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Everything you need to know about Belize trusts
Trusts are probably the best-known asset protection vehicle on the whole planet.
This common law structure
offers a privileged possibility for high net worth individuals to safeguard
their assets for many generations. It can be said it is the stalwart of a
family office.
But this has led many to
believe that the trust is a structure exclusively available for the ultra-rich.
And that's a myth that must be eliminated from our minds.
And the Belizean trusts
proves this.
Belize is one of the
least-known offshore jurisdictions on the planet. We still don't understand how
it isn't at the top of any offshore services list. The level of asset
protection, combined with the tax optimization possibilities, reliability, and
cost, makes it a top destination. In fact, we believe it can only be compared
with the Nevis trust.
Why choose a trust in Belize?
Rock-solid protection
First of all, due to a
read-between-the-lines loophole, a transfer of assets to a Belize trust, even
if it's considered fraudulent by a Belizean court, it cannot be set aside. It
is the only jurisdiction on the world that offers full protection from the
beginning.
So, to put it in layman
terms: if you're married and you transfer some assets to a trust in Belize and
your wife files for divorce, she cannot touch your assets even if she claims
the trust was created to defraud her. This is due to the fact that there are no fraudulent conveyance rules in Belize's trust law.
It is often the case that
courts declare transactions fraudulent so spouses can seize assets protected by
a trust. But that cannot happen in Belize. Not even the most sympathetic of
judges can order such a thing.
Only local judgments are
recognized
Second, Belizean courts don't recognize foreign judgments. There's no way the Belize authorities recognize a foreign judgment. Belize is one of those rare breeds where laws are meant to protect investors and citizens, instead of the state. This is fantastic, especially for people living under authoritarian and statist regimes that may want to seize their assets. No government or creditor will be able to wield its power with a foreign court.
Tax benefits
Belizean trusts pay no taxes whatsoever. The
trust and its properties are free of income and corporate tax, estate,
inheritance, succession, gift, excise, stamp duty, and capital gains tax.
What sets Belize aside from other popular trust
jurisdictions?
Trusts are the best-known asset protection
structure on the planet. They are created to transfer assets from a person to a
trustee. This clears the original owner of any legal or financial liability for
the assets because the trustee is responsible for the assets. The beneficiaries
are third parties, individuals or groups, that will be benefited through
dividends or other means from the trust.
Belize has become a top trust destination whose level can only be compared with Nevis or Cook. In fact, it has one
particularity that puts it above these jurisdictions. For example, Nevis and
Cook Islands give one year for creditors to bring action against a trust
claiming it was designed to defeat them. In Belize, the trust has full
protection from the beginning.
Also, the Cook Islands may recognize some
foreign judgments over their trusts. Again, that's not the case with Belize, as
the only valid judgments against its trusts are those of Belizean courts.
Moreover, it is more flexible than these
other jurisdictions as it allows foreign trustees, as long as they are
licensed, and accounting is not required, albeit our experts strongly recommend
it.
All this means that an international trust in
Belize is an effective way to protect your assets. In the given case you suffer
an asset freeze or bankruptcy, your assets in a trust won't qualify for
forfeiture because you do not technically own them. Thus, they cannot be
confiscated. You may think these events are unlikely, but as your assets
increase, your vulnerability to lawsuits and other legal disputes also increases.
It is also a good legal protection for those living under authoritarian
regimes.
If you establish a trust in Belize, you can
determine specifically who will inherit your assets, and you can highlight
certain assets for certain occasions or persons while keeping everything
confidential.
As if this isn't enough, it also provides substantial
tax benefits as it will reduce your tax erosion. Trusts in Belize are
effectively tax-free, which will help you secure more assets and optimize the
wealth you and your loved ones will be able to gain access from the trust.
Furthermore, Belize trusts are simple to
establish and, considering its benefits, are a low-cost solution.
Registering a
trust in Belize
It is mandatory to register a Belize international
trust. If that's not the case, the trust is invalid and unenforceable,
according to the Belizean laws. Nonetheless, the registration information is
kept private and is a simple process. The trust agent must provide the
following information:
1.
Name of the trust.
2.
Date of settlement of the
trust.
3.
Date of registration of the
trust.
4.
Name(s) of the trustee(s).
5.
Name of the protector (if
any).
6.
Name and address of the trust
agent.
