A Belize trust can offer you maximum protection and much-needed peace of mind. That is why this tropical country in the Caribbean is generally regarded as one of the top four jurisdictions for international trusts. In the world of asset protection options, offshore trusts provide a secure, flexible means of safeguarding your wealth. A well-structured offshore trust can provide a variety of planning options, reduce your exposure to litigation, and create a barrier to protect assets from collection. Above all, asset protection experts agree that selecting the right jurisdiction for your offshore trust is the key to success.
Forming a Belize trust may very well be the best decision you can make. Intrigued? Here is everything you need to know about why Belize is one of the best options available.
What is an offshore trust?
Similar to their onshore counterparts, offshore trusts form legal arrangements between Settlor(s), Trustees, and Beneficiary(ies). In a nutshell, the settlor(s) give control of their estate to trustees for the benefit of designated beneficiaries. A legal document, known as a “Trust Deed,” outlines the provisions and can identify assets the trust holds, as well as how the assets will be distributed.
What makes an offshore trust different from a traditional trust is location, location, location. In the simplest terms, an offshore trust keeps your assets out of harm’s way. This is because trust companies in foreign jurisdictions are not obligated to comply with the demands of your local court. The judge down the street says, “Give me the money.” The Belize trustee/law firm says “You don’t have jurisdiction down here.” This provides a significant level of protection for your assets.
How a Belize Trust works
Based on the Guernsey Trusts Law of 1989 and governed by the Belize Trusts Act, Belize trust laws currently represent one of the strongest and most flexible pieces of offshore trust legislation in the world.
Key features of Belize Trusts
- Strong asset protection
- Tax-free in Belize
- No capital gains
- No minimum capital
- Zero foreign exchange control
- No stamp duty or capital duty
- Investor anonymity
Note that many countries such as the USA tax worldwide income.
Types, Structure, and Qualifications
Belize offers four different types of trusts: charitable trusts, non-charitable trusts, unit trusts, and land trusts. So, discuss your goals with our consultants to figure out which type works best for your situation.
Once you have chosen the type, you will need to determine the structure of your Belize Trust and identify who will fill the following roles:
- Settlor – establishes and puts assets into the trust
- Trustee – holds the title to the assets and administers the trust
- Protector (optional) – appoints trustees and oversees operations
- Beneficiary – benefits from the trust
Then, you’ll need to make sure that your trust qualifies under the rules stated in the Belize Trusts Act:
- The settlor does not live in Belize.
- The beneficiaries do not live in Belize.
- The trust property is not located in Belize.
- The governing law of the trust is the law of Belize.
- The purpose or object of the trust is to be pursued or performed outside of Belize.
Establishing your Belize Trust
Now, comes the fun part… paperwork. Your consultant will have his legal department draft the Trust Deed, or “Deed of Settlement.” This contractual agreement outlines the duties of the trustee(s) and names the beneficiaries and the assets held by the trust. It also contains any confidential provisions regarding the maintenance, management, investment, administration, and distribution of trust benefits. You may also want a Letter of Wishes, a document that contains special requests to the trustee.
The Belize Trusts Act originally did not require official registration for international trusts. The Trusts (Amendment) Act of 2007 changed all that through the creation of the International Trusts Registry, which now requires the registration of international trusts. You do not need to submit a copy of the Trust Deed or reveal any details about the settlors, beneficiaries, or assets of the trust. But you will need to establish your offshore trust in writing.
What is Needed
A Trust Agent will help you file a specific form and affidavit that contains the following information:
- Name of Trust
- Date of settlement
- Date of trust registration
- Names of Trustee(s)
- Name of Settlor
- The Name of the Protector (if any)
- Name and address of the Trust Agent
Along with the affidavit and application, your agent will need to pay the initial registration fee. Next, the government will issue your Belize Trust a numbered certificate of registration, and you are all set. In addition, our asset protection consultant will go over any additional actions required and help you move assets into the trust.
It is possible to establish a Belize Trust online on this website. However, we highly recommend that you work with an experienced financial consultant who understands the process and who has established connections and expertise. If you would like to find out more information, please contact our team today by calling the number on this page or completing the consultation request form.
Belize Trust Benefits
Maximum asset protection
Offshore trusts formed under the law in Belize offer maximum protection for your assets. Assets transferred by the Settlor to the trust are no longer part of the Settlor’s estate. Therefore, potential creditors have no recourse for accessing the assets. A Belize Trust is one of the few instruments that can help you escape current creditors in your home jurisdiction. Note that we will not help people hide assets from tax authorities. However, it can protect your assets against creditor seizure.
Iron-clad protection from fraudulent conveyance
Belize has become one of the most attractive jurisdictions for offshore trusts because of its effective laws against fraudulent transfer claims. As long as your offshore trust was legally established, Belizean courts will not consider any claims of fraudulent conveyance brought against the trust. Other jurisdictions like the Cook Islands and Nevis have a one- to two-year window of opportunity that allows creditors to submit fraudulent transfer claims. Belize trust legislation, on the other hand, offers immediate protection. This protection can be set aside for reasons such as duress, fraud, and misrepresentation by the settlor. However, even if the settlor sets up the trust with the specific intention of avoiding claims by creditors, spouses, and heirs, Belizean courts can refuse to recognize the fraudulent transfer claim.
