Belize Offshore Trusts

A trust is a legal entity in which one person transfers their assets or property to the name of another individual or company called a trustee. When established in an offshore jurisdiction or tax haven trusts are very beneficial in that the taxes such as estate tax, business tax among other forms of taxation are not applied to Trusts or assets which make up the Trust. Trusts also make very good vehicles for asset protection. In Belize, a trust, according to the legislation, exists when a person holds property that is not part of their estate for a beneficiary. A Belize trust could be for charitable or non charitable purposes and the assets that can be transferred to a Belize trust can be real tangible or intangible. An exempt trust or offshore trust in Belize is regulated by the Belize Trust Act. Belize offshore trusts are distinguished from Belize onshore trusts based on the location of the assets held in the trust; whether they are in or outside Belize.

The Belize Trust Act stipulates that a Belize offshore trust can be created by oral declaration or in writing and can also be willed. There are no formalities or technical expressions required when writing up an offshore trust, which is accepted as long as the intentions of the settler are clearly stated. According to legislation, offshore trusts are invalid if they propose anything contrary to the laws of Belize. The beneficiaries of any Belize trust must be clearly stated and identifiable if not the trust will be considered invalid. A trust which has been established by fraud or undue influenced will not be recognized and therefore is invalid.

There are two types of Belize trusts that can be formed. These are charitable and non-charitable trusts. Charitable offshore trusts are considered charitable as long as they benefit one or more special purposes. Charitable offshore trusts in accordance with the Belize Trust Act can be formed for the following purposes: advancement of education, protection of the environment, relief of poverty, the advancement of human rights and fundamental issues among other purposes. Charitable trusts in Belize must not have more than four (4) trustees. These trusts can be created with an unlimited life span.

Non-charitable Belize offshore trusts can be formed for the purpose of safeguarding assets or wealth against forced inheritance, civil litigations amongst other reasons. A non charitable trust can be regarded as such if the protector is capable of enforcing the trust. The protector can be a trustee or a beneficiary of the trust. The minimum number of trustees for such trusts according to the trust legislation is one (1). A trust is not considered valid if there are no trustees or the numbers of trustees are fewer than what is stated by the terms of the trust. Non-charitable trusts have duration of a maximum of one hundred and twenty (120) years.

Trusts in Belize, as well as Belize company, are considered to be offshore or exempt trusts if the beneficiaries of such trust in any year do not reside in Belize, if the trust does not hold or include any land in Belize and if the settler is not a resident of Belize in any year. Such trusts are exempted from taxes such as income tax and business tax. If death occurs during that year the assets if the trust is exempted from estate tax, inheritance tax, succession tax or gift tax upon death. Any transactions carried out on behalf of such a trust are exempted from stamp duty.

Registration of exempt trusts with the Registrar is optional however the information (names of trustees and purpose of the trust) must be submitted to the International Financial Services Commission; this information is not available to the public. Only persons with the written consent of the trustee can access or inspect such information. Belize exempt trusts must be registered through a licensed offshore service provider, who will outline the applicable registration and administrative fees. The registration of a trust in Belize is most affordable and a very short and simple process. The documents indicating the names of the trustees and purpose of the trust are all the paperwork required. A Certificate of Registration is given by the Registrar. Like with the International Financial Services Commission the trust register can only be inspected with the written permission of the trustee or trustees.

There are many benefits to setting up an offshore or exempt trust in Belize. A trust in Belize can go a long way in reducing taxes, a trust provides asset protection and can protect from forced heirships.