Taxes
As we've already stressed, these trusts are not liable to any kind of taxation. Moreover, they don't even need to file returns, financial reports, or records, if the following conditions apply:
1. The settlor and beneficiaries aren't Belizean residents.
2. The trust property doesn't include land situated in Belize.
However, it is always sound advice to keep a financial record of the
trust, even if it's not required to file it with the public authorities.
Settlement of a
trust and privacy
Trusts are settled through the establishment of a
deed. The document should be limited to referring to the settlement of some assets upon
a trust, without necessarily establishing who has settled the assets. Another
possibility is following the conventional model but having a Belize IBC or international
LLC to own the assets to be settled and have that company as the settlor. As
these structures maintain confidentiality, they will allow you to keep your
personal information private.
In fact, the Belizean Trust Act of 2007 clearly establishes
that the identity of the settlor or beneficiaries isn't required. Section 65C
(1) says:
"The
Register (of Trusts) shall not be open for public inspection except that the
trustee or the trust agent of a trust may in writing authorise a person to
inspect the entry of that trust on the Register."
Thus, even if it's required to establish a trust in
Belize, the information in the registration is private unless the trustee or
trust agent expressly writes an authorization to do so.
Trustee
One great difference of the Belizean trust from other
jurisdictions that allow for enhanced flexibility is that the trustee can be a
foreigner. Section 17(1) of the Act says that "Any person who has under
the law of Belize the capacity to own and transfer property may be the trustee
of a trust." The broad terms of the statement basically mean that any
adult individual that isn't mentally incompetent and any limited company can
act as a trustee.
However, for greater certainty, most clients choose to
have a licensed trustee to act, at least, as co-trustee.
It must also be noted that Belize IBC can act as the trustee,
but cannot be in the business of being a trustee without a license from
the IFSC (International Financial Services Commission). The law isn't entirely
clear on how an IBC can act as a trustee, but we recommend the following:
· It should do so only of one
trust or a small group of interrelated trusts, such as trusts of members of the
same family that are established in parallel.
· Should only charge fees for
costs incurred in acting as a trustee, but not take any remuneration for the
service.
· When using an LLC, special
care should be taken if the jurisdiction of incorporation of the company may
require a license or any other legal consent to act as a trustee.
· The trustee should not be the
beneficiary of the trust or its settlor, even if the Belizean laws don't
expressively prohibit it. In the case of a corporate trustee, a beneficiary or
the settlor shouldn't control it. If the settlor is also a beneficiary, it is
not recommendable to make him the sole beneficiary of the trust.
· The same applies to the
protector. The law allows a protector to be the trustee, but as the natural
role of the protector is to supervise the trustee's actions, it is wise not to
mix the roles.
Protector
Belize international trusts don't require a protector,
but it is common to use one, especially for discretionary trusts, to enhance
tax optimization and asset protection.
The protector is usually a family lawyer, family member, or
friend who follows the wishes of the settlor and will do everything in power to
see those wishes fulfilled. Still, the settlor doesn't want to put that person
with the responsibilities of a trustee.
Thus, a protector shouldn't have a benefit in the
trust to avoid conflict of interest. The protector can receive any powers the
settlor desires, but it usually has two. 1) The power to change the trustee and
2) The power to approve dividend distribution from the trust over a
pre-determined amount.
These two powers allow the protector to serve as a balance over the trustee to ensure the trust fund is distributed following the settlor's desires.
What can we do for you?
Along with NTL, in Mundo, we have a long track record
of helping family offices and high net worth individuals protect their wealth.
We have 25 years of experience helping you increase
your freedom. This statement wouldn't be true if we didn't offer you service in
the best trust jurisdictions on the planet, and Belize is among them.
In this time, we've built an unparalleled network of
experts. And, let us tell you a little secret: we're registered agents in
Belize. We can bring the local expertise that not many can provide.
For a fantastic price, our Belizean team can offer
you:
·
Advising you about the
appropriate trust structure and deed you need.
·
Filling of all forms and
submitting the documents for registration.
·
Filling a standard deed or
creating a special deed, including a final review.
·
Trustee acceptance fee.
·
First year's agent fee.
·
Registration.
·
Trustee services.
·
Tax and accounting advise for
the trust.
What are you waiting for? Contact us immediately; and protect your family and your future with a Belize international trust!
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