Belize Offshore Trust Formation

What is a Belize Trust?

There are four main popular offshore trusts that offer maximum security in the world of asset protection. Belize Trust is generally regarded as the second-best trust just after the Cook Islands, though unlike the Cook Islands, a Belize trust can be had at a fraction of the price.

Belize International Trust Law is built upon the Guernsey Trusts Law of 1989 with some innovations that came through several Amendments. The trust laws in Belize are a strong and flexible set of asset protection legislation that has made it one of the worlds best offshore trust formation jurisdictions.

A Belize Trust has ever been compromised. If peace of mind is what you seek, then a Belize Trust paired with an IBC creates an unbreakable legal and financial vehicle that will surely allow you to sleep at night.

Table of Contents:

• What is a Belize Trust?
• Belize Asset Protection Trust 
• Different Types Of Belize Trusts
• Trust Documents
• Advantages of a Belize Foreign Trust
• Belize International Trust Formation Requirements
• Key Corporate Features

Belize Asset Protection Trust 

A trust provides a great form of protection for your assets against wrongful seizure from creditors or the government, especially for those living in politically fragile countries or where exchange controls are heavily regulated.

To maximize the benefits of a Belize Trust, creating an IBC gives you an added layer of flexibility. While the Belize IBC is held by the trust, the trustee (being an international entity or person, preferably located in Belize) holds the title, while (you) the manager of IBC are able to have legal control over the IBC and the authority of any bank accounts that might be affiliated, in such a way that you have control of your assets, with provisions made, in under times of duress that a trustee manages and protects the trusts assets.

If you, your Belize Trust come under litigation, a temporarily transfer of management from the IBC to the appointed licensed trustee, who under your direction as per, letter of wishes, administers your trust and accounts. A diversified structure makes it much more difficult for a civil creditor to gain legal precedence in one jurisdiction/or multiple, which proves to be time-consuming and costly, which often deters unwarranted pursuance.

Asset protection does not:

• Help you to escape current creditors
• Eliminate your tax obligation from your home jurisdiction
• Give you the ability to hide assets from tax authorities

Different Types of Belize Trusts

• Charitable trusts - no restriction on duration
• Non-charitable trusts - maximum of 120 years of duration
• Unit Trusts - must be declared in writing to be established
• Land Trusts - must be declared in writing to be established

Trust Documents

A Trust Deed

• A Trust Deed is also referred to as a Deed of Settlement and is a written contractual agreement that contains all the necessary details concerning the provisions of the Trust and how the Trust and its assets are to be managed and distributed. The Trust Deed does not need be filed with the Registry, nor any details about the settlors, beneficiary or any information related to the assets contained within the Trust.

Letter of Wishes

• Contains the terms and details of the trust is in which the Settlor gives to the Trustee as per his/her wishes (which is amendable).

Advantages of a Belize Foreign Trust

There are a number of advantages within a Belize Trust, which include:

• Asset protection as investments are kept out of the reach of civil creditors in the case of divorce or bankruptcy
• Court orders in foreign countries do not have jurisdiction over an international trust nor can they have control over foreign citizens (your trustee or protector)
• Foreign governments have no authority over an international trust
• In order to reach assets a creditor is forced to pursue legal claims within Belize and as such there are significant barriers to filing such claims
• All business transactions may be conducted electronically
• Clear separation of legal ownership of the title of the assets of the Trust from the beneficial ownership of the asset
• Custodian trustee permitted
• Trust deeds are not publicly registered
• A trust may be formed by oral declaration or written instrument, although unit trusts must be in written
• Many various forms of investment opportunities
• Flexible trust structure
• English law against perpetuities does not apply
• Trustee appointment/removal/change are flexible
• Sole Trustee ownership is available - that is a settlor can be the beneficiary
• Bank Accounts can be opened under the name of the Trust
• Air tight fraudulent conveyance laws
• Permits a non-common law settlor to create a trust that is peculiar to his/her law, religion or nationality
• The Belize International Trust Registry is not open to the public
• Charitable and non charitable trust are allowed
• A Belize Trust can be moved from Belize to another jurisdiction and vice versa

