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Belize International Foundations

Belize International Foundations

June 2012

What is a Belize International Foundation?

A Belize International Foundation is a hybrid between a trust and a company. It is recognized in the civil law jurisdiction and in common law jurisdiction. It replicates in a common law jurisdiction like Belize, the essential characteristics of a civil law foundation while avoiding unnecessary complications. It is hoped that a foundation established under Belize law will prove to be an ideal vehicle for asset protection purposes and will find favour with investors from both the common law  and civil law countries.

Laws

The Belize International Foundation is regulated by the International Foundations Act, 2010

Registered Agent

• A Foundation must be registered by a Licensed Registered Agent in Belize.

Founder

• A Foundation is established by a founder who has no residential ties to Belize
• The Founder can also be a beneficiary, but cannot be the protector of the Foundation
• The Founder has no power to direct the affairs of the foundation. The Foundation is to be run solely and independently by the Foundation Council, as a result the Founder cannot as a Council Member.
• There can be more than one Founder

FoundationCouncil

• A Foundation shall at all times have foundation council, whose powers, rights, duties and obligations shall be set out in the foundation charter, its by-laws and Foundation Act for the benefit of the beneficiaries and to effectuate the purpose of the foundation
• Foundation Council carries out its duties in keeping with the Foundation Charter
• FC will enter into any transaction, agreement or business as may be necessary to fulfill the purpose of the foundation, as long as they are not contrary to law, morality or public order.
• FC will inform the beneficiaries about the economic situation of the foundation as stipulated by the foundation charter or by-laws/regulation
• FC will hand over to the beneficiaries the assets or resources settled in their favour in the foundation charter or by-laws/regulations
• Each Foundation must have a local Foundation Council Member in Belize
• The following persons cannot be members of the FC:- a minor, an incompetent (non composmentes), the Foundation’s Protector, anyone disqualified fro being a member of a foundation under Belize Law, disqualified from being a director of a company under Belize law
• A member of the Foundation Council cannot be a beneficiary of the Foundation
• The minimum number of FC member is one (1). There is no limitation on the maximum number of members. There has to be at lease one (1) Belize Resident member at all times.

Beneficiary

• There are persons who are chosen by the Founder at the onset, either in the foundation charter itself of in some related letter of wishes or by the Foundation Council or by the Protector or Guardian.
• None of the beneficiaries is a resident in Belize

Protector

• Oversees the activity of the Foundation Council
• Has power to remove a member of the Foundation Council
• And has power to approve the actions of the Foundation Council.
• Has responsibility of directing the Foundation Council in accordance with the provision of the
Foundation Charter
• The Protector cannot be a beneficiary
• The Protector cannot be a Council Member
• More than one can act as a Protector
• Cannot act as a Founder

Restrictions

• Applies only to non-residents of Belize
• The Founder cannot be a resident of Belize
• Non of the Beneficiaries of the foundation is a resident in Belize
• The Foundation endowment does not include any land situated in Belize or the shares of any company beneficially owning any land situated in Belize other than property used for office/administration of the foundation or where books /records of the foundations are prepared or maintained.

Establishment of a Foundation

A Foundation shall be established upon proper execution of a foundation charter or equivalent document governed by the laws of Belize, by a Founder and the members of a Foundation council, by which a founder makes a disposition of rights, title or interest in property to the foundation for a specific purpose. A foundation can be established for an indefinite period and can be established for any purposes which are capable of fulfillment and are not unlawful, immoral or contrary to public policy.

Dissolution of a Foundation

A foundation shall be dissolved if it was established for a definite period and the period has expired or where the foundation can no longer reasonably achieve its purpose or where it has become impossible to reasonably administer or maintain the foundation. A Foundation can also be voluntary dissolved or struck off the Registrar for non payment of fees and subsequent restoration to the Register.

Disregarding Foreign Law

Provisions are made under the Foundation Act for disregarding foreign law concerning the validity of a foundation or the disposition of property to a foundation which is valid under the laws of Belize, thereby providing asset protection against creditor claims in respect of assets transferred to the foundation without intent to defraud.

Registration of a Foundation

Every Foundation which specifies the law of Belize as the governing law must be registered with the registrar; otherwise it will be invalid and unenforceable. The registrar shall maintain a Register containing the name of the foundation, the name and address of the registered agent and the date of registration. The Foundation Charter is not required for registration only the particulars thereof would need to be supplied.

The name of the Belize Foundation must end with the word Foundation or its abbreviation:- Found or Fdn.

There are restricted names and those are words like “Building Society, Chartered, Cooperative, Imperial, Municipal, Royal, or word conveying a similar meaning also words like “Assurance, Bank, Insurance or Trust are prohibited.

The Foundation Certificate is only valid for one year and therefore subject to annual renewal. Renewal of registration takes effect from the date of expiration of the last certificate.

Registered Agent

Every Foundation governed by Belize law shall at all times have a Registered Agent in Belize.

Foundation Endowment

The Foundation endowment is all property designated by a Founder, and conveyed or transferred to a Foundation. The Foundation Act contains the rule against alienation.

Accounts and Records of the Foundation

A foundation is required to keep such accounts and records as the foundation council considers necessary or desirable in order to reflect the financial position of the foundation, together with minutes of all meetings of the foundation council and copies of all resolutions consented to by the foundation council.

Mobility of Foundations both in to and out of Belize

A foreign foundation may come to Belize and continue as a foundation under Belize law subject to compliance with certain conditions. Provision is also made for a foundation to depart from Belize and transfer to some other jurisdiction.

Confidentiality of Foundations

The Act contains provisions to safeguard the confidentiality of foundations. However, the Supreme Court may order the disclosure of confidential information in certain circumstances, particularly to facilitate the investigation and prosecution of money laundering, terrorism and other related offences. It is further provided that all judicial proceedings relating to a foundation shall be held in camera, unless otherwise ordered by the Supreme Court.

Exemption of Taxes and Duties

The Foundation Act grants exemption to international foundations from taxes and duties. It also provides that an international foundation registered under the Act shall be regarded as being not resident in Belize for the purpose of the Exchange Control Regulations and will thus be exempt from exchange control restrictions.

Inspection of documents at the Registrar

The Foundation Act provides that no inspection or production of documents kept by the Registrar shall be permitted other than by the registered agent, except that any of the foundation council members of a foundation may, by notice in writing to the Registrar, authorise the person named in the notice to inspect a document or obtain a copy thereof.

Investigation of a Foundation

The Foundation Act provides that a founder, beneficiary or protector of a foundation, or the Registrar may apply to the Supreme Court for an order, directing that an investigation be made of the foundation or any company affiliated with it. Ancillary provisions have been made for the contents of the investigation order, powers of the inspector, the hearing and other related matters.

Asset Protection

Specific provisions are inserted for purposes of civil asset protection. Such provisions provide for non-recognition of foreign judgments and anti-alienation of the foundation endowment as well as the reduction of the limitation period within which to bring actions in relation to a foundation.

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