Are international LLCs more protective than domestic LLCs?
Posted on Jun 8, 2015 4:00am PDT
The Nevis and Cook Island LLCs are both significantly more protective than
domestic LLCs. As with the domestic LLC, a judgment creditor of an international
LLC’s member is limited to a charging order against that debtor
member’s profit distributions. Moreover, with the Nevis LLC, the
creditor pays U.S. taxes on earnings attributable to the debtor-member
from the Nevis LLC – even if earnings were not distributed by the
Nevis LLC. This is the same with a domestic LLC. Moreover, the member’s
creditor cannot claim the member’s interest in the LLC, nor replace
its management. Most significantly, Nevis LLC law prevents a present creditor
from pursuing fraudulent transfer claims against the debtor’s assets
transferred to the Nevis LLC provided the debtor exchanged the contributed
assets for a proportionate ownership interest in the LLC. This is not
necessarily so with domestic LLCs. The international LLC, as a disregarded
entity, requires minimal IRS reporting. Moreover, the Nevis LLC can be
flexibly structured to achieve virtually any asset protection, estate
planning, business or investment objective. The Nevis LLC, for U.S. tax
purposes, can elect to be taxed either as a C corporation or partnership.
Officers and directors of the Nevis LLC are personally immune from the
LLCs liabilities. The Nevis or Cook Islands LLCs are excellent alternatives
for those who want good protection internationally at less cost than forming
an IAPT. However, we emphasize that you won’t save U.S. taxes with
the Nevis LLC or any other international entity, as American taxpayers
must report and pay US taxes on all international earnings in the year
the income was earned.