When it comes to asset protection trusts, no country in the world offers more protection than Belize. Why is this protection superior to that of other offshore jurisdictions? Belize took the best elements of trust laws created in other nations, then refined and improved them. Top United Kingdom and United States trust attorneys drafted these statutes.
Once you form a Belize trust, a foreign court cannot set it aside. The legal language in the statutes makes this and other claims against the trust unambiguous. There is no potential for any other interpretation. In addition, there is no waiting period for asset protection. Open a Belize trust, place your assets into it, and it protects your assets from then on. This is provided you have properly established the trust. Plus you must place your assets, such as your bank account, in a jurisdiction that does not recognize foreign judgments. No one has penetrated such a trust; a very reassuring fact.
This asset protection applies to the laws or court orders of all jurisdictions, including those relating to:
- Marriage and divorce
- Succession rights, including a spousal or relative’s fixed shares, whether testate or intestate
- Forced heirship
- Creditor claims
To date, the Belizean government has refused to sign certain reciprocal tax agreements with the U.S. This includes the Foreign Account Tax Compliance Act, Double Taxation agreements and Tax Information Exchange Agreements. That being said, we still recommend full compliance with U.S. and international tax law.
High Integrity
Yes, Belize’s asset protection statutes are second to none. To comply with international standards, Belizean banks must reveal whether clients are foreign nationals if receiving an official inquiry from the country’s Financial Intelligence Unit. Thus, if a foreign government makes inquiries through these official channels, the Belizean bank must inform the agency’s representative that an individual or entity does have an offshore account. No further information is mandated. This is one of the only ways any type of privacy concerns come up regarding Belizean trusts.
So, those conducting honest, legal business need not worry. Only those who participate in illicit activities need to concern themselves. That is one reason why our organization and the Belize trustees try to weed out unclean players.
Information About Belize
While well-known as a tropical paradise welcoming tourists to its sandy white beaches, Belize is also an economically and politically stable country where English is the official language. The government has fixed its currency to the U.S. dollar.
Formerly the British Honduras, the country shares a northwestern border with Mexico and a southern and western border with Guatemala. Spanish is also widely spoken in Belize. This sovereign nation is a member of the Commonwealth, with Queen Elizabeth II as its head. The population is approximately 375,000 as of this writing.
Because it is a sovereign nation, Belize has the right to create its own laws. Those include statutes protecting assets placed by settlors in trusts in the country’s jurisdiction.
Belize Offshore Trust Structure
The structure of a Belize trust does not differ appreciably from its “onshore” counterparts. The settlor – who cannot reside in Belize by law –creates the trust, and their assets fund it. Settlors are synonymous with grantors. One holds the assets in title and trustees administer them. The beneficiaries should receive trust assets. A protector can appoint or change the trustees and supervises trust operations. This position, if used, is generally held by an attorney, relative or another deeply trusted individual. The settlor may also serve as protector. Along with trustee appointment, the protector has the ability to veto trustee decisions made on the settlor’s behalf.
A Belize trust must have at least two parties, a settlor and a trustee. The law does not actually require a beneficiary. However, the same person can technically serve in both the settlor and trustee capacities, as well as the beneficiary, making it a sole trust. Though this arrangement would negate its asset protection benefits. So, a licensed Belize trustee is required in order to enjoy the asset protection that a Belize trust provides.
With the exception of a charitable trust, a settlor may create a Belize trust with a maximum of four trustees. While trustees manage the trust, they cannot benefit from it.
While the U.S. dollar is the standard currency in which to establish a Belize trust, any currencies are allowed. There are no minimum capital requirements for the trust.
Expect to pay an annual license fee of $1,250-$3,000 and an annual tax of $850 to the Belizean government plus the trustee fee, which varies.
Estate Planning
A Belize trust serves as an excellent estate planning vehicle. The settlor uses the assets in the trust as his or her own while alive. That includes using these assets for retirement purposes. When the settlor dies, the assets are automatically transferred to the named beneficiaries. There is no need for probate, and the settlor can name anyone they want as a beneficiary. All of the information regarding the trust remains confidential, even after the settlor’s passing.
For estate planning purposes, the settlor may choose either a fixed or discretionary trust. Beneficiaries named in the former cannot change after the trust is created. Nor can what assets each beneficiary receives.
