This article is primarily for the Russian-speaking diaspora from the United States, whose representatives, according to Google Analytics, actively read the Hazel Motes portal. In this article, we will tell our Russian-speaking readers from the United States how to protect their assets abroad using Nevis LLC.
Nevis Limited Liability Companies to protect assets
Registering an LLC in an offshore jurisdiction provides another level of Asset protection here. For example, on the island of Nevis, there is rather favorable legislation for LLC. The most important provision in the law is that Nevis, like Florida, allows limited liability companies to have a single board member. The Nevis Act also establishes an LLC liens security interest from creditors. The transfer of assets by an American citizen to an offshore LLC does not provide for adverse tax consequences. To obtain a refund from an LLC, the lender must apply to the court of the island of Nevis to obtain a lien. It is still unknown whether the Court of Nevis will take court decisions issued in Florida at the request of a creditor or not. Nevis officials say they don’t remember a single case where a US lender was entitled to a refund of a bond on Nevis, according to a US court order.
In accordance with the legislation of the island of Nevis, the LLC manager may not be a resident of the island or be a business organization of the island of Nevis. Nevis LLC may be the debtor/member or any other person residing in the United States or in any other foreign jurisdiction. The debtor, represented by the manager in Nevis LLC, has substantial control over Nevis LLC and must manage the assets independently, regardless of location. For example, Nevis LLC may have a bank account in Florida, or, if necessary, the company may open an offshore account in any other popular bank, for example in Switzerland.
The debtor, being the manager in his Nevis LLC, provides control over the LLC assets, but cannot provide full protection of the assets. Nevis LLC provides optimal asset protection if the debtor is appointed by the manager as an individual or company registered outside the United States. No US court has legal authority over foreign managers. The foreign manager will manage all the assets of Nevis LLC. An operating agreement LLC provides that a foreign manager cannot be removed by the debtor/participant. It is important to note that the American debtor is ready to entrust the foreign manager of an LLC if an aggressive creditor is going to take legal action against Nevis LLC. Some debtors have friends or relatives whom they appoint as managers.
Debtors from America must themselves verify the data and integrity of offshore companies that provide management services to Nevis LLC. There are many companies with a good reputation, but each person must very carefully choose a company that is going to entrust control over the assets transferred to Nevis LLC. Do not rely on the advice of friends or your professional consultants in choosing an offshore manager Nevis LLC. An offshore manager will be able to find more detailed information about you as a client than you about them. Offshore management companies are very careful in choosing their clients and partners.
Asset Management at Nevis LLC is similar to brokerage accounts offered by most financial institutions in America. Brokerage account – when you, the client, appoint a financial institution to invest your money on your behalf. If you appoint a financial company as an offshore manager for your Nevis LLC, the management company and its employees do not actually manage the assets of the LLC. Instead, for asset management, the LLC manager hires a financial institution outside the United States.
As is customary in US brokerage accounts, the client sets the rules for managing and limiting financial investments for Nevis LLC. You can instruct the manager about the level of risk, the percentage of cash that is invested in stocks or bonds, the number of investments in US or international stocks, income tax strategies, and other risk parameters. Manager Nevis LLC can send monthly notifications and, if required, confirmation of transactions.
Nevis LLC may need to submit additional tax forms to the IRS (Internal Taxation Service). For example, the only member of the board of Nevis LLC must file the IRS form 8832 in order to obtain the status of a “fiscal-transparent entity”, although local LLCs are already considered as fiscal-transparent persons by default. Although Nevis LLC should not affect US income tax, individuals should consult with their CPA (accountant) regarding the registration of tax forms, since Nevis LLC was established.
Limited companies, for example from Florida
Florida limited liability company (LLC) – is a popular business planning tool. Many lawyers use LLCs as an alternative to Subchapter S corporations, or as a more attractive legal entity for new firms. Asset protection representatives also use LLCs as a legal tool for internal property protection planning. Assets of members of the board of a limited liability company are not exempt from the execution of decisions of a foreign court, but Florida law provides for creditors limited opportunities to recover debts from shares of a debtor LLC.
Florida state law limits creditor indebtedness, these limitations are known as “liens” against cash distributions LLC. Ultimately, if the director of an LLC decides not to distribute funds, the creditor does not receive anything. The Internal Revenue Service – IRS, ruled that, in case an LLC has taxable income allocated to the debtor/participant, but the LLC does not make distributions provided by the pledge right, the creditor is responsible for his income tax as a participant, even if the creditor does not receive allocations in accordance with its security interest. In Florida, due to the limited rights of the creditor, according to the pledge right, together with the income tax payable, the lenders are reluctant to take active steps to collect interest from the participant’s LLC.