The Nevis International Exempt Trust Ordinance

What makes a trust exempt

The Nevis International Exempt Trust Ordinance 1994 establishes international trusts in Nevis as "exempt" trusts, meaning they are exempt from various local taxes and from certain requirements that apply to domestic Nevis trusts. Three qualifying conditions must be met. No beneficiary may be a Nevis citizen or resident at the time of settlement. No trust property may include land situated in Nevis. And at least one trustee must be a licensed trust company under Nevis law.

These are threshold conditions, not drafting choices. A trust that fails any one of them is not an exempt trust under the Ordinance and does not benefit from its protective provisions. The trustee at onboarding confirms compliance with all three before accepting the settlement.

The fraudulent transfer provisions

Section 16 of the Ordinance (and its amendments) addresses fraudulent dispositions. A creditor seeking to challenge a transfer to a Nevis trust must prove beyond reasonable doubt two separate things simultaneously: first, that the settlor made the transfer with principal intent to defraud that specific creditor; second, that the settlor was insolvent at the time of transfer or did not retain sufficient assets outside the trust to meet that creditor's claim.

The principal intent requirement is demanding. Mixed motives for transferring assets — estate planning, asset management efficiency, creditor protection generally — do not satisfy the principal intent test. The creditor must show that defrauding this specific creditor was the dominant purpose of the settlement, not merely a consequence of it. Combined with the criminal standard, this makes most fraudulent transfer challenges technically unwinnable even where the transfer did coincide with a known dispute.

The limitation framework

Two limitation periods apply. The primary period runs two years from the date the cause of action accrued. A creditor who cannot commence Nevis proceedings within two years of their cause of action arising is time-barred entirely. A secondary period also runs: any action under the fraudulent transfer provisions must be commenced within two years of the date of the settlement. Together these two clocks mean that a trust settled more than two years before the cause of action is essentially invulnerable to fraudulent transfer challenge regardless of the merits.

See the limitation period page for how the two clocks interact in practice and why most creditors find the window has already closed by the time they are ready to proceed.

The non-recognition provisions

The Ordinance provides that a foreign judgment obtained against a settlor is not enforceable against trust property in Nevis. This removes the normal route by which a judgment creditor would seek to execute against assets: the foreign judgment cannot be registered in Nevis and given standing as if it were a Nevis judgment. Every creditor must start fresh in Nevis proceedings under Nevis law.

The Ordinance also provides that the validity of a Nevis trust and the capacity of the settlor to settle it are governed by Nevis law, regardless of the law of the settlor's domicile. This prevents a foreign court from applying its own domestic trust law to determine whether the trust is valid.

Key amendments since 1994

The Ordinance has been amended several times since 1994, generally in the direction of strengthening the protection it provides. The creditor bond requirement is a provision of Nevis law that operates alongside the Ordinance. Confirm the current consolidated text of the Ordinance with a Nevis-qualified adviser rather than relying on any single secondary summary including this one.

Statutory analysis is necessarily simplified. Read the Ordinance in full with qualified Nevis counsel before relying on any provision for planning purposes.