Country code – BZ
Legal basis – Common law
Legal framework – Trusts Acts 1993 (As amended)
Formal name – Trust
Settlor – The settlor is the person who establishes and whose assets are put into the trust. It may be either an individual or a legal entity. The settlor may also be the beneficiary of those assets and may reserve power to revoke, vary or amend the terms of the trust, make distributions and/or remove a Trustee. There may be certain protection from a subsequent bankruptcy after assets are gifted to the trust
Trustee – Trustees are natural or legal persons who hold the title to the assets and manage the trust, but they cannot benefit from it.
The trustee may be an individual or a company that is permitted to be a trustee by its jurisdiction of incorporation. No domestic trustee is required, although a Belize International Trust does require a Belize resident and licensed Trust Agent. A trustee may also be a settlor, a beneficiary, or a protector of the trust.
Custodian trustees are not permitted.
Beneficiaries – Beneficiaries are those who get benefit from the trust. Beneficiaries may be individuals or corporate bodies. The Settlor may also be named as the Beneficiary. The Trust may also be created for charitable purposes.
There are specific provisions to prevent beneficiaries from draining the trust of its assets and spending in a thrifty way. Trusts in Belize allows avoiding both probate and forced heirship rules.
Protector – A protector is not a mandatory party to all Trusts, but may be appointed by the Settlor. The function of the Protector is to supervise the Trustee, thus providing additional assurances to the Settlor that the trust assets are properly managed. The Protector may have the power to remove or replace the Trustee. The function of the Protector may be undertaken by the Settlor or the Beneficiary or a third party.
Trust deed – The document that sets out the terms upon which the trustee shall manage the trust. The Deed of Trust is not registered or filed with the government.
Disclosure - The names of the settlers and the beneficiaries are not included in the registration document that is required.
Protection from foreign judgments – The Trusts Law does provide provisions to ignore and not enforce judgments. The Hague Convention on Trusts does not apply in Belize.
Protection from creditors – The Trusts law does not repeal the Statute of Elizabeth, so transfers by the settlor to the trust may be set aside if the settlor transferred the property before the debt arose. The creditor must prove the fraudulent transfer of assets to the trust, which is clearly defined by the law. Creditors’ claims may be brought jointly. If a fraudulent transfer is proven, the trust may be declared invalid.
Protection for immigrant trusts – Trusts that migrate from other jurisdictions do not benefit from retroactive protection.
Community property – Community properties transferred to a Belize trust may not retain its community property character.
Exclusion of foreign law - There are exclusions included in the legislation to be able to exclude foreign law.
Choice of law – The choice of law of Belize to govern the trust or a particular aspect of that trust, is valid, effective and conclusive regardless of any other circumstances.
Duration - The maximum duration of a Belize trust is 120 years, except for a trust for exclusively charitable purposes, which can be of unlimited duration.
Compliance – Registration is required, but the trust deed is not registered or filed with the government. The Register of Trusts is not open for public inspection and is protected by confidentiality provisions of the law.
A trustee shall keep accurate accounts and records of the trustee’s trusteeship.
There are no reporting requirements for a trust in Belize, provided that all beneficiaries are resident outside Belize and no asset situated in Belize is held.
- Settlor as a beneficiary
- Bankruptcy protection
- Ignore foreign judgements
- Hague convention on trusts
- Choice of law is binding
- Protection from immigrant trusts
- Community property provisions
- Custodian trustee permitted
- Rule against perpetuities (years)
- Yes Specific exclusion of foreign law
- Yes Settlor can retain control
Protection of Settlor
Protection from foreign judgements
- Avoidance of forced heirship
- Spendthrift provisions
- Exclusion of Statute of Elizabeth laws
- Trust invalid if transfer fraudulent
- Creditor must prove fraudulent transfer
- Clear definition of fraudulent transfers
- Separation of creditor claims
- Statutory limitation on fraudulent transfer
Protection of Beneficiary
A trust established in Belize may not be subject to local taxes applicable to the assets and income of the trust, provided that no residents of Belize benefit from the trust and no physical assets are located there.
It must be noted that the choice of law of the trust would not be applicable to tax matters, which would be governed by the respective jurisdiction where the settlor, beneficiaries, assets or trustee are located, as applicable.
You should consult with your tax advisor or accountant to know the tax implications in your jurisdiction of residence when establishing a trust in Belize, transfer assets to it and receive profits from said assets.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- - Offshore Income Tax Rate
- - Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- 3.18% Social Security Employee
- 5.35% Social Security Employer
- 25% Personal Income Tax Rate
- 12.5% VAT Rate
- 30 Tax Treaties
Belize, formerly British Honduras, is a CARICOM and SICA member. Located in the northeastern corner of Central America, bordering to the north with Mexico and to the south and the west with Guatemala. The capital is the city of Belmopan and the most populated city is Belize City, which has the main port of the country.
Although is the only Central American country with English as the official language, its just over 380,000 inhabitants speak predominantly Spanish and Creole. Its currency is the Belize Dollar (BZD), which is currently pegged to the US$ (2:1), but most commercial establishments accept US dollars.
Belize is a constitutional monarchy with a parliamentary system of government. The Head of State is Queen Elizabeth II, who is represented in the country by the Governor General.
The executive power is headed by a Prime Minister, who heads the Cabinet of 13 ministers, plus 5 deputy ministers, who represent the majority political force of the Belizean Parliament.
The legislative power is bicameral, composed of a House of Representatives of 31 members democratically elected for a period of five years and a Senate of 12 members appointed by the Governor General from proposals of the Prime Minister, the leader of the opposition and of Various religious, economic and social institutions.
The Belizean economy is the smallest in the Central American region, but it is the third largest in GDP per capita, only after Panama and Costa Rica.
Belize has an economy based primarily on agriculture and services. Domestic industry is limited, constrained by relatively high-cost labor and energy, and a small domestic market.
Tourism attracts the most foreign direct investment although significant foreign investment is also found in the energy, telecommunications, and agricultural sectors. The stability of the currency is one of the attractions for foreign investment.
Belize's exports of goods and services account for over half of its GDP. The export products mainly consist of seafood such as shrimp, followed by sugar, citrus products, bananas and small manufactures.
Its Barrier Reef (longest in the Western Hemisphere), 127 islands, excellent fishing, safe waters for boating, scuba diving, and snorkeling, abundant jungle flora and fauna, and numerous Mayan ruins has bolstered tourism and ecotourism industry.
Belize is a well-known offshore jurisdiction for its privacy policies, tax advantages for non-residents and its full tax exemption for its domiciled International Companies. Although its banking sector is not as large as other offshore financial centers, it is gaining popularity in recent years.
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