Belize flag
  • Legal entity with its own tax domicile.

  • Suitable for the protection and segregation of all tangible and intangible assets such as patents, copyrights, money, real estate

  • It also serves as a will

  • It may be a shareholder in other for-profit companies but cannot manage for-profit businesses on its own

Belize Private Foundation

Index Quick view
Private Foundation of Belize - Belize Private Foundation

Designed primarily for asset protection purposes, the Belize private interest foundation is a civil law alternative to the common law trust that is becoming increasingly popular with international investors. The essential difference between a trust and a foundation is that a trust is a relationship (not a legal entity) between the trustees and the beneficiaries created by a deed by which the settlor has transferred property to the trustees for the benefit of the beneficiaries; whereas a foundation is a legal entity in its own right and unlike trustees (who are accountable to the beneficiaries), members of the foundation board are accountable to the foundation.

Recently, a number of offshore financial centers in common law jurisdictions have enacted legislation to provide for the creation of foundations to stay ahead of this highly competitive industry. The law is largely based on similar legislation in Antigua, the Bahamas and Anguilla, although corresponding legislation in Panama and the Isle of Man has also been considered.

The law applies only to non-residents of Belize. It is linked to “international foundations” and does not deal with national foundations.

Key Features of the Belize Private Interest Foundation

The law seeks to make the foundation easier to use, in effect, a hybrid between an IBC and a trust. Provisions are made to facilitate and enhance in an efficient but unobtrusive manner the registration, renewal, cancellation, reinstatement, dissolution, continuation and termination of foundations, as is currently the case with IBCs and the IBC Registry.

Like an international trust, registration is mandatory for international foundations, with the international foundation invalid and unenforceable if not registered. Registration does not require the registration of the foundation's statute, only the details of the foundation need to be provided.

While the law grants full exchange control and tax exemptions to international foundations, the law expressly clarifies that these exemptions apply only to duly registered international foundations.

Specific provisions have been inserted for the purposes of the protection of civil assets. These provisions provide for the non-recognition of foreign sentences and the anti-alienation of the foundation's assets, as well as the reduction of the limitation period within which to bring actions against a foundation. A substantial guarantee is also provided for the expenses relating to claims made against international foundations. This is an interesting feature of Belize foundations as it seeks to discourage the establishment of frivolous disputes in Belize.

In addition, detailed provisions, clarifications and limitations are introduced with regard to the founder, the foundation's endowment, the charitable foundation, as well as other relevant entities and matters involving the foundation. Such an extensive codification essentially eliminates the legal guesswork in interpreting certain powers, rights and obligations. There are specific provisions for the permitted disclosure of confidential information under treaties having the force of law in Belize for mutual legal assistance in criminal matters, exchange of tax information, money laundering and prevention of terrorism, among other circumstances.

The fees specified in the Rules of the International Foundations are highly competitive compared to other jurisdictions. The application fee and annual renewal fee is only $200.00.

Overall, the Act combines the best of both worlds. It replicates in a common law jurisdiction such as Belize, the essential features of a civil law foundation while avoiding unnecessary complications. It is hoped that a foundation established under Belizean law will prove to be an ideal vehicle for asset protection and will find favor with investors from both common law and civil law countries.

The most common uses of Belize offshore foundations are:

  • Wealth protection
  • Inheritance/succession planning
  • Asset protection and management
  • Circumvention of the rules on forced inheritance
  • Charitable purposes
  • Pension funds
  • Hold art collections
  • Receive and manage capital and securities
  • Minimize international income, capital gains and estate taxes
  • Maintaining corporate control
  • Voting separation and economic benefits
  • Employee stock option schemes
  • Used by companies for employee benefit plans, retirement and stock option plans, insurance plans, and special financing arrangements
  • Recognized in both common law and civil law jurisdictions

The INTERNATIONAL FOUNDATIONS ACT of 2010 introduced Belize as a major player in the world of private interest foundations.

Belizean foundations can hold different types of assets:

  • Stocks, bonds and other securities of public or private companies
  • Intellectual property
  • Real Estate/Real Estate
  • Banking activities
  • Investment portfolios
  • Life insurance policies
  • Most other resource types
Tax Performance
As long as the founder, beneficiaries, property or assets, contributions to the foundation originate outside of Belize, the Belize Foundation is exempt from:
  • Any income tax
  • Professional fee
  • Withholding Tax
  • Wealth tax
  • Donation tax
  • Profit tax
  • Capital gains tax
  • Distribution tax
  • Inheritance tax
  • Wealth tax
  • Stamp duty

In addition to opening your Offshore Foundation, you will probably be interested in creating a life insurance policy on your taxation, taking up a second tax residence, in a country with territorial taxation, such as a residence in Panama or a residence in Paraguay