Belize Tax Free Trusts

A Trust is an arrangement (not unlike a contract) between three persons, the Settlor (ie the person who sets up the Trust), the Trustee (ie the person who manages the Trust and its property) and the Beneficiary or beneficiaries (ie the person or persons who are ultimately designed to benefit from the Trust). Offshore Trusts offer tax deferral possibilities as well as protection from creditors’/litigators’ claims, financial (and political) instability, and much more. Offshore Trusts are also a popular tool for ensuring that family wealth is successfully passed  from generation to generation.

 

The English law against perpetuities does not apply (which means you have the ability to earmark gifts for future descendants no matter how remote)

 

The Belize Trust legislation offers some of the most flexible and robust features available anywhere today. These include:

  1. the English law against perpetuities does not apply
  2. the powers and duties of a Protector are set out
  3. the status of a Letter of Wishes is clarified
  4. Trustee appointment and removal provisions are flexible and allow for the appointment of a sole Trustee
  5. the law contains provisions to simplify the drafting of Trust documents
  6. asset protection provisions so that a Trust may not be set aside on the basis of claims from creditors or the order of a foreign court on account of divorce, bankruptcy, etc.
  7. prospective Settlors may create protective Trusts in their own favor
  8. other types of Trusts may be recognized (e.g. the Islamic Waqf and the Chinese Family Settlement)
  9. registration of the Trust is optional
  10. both charitable and non-charitable Trusts are allowed
  11. non-charitable Trusts may have a maximum duration of 120 years
  12. Trustees may be given full discretionary powers
  • BELIZE TRUSTS OVERVIEW

An International Trust is registered in Belize under the Trusts Act of Belize to qualify as an international trust, the beneficiaries must at all times be “non-resident” in Belize as defined in Section 2 of the Trusts Act of Belize.

 

  • REGISTRATION OF BELIZE TRUSTS

There is no mandatory requirement to register a Trust in Belize; however, registration is possible with the General Registrar in accordance with Belize law. The application must be accompanied by -

  1. A certified copy of the Trust Instrument;
  2. A fee of BZ$200 (which is US$100).

On receiving the above, the Registrar enters into the Register of Trusts the name of the trust, the name of the settlor, the purpose of the trust, and issues a certificate of registration to the trustee.

That fee stated above is a one-time fee payable upon application for Registration. It is not an annual fee.

 

  • Key Features of the Belize Trust

EXEMPTION FROM TAXATION

 

A Belize trust has no taxation liability in Belize and no requirement to file any returns, reports, or records, provided that:

  1. The Settlor is not resident in Belize,
  2. The beneficiaries are also not resident in Belize, and
  3. The Trust property does not include any land situated in Belize.

MODIFICATION OF COMMON LAW RULES

The Belize Trusts Act alters the common law rules relating to:

  1. the rule against accumulations;
  2. the rule against perpetuities, removing the perpetuity period;
  3. the rule against double possibilities;
  4. the rules restricting the extent of charitable purposes;
  5. the rules against purpose trusts.

REVOCATION

A Belize Trust can provide for an express power of revocation otherwise it will be deemed to be irrevocable.

 

RETENTION OF CONTROL AND BENEFITS BY SETTLOR

A Belize Trust shall not be declared invalid or a disposition declared void or affected in any way if the Settlor retains or acquires:

  1. a power of revocation of the Trust;
  2. a power of disposition over Trust property;
  3. a power to amend the Trust deed;
  4. any interest in the Trust property.

HEIRSHIP RIGHTS

A disinherited heir cannot challenge a Belize Trust on the basis that it interferes with his or her right to succeed to assets or property.

 

SPENDTHRIFT BENEFICIARY

A Belize Trust can provide that an interest in property given to a beneficiary for life or a lesser period shall not be alienated or pass from the Trust by bankruptcy or be taken in execution by process of law.

 

BANKRUPTCY

A Trust is not void or voidable in the event of the Settlor’s bankruptcy, notwithstanding any law of the Settlor’s domicile or place of residence and notwithstanding that the Trust is voluntary, without valuable consideration and made for the benefit of the Settlor, the Settlor’s spouse or the Settlor’s children.

 

FRAUD

The Court (in Belize only) has the power to declare a Trust invalid, but does not have the power to vary or set aside the Trust where there is a claim by a creditor upon insolvency. This applies even in the face of legislation such as the Statute of Elizabeth and Reciprocal Enforcement of Judgments.

 

The result of the foregoing is that once a Trust is settled under the laws of Belize, it is deemed not to be fraudulent.

 

GOVERNING LAW

A term of a Belize Trust expressly selecting the laws of Belize to govern the Trust is valid, effective and conclusive regardless of any other circumstances.

 

FOREIGN JUDGMENTS

Foreign judgments are not enforceable against a trust settled under the laws of Belize. Any claimant must commence new proceedings in Belize, subject to Belize law.

 

EXCLUSION OF FOREIGN LAW

A Trust governed by the laws of Belize or disposition of property held by the Trust will not be void, voidable, liable to be set aside or defective by reason that the laws of any foreign jurisdiction prohibit or do not recognise the concept of a Trust, or that the laws of the Belize are inconsistent with any foreign law.

 

COMMENCEMENT OF PROCEEDINGS

Any proceedings to set aside the settlement of any Belize Trust or disposition to such Trust must be commenced in the Supreme Court of Belize.

 

STATUTORY RIGHTS OF DELEGATION

A Trustee has a statutory right to delegate its powers and functions, such as management of Trust property, including investment management, and to employ professionals to act in relation to the affairs of the Trust.

 

CUSTODIAN AND ADVISORY TRUSTEES

A Custodian Trustee may be appointed to hold Trust property and an Advisory Trustee to advise the Trustee in relation to the Trust property.

 

GUARANTEE AGAINST EXPROPRIATION

At OCI we believe in giving you more for your money than would the average Trust formation service. Hence included in the registration package for your Belize Trust is the following:
Services:

  • Unlimited name availability inquiries
  • Advice from an experienced International Corporate Lawyer on how to structure your Trust
  • Preparation (overseen by a lawyer) of application to register the Trust
  • Preparation (overseen by a lawyer) of the Trust Deed
  • Attending to filing the Trust registration request with the registry
  • Attending to payment of government filing fees
  • One year’s Registered Trustee’s service in the country of registration
  • One year’s Registered Office service in the country of registration
  • Mailing address in the country of registration
  • Delivery of registration pack by international courier (ie DHL/Fedex/TNT etc)
  • Unlimited free legal consultations for 12 months

Documents included in your Incorp pack:

  • Certificate of Registration
  • A  sealed/stamped copy of the filed registration application
  • Resolution by Trustee accepting appointment
  • Resolution to open a bank account
  • Resolution to appoint a lawyer for the Trust
  • Resolution to appoint an accountant for the Trust
  • Sample/template letter of wishes
  • Resolution appointing you as the Trust’s authorised representative in commercial negotiations
  • Resolution appointing you as Investment adviser to the Trustee
  • Agreement authorising you to represent the company in commercial negotiations
  • Agreement appointing you as Investment adviser to the Trustee

Price (all inclusive): $US 2,500

 

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Every effort has been made to ensure that the details contained herein are correct and up-to-date, but this does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.