to Graham Sutcliffe at Dixcart Management Nevis Limited, or to your usual Dixcart contact.

Categories: Jurisdiction, Nevis, Year, 2016