The Benefits of Belize
Part 2 of the article Increase Your Flexibility, Decrease Your Taxes: The Benefits of an Offshore Trust reprinted from International Living
Belize has achieved notoriety because it has taken the strongest legislative measures to protect the interests of a trust beneficiary over those of the settler's judgment creditor.
For example, in most of the U.S. states, if litigation arises within one year (often longer) of a trust structure being set up, the courts will "look back" to the trust-creation date and disallow the trust, so that the creditors are able to reach the assets.
By contrast, under Belizian law, once a trust is established, even if litigation begins within one week, the trust assets are protected and beyond the reach of any creditors.
Furthermore, a trustee cannot comply with a settler's demands if those demands are made under duress.
Under Belizian law, a settler's demand is deemed to be made under duress if it is made pursuant to a court order. A settler thus can comply with a court order, to reveal assets and know that, in fact, no disclosure will be made.
What you'll pay - All reputable companies publish standard fee scales, which are often on an ad valorem basis and which differ depending on the jurisdiction. Investment-management services normally entail an additional charge.
Many trust companies will also consider fee quotations on an individual basis. There are often good reasons to individually negotiate fees when, for example, the trust in question holds substantial realty, shares in private companies, or cash balances. In essence, the trust company wishes to be paid for the responsibility that it undertakes when it becomes a trustee and also for the administrative work that will need to be performed.
Selecting a trust company - By far the most important decision when creating a trust is who should be the trustee. It is vital that you have confidence and empathy with the trustee and genuinely believe that he will always put forth his best endeavor to benefit your family and preserve and enhance your wealth.
A professional trust company, when acting as trustee, will ensure that all trust documentation is confidential.
The company should enjoy a superior credit rating, have significant assets under management, and develop a professional relationship with the settler.
IBCs - Belize's Other Perk
In Belize, a trust is not the only way to keep your assets from prying eyes and tax collectors. The International Business Companies (IBC) Act of 1990, based on the IBC legislation of the British Virgin Islands, provides the opportunity for foreign investors to incorporate in Belize. This IBC legislation is among the easiest to use in the world -- a Belizean IBC can be formed in as little as one hour, and fees are as low as $700.
A Belizean IBC requires only one shareholder and one director, each of whom can be either an individual or a corporation. An IBC may have shares in issue, either register or bearer. Meetings of shareholders and/or directors can take place in any country in the world, at any time, and the directors and shareholders can attend by proxy. Your IBC is not required to have staff members or to establish an office in Belize. Most important, the person forming a Belizian IBC can conceal his identity, acting neither as shareholder nor director. And IBCs are not subject to any foreign-exchange controls.
As with a Belizian trust, an IBC, because it does not produce income in Belize, is exempt from all forms of income tax in the country, Furthermore, IBCs are exempt from capital-gains taxes, inheritance taxes, and stamp duties.
Copyright 2002 Nagel & Associates, LLC