St. Kitts and Nevis Exempt Foundations

Establish a St. Kitts and Nevis Tax Exempt Foundation with Fidesco Trust Corporation

Establishment and Registration

Any person may establish a foundation by subscribing to the articles of the foundation and transferring assets to the foundation upon its registration. Such person is called the founder.

The founder or any person acting on behalf of the founder may by delivering to the Registrar of Foundations the articles of the foundation and on payment of the prescribed registration fee apply for the registration of the foundation.

Upon the registration of the foundation, it will be a separate and independent legal entity in its own right, capable of suing and being sued in its own name.

Foundations may limit their period of existence.

Names

The name of a foundation must end with the word “Foundation”.

A foundation can use any name provided that the name chosen is not considered misleading or otherwise undesirable by the Registrar of Foundations.

Purpose and Capacity of Foundations

Foundations are established for the purpose of providing benefits to its beneficiaries in such manner as is to be specified in their articles or bylaws.

Foundations can only carry on commercial activities if they are ancillary or incidental to their purpose.

Subject to the Foundations Act, a foundation has the capacity and the same rights, powers and privileges as an individual.

Administration

All foundations must have a registered office in the Federation to which communications and notices may be addressed.

The business and affairs of a foundation is managed by a board of Councillors. A foundation must have at least one councillor and a councillor may be an individual or a body corporate.

Every foundation must have a secretary who is resident in the Federation and authorised to carry on either trust or corporate business in St. Kitts under the relevant laws. A secretary may be an individual or a body corporate. A foundation can also have one or more assistant secretaries who, or each of whom, may be an individual or a body corporate.

The articles of a foundation may provide that a guardian is to be appointed and a guardian may be an individual or a body corporate. The duties of a guardian is to supervise the management of the foundation and to take such action as may be necessary to ensure compliance by the foundation and its councillors with the provisions of the articles and byelaws of the foundation. A guardian has the full right of access to the books, records and accounts of the foundation.

Meetings

A foundation must, in each year, hold at least one meeting of the councillors as its annual meeting in addition to any other meetings in that year, and must specify the meeting as such in the notices calling it. The founder and the guardian are entitled to be notified of the annual meeting; to table business to be considered at the annual meeting; and to attend and be heard at the annual meeting but neither the Founder nor the guardian is entitled to vote at such meeting. The guardian but not the founder is also entitled to be informed of all meetings of the councillors; to table business to be considered at the meetings; and to attend and be heard but not to vote at such meetings.

In the case of an equality of votes the chairman of a meeting has a second or casting vote in addition to any vote which he may have.

Where a foundation has only one councillor, that councillor present in person constitutes a meeting.

Accounts

All foundations must keep accounting records and prepare annual accounts.

Where a foundation is an ordinary foundations; or the articles of the foundation so require; or a resolution of the councillors so directs, then that foundation must appoint auditors to audit its annual accounts.

An ordinary foundation (i.e. a foundation which is not an exempt foundation) must deliver to the Registrar of Foundations a copy of its audited annual accounts.

An exempt foundation (i.e. a foundation which is not an ordinary foundation) is not required to deliver to the Registrar of Foundations any accounts.

Dissolution of Foundations

A foundation is dissolved where the the foundation is established for a definite period and that period expires; the purpose of the foundation is fulfilled or becomes incapable of fulfilment, and the councillors, by unanimous decision, resolve so; any provision of the articles of the foundation so requires; the Court orders that the foundation be dissolved.

The Registrar of Foundations may dissolve a foundation where the foundation fails to file its annual statement, or fails to pay the prescribed annual fees within the time specified by this Act, or fails to comply with any other provision of the Foundations Act.

Tax and Other Exemptions

A foundation is not subject for assessment to any tax in the Federation and the beneficiaries of a foundation are similarly exempt from all income, capital gains and withholding taxes which may arise out of their interest in the foundation if the foundation effects transactions exclusively with persons who are not resident in the Federation.

A foundation is called an exempt foundation if it qualifies for the tax exemption mentioned above and an ordinary foundation is a foundation which is not an exempt foundation.

No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by any person with regard to any property transferred to or held by or securities issued or created by or relating to an exempt foundation.

No stamp duties are payable by any person with regard to any transaction in securities issued or created by or relating to transfer of property to or any of an exempt foundation.

We strongly recommend that Clients should seek professional advice from a reputable lawyer specialised in International Tax Planning or from one of the leading international firms of chartered or certified public accountants before acquiring any offshore structure or entity. Clients should specifically ensure that their professional advisers inform them about all restrictions and reporting requirements which will apply to them once they have acquired any offshore structure or entity.