Understanding Belize International Foundations - What You Need To Know
Contributed by Luigi Wewege At Caye International Bank
07 June, 2019
One of the most valuable tools for the foreign investor in Belize is the international foundation. In many ways, an international foundation is similar to a trust. They often achieve the same objectives, and both are appealing strategies to anyone interested in investing offshore and preserving assets for future generations.
Get to know the basics of Belize international foundations, the benefits of these financial structures, and how to use them to your advantage.
The Belize International Foundations Act of 2010
One of the biggest and most recent updates to investing in Belize is the Belize International Foundations Act of 2010. This piece of legislation is what made international foundations a possibility in Belize. One of the key aspects of this Act is that it protects the privacy of the documents involved in the creation and maintenance of the foundation.
This privacy is one of the most appealing advantages of this type of structure. It means that when you establish the foundation and set aside assets for it, you can protect this information.
The Belize International Foundations Act of 2010 also clearly states that foundations don't have to be charitable, although they can be. Foundations can be established as charitable, non-charitable or non-purpose.
You can design an international foundation in Belize to benefit the beneficiaries or to benefit the founder. You can even set up your foundation so that it benefits both parties. This flexibility makes it an appealing option for all types of people, investors, and even businesses.
Combining a Company and a Trust
A Belize international foundation is different from an IBC, or International Business Company. It is also unique when compared to a trust. However, there are certainly elements of both wrapped up in an international foundation.
In terms of legal protection and structure, an international foundation is similar to a company. It gets established in a similar way and receives the same kind of privacy and protection. However, an international foundation is also a separate legal entity that can be overseen by the donor and is designed for its beneficiaries. This is very similar to how a trust operates.
A Critical Component in Estate Planning
An obvious benefit of a Belize international foundation is how it can help the process of estate planning. When you begin estate planning for the future, you may be concerned with preserving assets and easily transferring assets to your heirs. An international foundation in Belize allows for both.
To start, transferring assets into the foundation means that they are no longer owned by the founder. Once within the Belize international foundation, the assets are legally protected worldwide. Everything held within the foundation is also not yet owned by the beneficiaries. As a result, the assets have time to grow, to increase in value, or to be protected for as long as is necessary.
For those who are starting to give some thought to their future estates, this is critical. You can start to take action and preserve your assets, but you don't have to transfer assets to others quite yet. You can take your time but enjoy peace of mind knowing that you have a structure set up and ready when necessary.
Taxation Benefits of a Belize International Foundation
While there are many reasons to establish an international foundation in Belize, there's no doubt that a substantial benefit is reduced taxation. When you place assets into an international foundation, they are longer yours. As a result, you can't be taxed on them. At the same time, the beneficiaries don't have them yet, either, which means they also can't be taxed.
In Belize, all the assets held in your foundation will be protected from a number of different taxes. These include:
- Business tax
- Income tax
- Withholding tax
- Stamp duty
- Capital gains tax
- Inheritance tax
- Asset tax
- Profits tax
In short, an international foundation is a shield for your assets. Taxation is nonexistent, allowing the assets to grow in value with virtually no risk.
If you want to limit financial erosion for your wealth, an international foundation may be the ideal structure for you.
How to Create a Foundation in Belize
First things first: It is time to come up with a name for your foundation. It must be a name that is not already being used in Belize, and it has to end with the word foundation or a variation thereof.
Then, you'll need to transfer assets and put together a foundation charter. Your charter should include pertinent details such as the designated beneficiaries, the purpose of the foundation, and the name and address of the foundation's registered agent.
Once your charter is established, you can officially register your foundation in Belize. Within 30 days of application, your foundation will be listed in the Register of International Foundations. You'll also receive an official registration number and get a Certification of Establishment.
There are several key players in the establishment of a Belize international foundation. First is the founder, or the person who creates it. There may also be a foundation council made up of several members. Then, there are the beneficiaries. Finally, there needs to be a local registered agent or foundation secretary who operates from within Belize.
Start Your Own Belize International Foundation
Clearly, an international foundation in a destination like Belize can have several important advantages. Although it doesn't have to be charitable or even have beneficiaries, it can be a great way to minimize taxation and kickstart the estate planning process.
Belize is not the only place where you can establish an international foundation. Since they became legal financial structures in 2010, however, options in Belize are growing increasingly popular for savvy investors. Plus, communication, cost of living, and amenities are all easy and appealing in Belize, making it a desirable destination for all kinds of investments, vacations, and financial opportunities.
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