Protection from a Mareva injunction
Let’s say a creditor wins a judgment against you in your home country. Fortunately, since you are setting up a Belize trust, it’s up to the country where your trust is located to grant the creditor access to your trust assets. Some creditors can force a debtor-settlor or beneficiary to relinquish such assets by requesting a court to issue a Mareva injunction against the assets of the trust. A Mareva injunction is a temporary restraining order or freeze order that can allow a creditor to take action against a debtor without the debtor’s knowledge. The debtor would simply be denied access to the very funds they need to ward off pending litigation.
However, if you form your offshore trust in Belize, your assets are covered under the Belize Asset Protection Trusts Act. Confirmed and defined by the Supreme Court of Belize, this legislation clearly prohibits Belizean courts from issuing a Mareva injunction against any trust settled under Belize jurisdiction, thus precluding a creditor’s request from the very start.
Since trust assets are no longer considered the property of the Settlor, trusts allow true ownership to be kept away from public scrutiny. The laws in Belize further strengthen confidentiality rules to provide maximum protection for Belize Trusts. According to sections 65C (1) and (2) of the amended Belize Trusts Act, the Registrar of International Trusts is prohibited from disclosing any information or personal records contained in the Register. Additionally, the registrar cannot make any part of the Register available to the public. Only direct written authorization by the trustee(s) can allow for the sharing of details pertaining to a Belize Trust with a third-party.
One of the reasons many people choose to form a Belize Trust is the tax benefits. An offshore trust in Belize – including all assets and trust property – has no tax liability and no requirement to file any returns, reports, or records so long as the trust qualifies under Belizean law. This means that a Belize International Trust and its trust property is permanently exempt from:
- Income and corporate tax
- Estate tax
- Inheritance tax
- Succession or gift tax
- Excise tax
- Stamp or duty tax
- Capital gains
- Exchange control
Keep in mind, this does not mean that you do not have to pay taxes in your own country. The US taxes its citizens on a worldwide basis, for example. So, there may be not taxes in Belize. However, you may need to claim the profits generated offshore on your local tax returns.
Belize is considered by many to be a powerhouse jurisdiction for offshore trusts. This small island in the Caribbean has a thriving economy fueled by tourism and crude oil exports. It has its own banking system, a sound judicial history, and a stable political climate. As a member of the British Commonwealth, the official language of Belize is English. Additionally, the country has excellent telecommunications and transport links. Plus, the Belizean government has made every effort to make the country more attractive to foreign investors. No Belize Trust has ever been compromised. Moreover, no Belize court will entertain a claim against the trust property from a foreign court order. What better place to park your hard-earned wealth than in a tropical paradise that is also a well-secured financial stronghold?
- Sole Trustee ownership is available, meaning the Settlor can also be the Beneficiary.
- You can open a bank account under the name of your Belize Trust or a company that your trust owns.
- Foreign governments and court orders in foreign countries have no authority over a Belize Trust.
- A Belize Trust can be a tax-free instrument for wealth preservation, wealth accumulation, and retirement planning.
- A Belize Trust can hold and buy stocks and bonds and participate in a number of investment opportunities.
Pair your Belize Trust with an IBC
Add another layer of flexibility to your Belize Trust by pairing it with an International Business Company, or IBC. An IBC held by the trust allows a trustee to hold the title while you have legal control over the IBC and all affiliated bank accounts. This gives you more control over your assets. An IBC must maintain a Registered Agent and a Registered Office in Belize and can be used for financial management, investment holding, copyrighting/licensing, and commercial trading. While a Belize IBC must conduct all of its profit earning ventures outside the country, it may:
- Lease a local office (though not required).
- Obtain the services of national professionals and trust companies
- Maintain company records and hold meetings in Belize or elsewhere
- Operate an account with national banking institutions
- Hold shares in another local IBC
- Own vessels such as aircraft and marine vessels that are registered in Belize
One of the great things about pairing your Belize Trust with an IBC is as follows: if your trust ever comes under litigation, you can temporarily transfer management from the IBC to the appointed licensed trustee. So, this diversified structure can make it much more difficult for creditors to gain access to your assets.
Ready to establish your Belize Trust?
Overall, Belize is a great option for establishing your offshore trust. Not only does this tropical paradise have a robust economy and stable government, but it is a veritable tax haven that offers optimal protection for your assets. The Belize Trusts Act and subsequent amendments make it virtually impossible for creditors to wrongfully seize your hard-earned wealth and Belizean courts are not obliged to comply with the demands of your local jurisdiction.
To fully maximize the benefits of your Belize Trust, please consult with one of our trained consultants. We understand the nuances of the law and have established connections with trust companies in Belize. So, you can rest assured that your assets are in good hands. We’re happy to answer your questions and address your concerns, so give us a call or complete the consultation form on this page today.
Last Updated on December 1, 2019