With a discretionary trust, the “intent” of the trust is the prime consideration. The trustee may distribute assets according to the settlor’s intent, as the value of specific assets may change over time. This allows for a more equitable distribution among beneficiaries after the settlor’s demise. Many settlors use a combination, or hybrid version, of a fixed or discretionary trust when planning their estates.
Belize Trust Act
All Belize trusts must comply with the Belize Trust Act. The Belize International Financial Services Commission (BIFSC) regulate trusts. The BIFSC licenses all trustees before these individuals are permitted to work in the international financial services field.
A Belize trust must have a local registered agent. This agent’s office serves as the trust’s official office. For a small fee, the settlor may register the trust with the Belizean Registrar, and a registration certificate is issued. There is no need to file the trust deed with the Registrar. In addition, unless a trustee provides written consent, no entry in the register is available for inspection.
It is possible to conduct all business relating to the trust electronically. It is also possible to move a Belize Trust to another jurisdiction, and trusts from other jurisdictions are also movable to Belize.
Trusts may buy and sell real estate, stocks and bonds, as well as operate businesses. Any sort of tangible assets, including precious metals, jewelry, art, antiques and the like may be held in the trust. The structure of the trust may allow it to make disbursements to the settlor or family members. Such disbursements may pay for medical and legal bills. Educational disbursements are another option. All of these disbursements can avoid foreign currency controls.
Belize Trust Formation
Documents and information required to form a Belize Trust include:
- Trust name
- Settlement and registration date
- Trustee name
- Trustee duties and powers
- Beneficiaries and their addresses
- Protector name, if applicable
- Contact information, address, and passports of the settlor, trustee, beneficiaries and protector
- Trust property specifics
- Trust revocability status
No Fraudulent Transfer Claims Allowed
Unlike other jurisdictions, Belize does not permit any fraudulent transfer claims. Other offshore jurisdictions may allow a fraudulent conveyance statute of limitations of two years or more, so assets are not really safe until this period passes.
One caveat: When opening a trust, it is usually best to attach a Belizean bank account to it. There is always the possibility that a creditor could obtain a judgment against the bank if outside Belize. Such banks are beyond Belize’s jurisdiction. There are also banks in the Cook Islands and Switzerland that work well with Belize trusts.
Belize IBC
A trust can also serve as the director of a Belize International Business Company (IBC). Incorporating an IBC takes us just two days if all required know your client (KYC) documentation is submitted first.
There are a few, minor, limitations with a Belize IBC. By law, such an IBC cannot conduct business buying or selling products or services to Belizean residents. That does not mean the IBC cannot operate elsewhere, choosing Belize as its headquarters. Another incentive is that Belize does not tax the IBC’s profits or assets. That also holds true for all property transfers to the IBC, as well as sales of shares or securities. As with trusts, there are no minimum capital requirements for an IBC. However, a bank may require at least $1,000 for opening an IBC account.
There is no requirement for the IBC to hold an annual meeting, or to use a Belizean director or secretary.
IBCs may hold meetings in Belize, open Belizean banks accounts and engage Belizean professionals for services. While a Belize IBC cannot conduct business in Belize per se, it may purchase shares in Belizean IBCs. The IBC may also buy shares in local Belizean real estate trusts. The Belizean government permits IBCs to own ships, airplanes and other vessels registered in the country. That makes an IBC an ideal instrument for holding properties and investments, including ships, as well as asset leasing and shares of other companies.
Until recently, the law permitted Belize IBCs to issue bearer shares, in which the owner is the entity holding the physical shares. That is no longer the case, and all such shares had to convert to registered shares by 2019.
No Requirement for Financial Records
IBCs in Belize are under no obligation to file financial records with the government. While that means a company technically does not have to keep such records, maintaining the accuracy of IBC financials is generally a wise idea. That is certainly the case when an IBC has multiple owners.
Conclusion
Belize trusts offer some of the most robust asset protection on the planet. Once you place your assets into a properly structured asset protection trust in Belize, it is safe from creditors. If you would like to set up such a trust or have more questions, please complete the form on this page or utilize one of the phone numbers above to get a hold of a consultant.