Top Uses 

A Belize Trust can be used for a number of purposes:

• Preserve assets in times of economic, political or economic uncertainty
• Minimize taxes
• Retirement planning
• Holding a title of any kind
• Be the Director of an IBC
• Holding and buying of stocks and bonds

For complete protection a Belize Trust used in a combination with an IBC from Belize, Panama, Nevis, or the Cook Islands provides maximum protection as it adds another layer that insulates you from being direct tied to the Trust. High-risk individuals particularly benefit from a Belize Trust or those that are in high-risk professions such as lawyers, doctors, physicians, as well as retirement and investment portfolios.

Belize International Trust Formation Requirements

In order to form a Belize Trust the required documents must be summited:

• Name of Trust
• Date of settlement and registration of the trust
• List of Beneficiaries and addresses
• Names of Trustee
• Name of Protector (if any)
• Copy of passport, address and contact information of all parties to the Trust which includes Settlor, Beneficiaries, Trustee and Protecto

Structure of a Trust

There are four different parties to a Belize Trust:

• Settlor—Establishes the trust and whose assets are put into a trust
• Trustees—Holds the title to the assets and administer the trust
• Protector—Oversees the operation and appoints trustees
• Beneficiary—Benefit from the trust

Mechanism of a Trust

Settlor

Settlor establishes a trust by placing assets into a Trust in which is transferred to a separate person–a trustee who then becomes the manager of the trust who holds the assets, under clear instructions from the settlor, for the benefit of a third party.

Trustee

Assets in the Trust are managed by a trustee who holds the legal title to the assets though they are precluded from benefiting from the trust in any way. The point of a trustee is such that under times of legal duress when a court requires that you hand over your assets, the trustee becomes your failsafe. The trustee, who resides in Belize is not subject to a court mandate and can simply refuse. Legally, the trustee can only distribute the funds for the benefit of the beneficiaries.

Multiple Trustees

A settlor can establish a Belize Trust with up to four trustees, unless it is a charitable trust, several trustees used for the management of the assets. Though a single trustee may be used so that the settlor may keep a close watch over the trust and for easy management, which can later change if needed. A domestic trustee may be appointed, however, in the event of a lawsuit or any legal claim against the settlor’s assets the flexibility of the structure allows the trustee to change hands to that of a sole trustee, giving the assets the due protection.

Protector

A trust protector is the one who gives oversight; though is optional, but adds another dimension of stability and security for the trust, as the person is someone trustworthy, usually a family member, or attorney. They are given the power to appoint trustees and veto any actions that the trustee might make on behalf of the settlor.

Beneficiary

The beneficiary is anyone that benefits from the trust which can include the Settlor.

Taxation of a Belize Trust

There are no taxes that are imposed on a Belize Trust, this includes:

• No gift tax
• No estate tax
• No excise tax
• No income tax
• No corporate tax
• No capital gains

Key Corporate Features

Corporate Details

Confidentiality

It is prohibited from making any part of the International Trust Registry open to the public. All information and personal records contained by the Registry is bound by law under section 65C(1) and (2) to be kept confidential. Any details that are shared with third parties can only be done so under direct written authorization from the trustee. All particulars of the Settlor and the Beneficiaries are not filed with the Belize Trusts Registry.

Fraudulent Conveyance

Belize is one of the few countries in the world that offer immediate protection upon the formation of a Belize Trust. As such there is no minimum period of time in which proceedings against fraudulent conveyance can be brought against the settlor.

Corporate Legislation

The Belize Trusts Act has been amended twice since its inception that has made it more internationally competitive.

• 1992 Trusts Act Chapter 202 of the Laws of Belize
• Revised Trust Act in 2000
• Trusts (Amendment) Act 2007
• Trusts (Amendment) Act 2013

Belize International Trust Law is built upon the Guernsey Trusts Law of 1989. The Trusts (Amendment) Act, 2007 requires registration of international trusts and created the International Trusts Registry. The Trusts (Amendment) Act made provisions for the mandatory registration of all domestic trusts.

Other popular Trusts 

• Cook Islands Trust
• Nevis Trust