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The Nevis Limited Liability Company (Amendment) Ordinance (NLLCAO), 2015 (the "New Ordinance") strengthens and clarifies the prior Nevis Limited Liability Company Ordinance (NLLCO) of 1995 ("Prior Ordinance"). Among the improvements made by the New Ordinance are the addition of (1) fraudulent transfer provisions governing assets contributed to a Nevis LLC, (2) language prohibiting enforcement of foreign judgments against member equity, and (3) enhanced limitations on creditor remedies. This article explores several significant aspects of the New Ordinance.
Introduction
Nevis is a small island located in the West Indies of the Eastern Caribbean. Nevis is primarily known in the United States for being the birthplace of founding father Alexander Hamilton. Other historical significance includes a period during which Nevis was home to substantial sugar plantations and the hub of the English slave trade. Nevis is one of the two islands that constitute the Federation of St. Kitts and Nevis.
The first ordinance adopted in Nevis establishing a beneficial planning entity, the Nevis asset protection trust, was the Nevis International Exempt Trust Ordinance. See Nevis International Exempt Trust Ordinance (1994, as amended). The trust ordinance was modeled on the Cook Islands International Trust Act, passed in 1984. The Nevis International Exempt Trust Ordinance offers several protective features, including prohibitions against the enforcement of foreign judgments against trust assets, limited fraudulent transfer remedies, and binding choice of law provisions. To complement the trust, Nevis adopted a limited liability company ordinance in 1995.
Two Significant Prior Deficiencies
The Prior Ordinance contained significant omissions (Deficiencies). The Deficiencies included (1) a lack of prohibitions on registration (or domestication) of foreign judgments (to attach Nevis LLC equity) and (2) a lack of a fraudulent transfer law.
As discussed below, it is nearly impossible to determine the actual common law of Nevis from public research. Other than the statutes associated with protective entities and foreign investment, Nevis law is not available to the public. Nevis court opinions are unpublished. Thus, one is often left making inferences from the few available sources.
The First Deficiency: No Protection from Foreign Judgments
Under the Prior Ordinance, equity in a Nevis LLC was vulnerable to a foreign money or collection judgment in the creditor's home jurisdiction and registration or domestication by court order in Nevis. Because of...