Belize is a hidden paradise that is surrounded by one of the biggest coral reefs in the world, has endlessly breathtaking beaches, and the most out-of-this-world landscape.
But it’s also a financial beauty as it has no tax on worldwide income and offers some of the best offshore services in the entire planet.
It is probably one of the last frontiers of offshore investment, banking, and tax.
With Belize, Privatus Maximus brings you something unique. The Belizean trusts are the best in the world, or in the top-three, depending on who you ask. It is a first-level asset protection jurisdiction.
But, as if that wasn’t enough, Belize is also incredibly flexible. Trusts aren’t the only asset protection possibility in Belize. You also have international foundations, which are generally available in civil law jurisdictions but are also a rock-solid asset protection vehicle, and are available in Belize.
And, of course, Privatus Maximus can help you establish one.
Five reasons to establish a Belize international foundation
Belize is the only-English speaking, parliamentary democracy in Latin America. It’s fully based on the British Westminster system, the Judiciary is independent and is a member of the Commonwealth. This means you’d be establishing your foundation in a solid legal environment.
Freedom from the state
Belize is as far as an intrusive state as you can find. Having such a small population (about 300,000) avoids having police, tax collectors, or public bodies breathing over you and your businesses, especially in Ambergris Caye and surrounding islands, where there’s the largest concentration of foreigners.
Great corporate environment
Belize has built a strong system having as its main goal to help investors and developers. So, it offers an extremely favorable offshore corporate regime that allows you to establish companies, foundations, and structures, fast, quickly, and easily. This has led Belize to gain the reputation of being one of the most cost-effective and beneficial regimes in Latin America.
Belize also offers one of the most favorable offshore banking regimes for expats. This allows you to transfer your funds into Belize banks swiftly. All this in a frame filled with the highest degrees of secrecy and privacy.
Thus, you can establish a full corporate structure with a Belize IBC, a bank account, and a trust or foundation with the highest degree of secrecy and avoiding tax exposure.
International Foundations in Belize
Foundations are an excellent, yet overlooked, asset protection possibility. We are legitimately amazed that not as many people as one would think, know or use this structure. It combines the best of both worlds between the IBC and the trust.
A foundation is similar to a trust in various ways. Both of them are created with the same objective: protecting assets. Also, both are attractive strategies for the same audience: investors interested in investing abroad and preserving their assets for future generations.
One of the primary aspects of the legal protection given to the foundation is privacy. Belizean law protects the privacy of the documents involved in the creation and maintenance of the foundation. Such confidentiality is one of the most attractive advantages of this type of structure. It implies that, by establishing the foundation and reserving the assets for it, you can protect this information.
What differences an international foundation from a trust and a LLC? But, what about an international LLC, which in Belize can be used for asset protection, or a trust? What does a foundation bring in comparison?
Foundations share some elements of a company and a trust. In terms of organizational and legal protection, an international foundation is similar to a company. It is established analogously and receives the same type of privacy and protection.
However, an international foundation is a separate legal entity that can be supervised by the taxpayer and is designed for its beneficiaries. In this, it is very similar to the way a trust works.
That’s why foundations are generally called the civil law equivalent of trusts. Belize is one of the few common law jurisdictions that have both figures. However, the main difference is that the foundation is a separate legal entity, while the trust is not.
Both are useful, and foundations are easier to understand for people from civil law jurisdictions, which makes it more attractive for them.
But the fact that foundations are legal entities is also a benefit. They can enter into contracts on their own behalf, while in the case of the trust, a trustee would have to do that representing the trust.
The fundamental difference between a trust and a foundation is that the latter is a legal entity created by the founder and operated the Foundation Council per the Foundation Charter, which may specify any legal purpose that can be fulfilled, whether personal, humanitarian, or non-humanitarian.
The Foundation Council answers to the foundation itself. In contrast, a trust represents only a relationship between the Trustees, the Settlor and the Beneficiaries whereby the settlor transfers the property to be held by the Trustees for the benefit of the Beneficiaries, in accordance with the deed. The trust is not a separate legal entity. The Trustees are directly responsible for the Beneficiaries, who have the right to take legal action against the Trustees if necessary.
Benefits of establishing a Belize International Foundation
When you look for asset protection, you have a variety of options, LLCs, trusts, captive insurance, and foundations. But a Foundation could bring you unlimited opportunities. If all of the previous advantages that we have mentioned sound good to you, wait for this.
You can establish an international foundation in Belize to favor parties, the beneficiaries, and also the founder. This flexibility makes this structure an attractive option for all types of individuals, investors, and even companies.
Also, a clear benefit of an international foundation in Belize is how it contributes to the estate planning process. When looking for options, two aspects that may concern you are the preservation of your assets and the ease of transferring them to your heirs. Both elements are possible and simple through the Belize International Foundation.
Firstly, by transferring assets to the foundation, they cease to be the property of the founder while they still are legally protected. Similarly, while they are under the authority of the foundation, they are also not owned by the beneficiaries. As a result, the assets have time to expand, increase in value, or remain protected for as long as necessary.
