This week’s article introduces the Belize Private Foundation.
The INTERNATIONAL FOUNDATIONS ACT of 2010, introduced Belize as a leading player in the world of Private Interest Foundations.
Designed primarily for asset protection purposes the Belize foundation is a civil law alternative to the common law trust which is becoming increasingly popular among international investors. The essential difference between a trust and a foundation is that a trust is a relationship (not a legal entity) between the trustees and the beneficiaries created by an act whereby the settlor transferred property to the trustees for the benefit of the beneficiaries; whereas a foundation is a legal entity in its own right and, unlike trustees (who are answerable to beneficiaries), foundation council members are answerable to the foundation.
Of late, a number of offshore financial centers in common law jurisdictions have enacted legislation to provide for the establishment of foundations to remain on the cutting edge of this highly competitive industry. The Act is largely based on similar legislation in Antigua, the Bahamas and Anguilla, although consideration has also been given to corresponding legislation in Panama and Isle of Man.
The Act applies only to non-residents of Belize. It is conned to ‘international foundations’ and does not deal with domestic foundations.
Key Features of the Belize Private Interest Foundation:
- The Act seeks to make the foundation more user friendly, in effect, a hybrid between an IBC and a trust. Provisions are inserted to facilitate and enhance efficient but discrete registration, renewal, striking off, restoration, dissolution, continuance and discontinuance of foundations, as is currently the case with the IBC’s and the IBC Registry
- Like an international trust, registration is mandatory for international foundations, with the international foundation being invalid and unenforceable if not registered.
- Registration does not require the foundation charter to be registered, only the particulars thereof, need to be furnished.
- While the Act does grant full exchange control and tax exemptions to international foundations, the Act makes it expressly clear that such exemptions only apply to international foundations duly registered.
- Specific provisions are inserted for purposes of civil asset protection. Such provisions provide for non-recognition of foreign judgments and anti-alienation of the foundation endowment as well as the reduction of the limitation period within which to bring actions in relation to a foundation. There are similarities in these provisions and our trust legislation as well as trust legislation from other jurisdictions, although the asset protection features of the Belize international foundations are stronger.
- Provision is also made for substantial security for costs in respect of claims brought against international foundations. This is an attractive feature of the Belize foundations as it seeks to discourage frivolous litigation being instituted in Belize.
- Detailed provisions, clarifications and limitations are also introduced in respect of the founder, the foundation endowment, the charitable foundation as well as other bodies and relevant matters involving the foundation. Such extensive codification substantially eliminates legal guesswork in the interpretation of certain powers, rights and obligations.
- Specific provision is made for permissible disclosure of confidential information in pursuance of treaties having the force of law in Belize for mutual legal assistance in criminal matters, tax information exchange, money laundering and terrorism prevention, among other circumstances.
- The fees as specified in the International Foundations Regulations are highly competitive as compared with other jurisdictions. The registration fee and the annual renewal fee is only US$200.00.
- On the whole, the Act combines the best of both worlds. It replicates in a common law jurisdiction like Belize, the essential characteristics of a civil law foundation while avoiding unnecessary complications. It is hoped that a foundation established under Belize law will prove to be an ideal vehicle for asset protection purposes and will find favour with investors from both the common law and civil law countries.
For a Belize Foundation, inc 1 year’s basic admin $,1600 ( + $400 if a Nominee Founder & $300 if a Nominee Councillor is required ( both of which would be advisable for tax purposes):
2nd and subsequent years $715 (or $1,015 if nominees are required)
For more information on Belize Private Interest Foundations please Contact me or click on any of these links:
What is a Foundation:http://offshoreincorporate.com/private-interest-foundations/
What is a Protector: http://offshoreincorporate.com/faq/what-is-a-protector/
What is a Council: http://offshoreincorporate.com/faq/what-is-a-council/
What is a Founder: http://offshoreincorporate.com/faq/what-is-a-founder/
What is a Charter: http://offshoreincorporate.com/faq/what-is-a-charter/
What are Foundation Regulations: http://offshoreincorporate.com/faq/what-are-foundation-regulations/
As ever local laws can have an impact. So be sure to seek local legal/tax/financial advice before committing to register a Belize Foundation