Glen Wilson, Bay Trust examines how Belize has adapted to international directives through enacting substantial legislative changes ensuring its status as one of Central America's premier destinations for financial services.
The Use of Family Investment F…
Belize can trace its history and development back to the time of the Mayans, some 3500 years to 1500 BC, who built a strong foundation for the country that has stood the test of time.
December 21st 2012 is the end of the Mayan calendar, but it is not the end of the world as we know it, it is the new beginning of a Brave New World. With recent attacks on their services and ever increasing demands for tax transparency from Intergovernmental organisations such as the IMF and OECD, this particularly applies to what are known as “Offshore Financial Centres”.
Belize has risen to such challenges in the past and like many other OFC’s will be ready to face the challenges that will be brought before them in years to come.
In 1996 when I first started doing business in a very small way in Belize, it was an emerging jurisdiction just waiting to be discovered. Since that time it has enacted substantial legislative changes and introduced new legislation where required that places Belize at the forefront of the Caribbean jurisdictions in providing an efficient, straightforward solution for clients and their advisors.
Legislation has recently been enacted to allow the establishment of International Business Companies (IBC’s) and International Trusts.
Other notable recent legislative developments have enabled Belize to provide and compete on a global scale for services such as International Insurance and Mutual Funds both Public and Private. The enactment in 2010 of the International Foundations Act, 2010 has enabled the jurisdiction to compete with the Civil Law jurisdictions such as Panama.
The International Limited Liability Companies Act 2011
Perhaps the most important piece of legislation that has been enacted in recent times has been the International Limited Liability Companies Act 2011. This hybrid between the all too familiar IBC and a partnership provides a broad scope to the practitioner and advisor to structure the LLC according to its own rules and is not bound by statute.
The Act is confined to Non-Residents of Belize and the International LLC cannot do business with or be established by Belizean citizens. The LLC is exempt from taxes, duties and exchange controls with the exception of a transfer of property situated in Belize or shares in a local Belize Company.
Every LLC is required to have a Registered Agent in Belize. There is no requirement to prepare annual accounts, although a prudent person would normally consider this. LLC’s can also be migrated to and from Belize subject to stringent controls.
With the recent enactment of Limited Liability Company and Foundation legislation, Belize can compete with both Civil and Common Law jurisdictions. Both are very flexible vehicles and like the International Trusts it is mandatory for them to be registered.
These are the main tools available for advisors in offshore matters and they are complimented by stringent licensing procedures, Anti Money Laundering controls and sympathetic authorities.
Many companies have made Belize their jurisdiction of choice, from Investment Brokers and Managers through to International Insurance Companies and they have taken advantage of and benefited from the wide pool of experienced qualified staff that has grown to meet the demands of the practitioners.
The Society of Trust and Estate Practitioners, STEP, has established a Belize Chapter that is highly active in promoting the needs and services of the Industry as well as, of course, training the workforce to ensure they are able to meet any challenges which may arise in the future.
The volume of IBC’s has grown rapidly over the last 10 years to such an extent that 150,000 have been incorporated and though Trusts on the other hand have not grown quite as fast with around 1,600 registered, Belize is one of only two jurisdictions that requires the mandatory registration of trusts. In addition to this,, the asset protection provisions of the legislation make it one of the most secure jurisdictions available for the establishment of trusts.
Belize also has a robust network of tax treaties and has entered into Tax Information Exchange Agreements, TIEA’s, with the following countries;
Australia, Belgium, United Kingdom, The Netherlands, Norway, Sweden, Finland, Greenland, Iceland, Denmark, Ireland, France, Portugal, the Faroes Islands and Mexico securing Belize’s place on the OECD’s ‘White List’ of jurisdictions that have successfully implemented a series of internationally agreed tax standards.