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Accounting and Financial Services
  Offshore Banking
   
 

Offshore Banking is permitted under the Nevis Offshore Banking Ordinance 1996. The purposes of the Ordinance are to : -

  1. To encourage the development of Nevis as a responsible offshore financial centre.
  2. To provide incentives by way of tax reduction, exemptions and benefits for offshore banking carried out from within Nevis.

Definition of offshore banking

Offshore banking is defined as follows :

  1. Receiving of foreign funds through the acceptance of foreign money, deposits payable upon receipt demand or after a fixed period or after notice.
  2. The sale or placement of foreign bonds certifcates, notes or other debt obligations or other securities, or
  3. Any other similar activities involving foreign money or foreign securities, and
  4. Either in whole or in part using foreign funds so acquired for loans, advances and investments whether in Nevis or elsewhere.
  5. Offshore banking also includes, for the purpose of this Ordinance, any other activity, which the Minister may by regualations declare to be an activity related or ancillary to an activity described above.

Issue of Licences

No licence may be issued under the Banking Ordinance to any person other than an eligible company or qualified foreign bank.

Eligible Company Cap 335

A body corporation is an eligible company if it is wholly owned subsidiary of a local bank regulated by the Eastern Caribbean Central Bank that is licensed under the Banking Act to do business in Nevis.

A qualified foreign bank is a foreign bank that upon commencement of this Ordinance is licensed under the Banking Act.

(a) A foreign bank with minimum capitalization and assets, as prescribed by the
Minister, that is not licensed under the Banking Act but is licensed to do
domestic banking in its jurisdiction of incorporation.

(b) A financial institution, approved by the Minister, that is directly or indirectly
a wholly owned foreign subsidiary, (a company is a of another company if it
is controlled by that other company).

LICENSING REQUIREMENTS

(a) An eligible company must be incorporated under the Companies Act as
a company limited by shares.

(b) Have objects or business activity restricted to offshore banking from within
Nevis.

(c) Have at least one director who is a citizen of St. Kitts and Nevis with a
residence in Nevis.

(d) Have a memorandum and articles of association acceptable to the Minister.

(e) Have an Authorised Capital of at least ECD2 Million, and capital of
not less than ECD1 Million Dollars has been Subscribed and Paid Up in
cash, such cash shall be deposited in an account maintained by the
Permanent Secretary at the Eastern Caribbean Central Bank.

(f) Every applicant for a license under the Banking Ordinance must show
that it is an eligible company or a qualified foreign bank.

(g) Give the names and address of its directors.

(h) Give particulars of the off-shore banking it proposes to do from within
Nevis.

(i) Give the names of any shareholders who are residents of Nevis and the
number of shares held directly or indirectly by residents of Nevis, and

(j) Provide such other information of a financial or other nature as the
Minister may require in any particular case.

(k) An application for a licence by an eligible company must be accompanied
by a certified copy of the memorandum and articles of association of the
applicant.

(l) An application for a licence and all documents submitted pursuant to
this Ordinance in support of the application must be signed by the
directors of the company making the application.

(m) An application for a licence by a qualified foreign bank must be
accompanied by such documents as are prescribed by the Minister.

(n) Any person who intends to apply for a licence under this Ordinance may
submit a proposal to the Minister for a licence, and the Ministerr may
indicate whether or not a subsequent application based on the proposal ]
would be favourably received by him.

DIRECTORS QUALIFICATION

Where a company has appointed a citizen of St. Kitts and Nevis who is a resident of Nevis to its Board of Directors under this Ordinance, that director need not subscribe for nor acquire any shares of the company.

TAX ON PROFITS

No income tax, capital gains tax or other tax shall be levied in Nevis in respect of any dividends or earnings attributable to the shares or securities of a licensee that are beneficially owned by another licensee or by a person who is not a resident of Nevis. Except as follows:-

(a) By way of income tax but in lieu of income tax at the rates of income
tax in the income tax act, there shall be levied and paid to the Inland
Revenue Department upon the profits and gains of a licensee, in respect of
the offshore banking business done by it from within Nevis, tax at the
following rates.

(b) 2 ½ % on all profits and gains up to ten million dollars.

(c) 2% on all profits and gains in amounts exceeding ten million dollars but
not exceeding twenty million dollars.

(d) 1 ½ % on all profits and gains in amounts exceeding twenty million.

(e) Dollars but not exceeding thirty million dollars: and

(f) 1 % on all profits and gains in amounts exceeding thirty million dollars.


REPORTING

Not later than four months after the close of its financial year or such longer period as the Minister may allow, a licensee shall forward to the Permanent Secretary copies of its balance sheet and profit and loss account and the full and correct names of the directors of the licensee.

The balance sheet and the profit and loss account must bear on its face the certificate of an auditor.

LICENCE FEES

Fees charged by the government in respect on an Offshore Banking Business are as follows:-

Fee Amount | USD
Government License 15,000
Government Due Diligence 600
Incorporation 1,400
Our Service 7,500
Total 24,500

 

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