February 26th, 2014
SUMMARY This is a short summary of the key differences between companies and trusts incorporated in Saint Lucia. The highlights here are the differences in annual government fees, Trusts incorporated in Saint Lucia versus Trusts Incorporated in the BVI, and finally Segregated Portfolio Companies in the BVI versus Cell Incorporated Companies in Saint Lucia.
SHARE CAPITAL The annual fee for a BVI company authorized to issue up to 50,000 shares or less is US$350.00. The annual fee however jumps to US$1100.00 if the company is authorized to issue more than 50,000 shares. In Saint Lucia, the annual fee is fixed at US$300.00 per year regardless of the amount of paid up share capital the company has.
SEGREGATED PORTFOLIO COMPANIES VS. INCORPORATED CELL COMPANIES Both the BVI and Saint Lucia have in place specific provisions in their respective companies Legislation, that allow for the formation of a structure that consists of a single corporate entity, whose shares can be separated or “segregated”. Each group of shares is considered separate from the other and incurs debts that are separate and independent of the debts incurred by the other groups of shares within the same structure. A creditor would therefore only have access to the group with which it has contracted and all other shares are protected from enforcement by an existing creditor. The remaining shares in the structure therefore remain protected from attack from the creditor. This structure is ideal for funds and insurance companies where there is a necessity to shield the entirety of the assets from attack from creditors, whilst only exposing a specific group of shares to liability to creditors in relation to any one claim. In Saint Lucia this type of structure is known as a Cell Incorporated Company, whereas in the BVI, it is known as a Segregated Portfolio Company. The difference between the two is that with a Cell Incorporated Company each individual Cell ( or group of shares), is an incorporated Company. In a Segregated Portfolio Company, each portfolio (or group of shares) is an account and there is not as robust a separation in the company’s assets, as there is in the individual Cells acting as individual companies. Each Cell therefore clearly acts as its own company incurring its own debts that are separate from the other Cells in the structure. It is unclear however, how each portfolio is separated under the
BVI Segregated Portfolio, where each portfolio is merely an account and not an actual company. This uncertainly opens the entire structure to a higher risk of attack from creditors.
TRUSTS There are two types of trusts in Saint Lucia, Local Trusts and International Trusts. One unique phenomena of trust law in Saint Lucia is that both Local Saint Lucia Trusts and registered International Trusts are tax exempt. Local Saint Lucia trusts are governed by the domestic law of trusts of England and Wales and the Saint Lucia Civil Code. A local trust need is not regulated, and need not have registered trustees appointed and anyone can act as a trustee of a Saint Lucia trust. Therefore, any company can act as trustees for Saint Lucia trusts on behalf of its clients without the need to appoint a local trustee to perform trustees duties. A Saint Lucia trust cannot own assets in Saint Lucia nor can any of the income generated from the trust be derived from within the jurisdiction, in order for the trust to enjoy tax exempt status. The trustees of a Saint Lucia trust, its property and assets can be held by a Saint Lucia tax exempt company or (International Business Company IBC) acting as Trustee. There are no account reporting requirements in relation to this kind of trust. These trusts also have lower running costs as the trustees need not be Saint Lucia regulated professional trust providers and the annual fee is simply that of a regular Saint Lucia tax exempt company or US$300.00 per year. There is no material difference between a Saint Lucia Trust and an International Trust. Saint Lucia trusts are chiseled into the provisions of the Saint Lucia Civil Code, which has not, and cannot be repealed, thus causing this unusual duality in the law.
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…………………………………….......... TONJAKA HINKSON-DIRECTOR
Prepared on behalf of Fortgate Offshore Investment and Legal Services LTD
Author- Tonjaka Hinkson- Attorney and Director of Compliance and Fiduciary Services.