The following strong protection points are found in the Foundation Act:
- The law identifies a variety of different properties that might be included in the endowment as “exempt property” and, therefore, not available to satisfy any legal process, such as bankruptcy.
- The elimination of any community property rights upon transfer to a foundation.
- The endowment is, according to the law, “free from the control or interference of a spouse of a founder or a beneficiary or a parent of any minor beneficiary, and from all foreign legal proceedings.” (Same as the trust)
- Foreign law is disregarded concerning the validity of a foundation or the contribution of property to a valid Belize foundation. This provides asset protection against creditor claims against assets transferred to the foundation without the intent to defraud. Foreign judgments against Belize foundations aren’t recognized.
- It establishes a high level of complexity to reverse any transfer of property to the foundation that became part of the endowment, which also comes with an associated difficulty of proving any attempt to defraud a creditor.
- The Act says that “the Court shall not recognize a cause of action that seeks to establish a right to the foundation endowment, or the transfer, encumbrance or restraint of the endowment based upon principles of community property, equitable distribution, spousal, familial, heirship or other rights that depend upon the establishment or existence of any familial or personal relationship.” Thus, it is protected against forced heirship and spouse and family claims.
Tax Benefits of a Belize International Foundation
It isn’t a secret that high net worth individuals are exposed to prohibitive taxes if they don’t have an adequate tax planning strategy. Creating an international foundation reduces this tax exposure effectively and legally.
When you place assets in an international foundation, they aren’t yours anymore. Consequently, you do not have to pay taxes over them. The same applies to the beneficiaries, so they are not taxed either.
In Belize, all assets you hold in your foundation will be protected from a number of taxes, such as:
- Corporate tax
- Income Tax
- Withholding taxes
- Stamp duty
- Capital gains tax
- Inheritance taxes
- Tax on assets
- Earnings Tax
In short, an international foundation acts as a shield for your assets. As there is no taxation on them, they can increase their value almost without risk.
If you wish to restrict the financial erosion of your assets, an international foundation may be the ideal structure for you.
Establishing a foundation in Belize
The International Foundations Act of Belize applies only for non-residents. The founder and all beneficiaries must be non-resident visitors, and the foundations cannot include any ownership interest in real estate.
To establish a foundation, you need to start with the name. It should not already be in use in Belize and should end with the word “foundation” or a variant of it.
Then, you will need to transfer your assets and draw up a foundation charter. It must contain relevant information such as the designated beneficiaries, the purpose of the foundation, as well as the name and address of the registered agent.
When you finish the bylaws, you can officially start the registration of your Foundation in Belize. After 30 days of the application, your institution will be included in the Register of International Foundations. You will also receive a Certificate of Establishment along with the official registration number.
A Belize Foundation must be registered to be valid and enforceable. However, the registration doesn’t require submitting the charter, and the information you provide is kept private. The registration must be renewed every year.
Along with this process, there are several key members. You first have the founder, namely, the person who creates it. A foundation can have one or many founders and beneficiaries. Any or all of them can be natural or legal persons There must also be a foundation council consisting of several members. And finally, there must be a local registered agent or secretary of the foundation operating from Belize.
The foundation council must comply with the following requirements:
- At least one member
- Members may be natural or corporate persons.
- At least one member must always be resident in Belize.
- A member may not be a beneficiary of the foundation.
- A Secretary who is permanently resident in Belize.
The foundation charter can also establish a protector with a wide array of powers, rights, and duties. It may or may not be a member of the council.
Foreign foundations may go to Belize and continue functioning under Belize law. Similarly, a Belize foundation may leave Belize and move to another jurisdiction.
What else should I know about a Belize international foundation?
First of all, the foundation may not engage in business in Belize except to the extent of the essential activities required to support the main purpose of the foundation. Also, any transfer of assets to the foundation is irrevocable.
The Foundation Act contains an anti-alienation clause. It forbids any control over any interest in a foundation by a founder or beneficiary in the following manners:
- Anticipation of income or principal,
- Operation of foreign law,
- Claims of any creditors or claimants against the founders or beneficiaries, or
- A spouse of a founder or beneficiary.
Nonetheless, any beneficiary may enforce the administration of the foundation following its terms, bylaws, and Belize law. A Beneficiary can also renounce his interest in a foundation.
Lastly, a foundation can be established for any stated period, even an indefinite period. Despite the fact that the name “foundation” is often associated with charitable purposes, it doesn’t need to have a charitable purpose.
What can we do for you?
The Belize International Foundations regime provides a robust frame that combines simplicity with strong asset protection. Coming from a common law jurisdiction, the Foundations Act replicates a civil law foundation without unnecessary complications. The Belize foundation is, in a way, a hybrid of a trust and an IBC.
And, as usual, we can help you with it. We work with some of the best asset protection experts in Belize, which can help you set up your foundation quickly and easily.
We offer all primary services regarding your foundation, from drafting the charter and registration to acting as a secretary or local foundation council member and offering additional tax and asset protection advice.