By Rishi Alain Mungal, Legal Counsel for Morgan & Morgan Trust Corporation (Belize) Ltd.
Belize is an English Commonwealth territory located within mainland Central America. The legal system is based on English law and the country has an independent Parliament which creates domestic legislation. The International Foundations Act of 2010 is the relevant legislation that was enacted to allow the creation and administration of International Foundations in Belize.
A Belize International Foundation is formed when the Founder is not resident in Belize, none of the Beneficiaries of the foundation are resident in Belize and the Foundation Endowment (assets of the foundation) does not include any land situated in Belize or the shares of any company beneficially owning any land situated in Belize other than property for use as an office for the purpose of the administration of the foundation, or where books and records of the foundation are prepared or maintained.
The Foundation is a legal entity comparable to that of a company. The Foundation has constitutional documents in the form of Charter and Bylaws. Assets are held by the foundation for the purposes set out in the foundation’s constitutive documents. There is a Foundation Council which is responsible for fulfilling the purpose of the foundation. Beneficiaries have contractual rights to enforce the operation of the foundation in accordance with its constitutive documents.
A Foundation may be established for a Charitable Purpose; a Non-Charitable Purpose; for both Charitable & Non-Charitable Purposes; or for no purpose, other than the Benefit of a Founder, a Beneficiary or both Founder & Beneficiary.
A Founder of a Belize International Foundation may be:
(i) A person who establishes a foundation;
(ii) A person on whose behalf a foundation is established; or
(iii) A person who makes any disposition of property to a foundation.
A foundation may have more than one founder.
A Founder shall not serve as protector of the foundation that he established or to which he disposed property.
A Founder may be a beneficiary, including the sole beneficiary, of a foundation that he establishes.
A Beneficiary of a Belize International Foundation means a person:
(i) who is identifiable by name or is ascertainable by reference to
(a) a class, or
(b) a relationship to a person, whether or not living or in existence at the time of the registration of the foundation or at the time which, under the terms of the foundation charter, is the time by reference to which members of a class are to be determined; and
(ii) who is entitled to benefit under the foundation charter or by-laws or in whose favour a power to distribute any part of the foundation endowment may be exercised.
The Foundation Council shall have the authority to accept any property at any time from any person or entity by contribution, sale, loan, gift, testamentary or other disposition pursuant to the foundation charter.
The general powers and duties of the Foundation Council are as follows:
(i) to direct the administration of the assets of the foundation;
(ii) to exercise the powers of the foundation, directly or indirectly, through the employees and agents of the foundation;
(iii) to enter into any transactions, contracts or other lawful business that may be suitable or necessary to fulfil the purposes of the foundation;
(iv) to provide information relating to the property endowment to the beneficiaries of the foundation and the protector, if any;
(v) to make distributions or applications of all or any part of the property endowment or the income of the foundation; and
There must always be at least 1 Belize Resident Member of the Foundation Council.
All property designated by a founder, and conveyed or transferred to a foundation by deed, bill of sale, assignment, foreclosure, bequest, distribution, operation of law or by other disposition is the Endowment of the foundation.
Assets acquired by the administration of the foundation and its endowment are also part of the Endowment. The Endowment includes property acquired by right accruing to the foundation as a substitute or replacement for property that has been destroyed, damaged, removed or acquired in any other way by the administration of the Endowment.
The Endowment also includes all profit, gain, appreciation or other accretion to the property.
Information required to be filed at the International Foundations Registry
(i) The Name of the Foundation;
(ii) Date of execution of the Foundation Charter;
(iii) Name & Address of the Registered Agent;
(iv) Name & Address of each Member of the Foundation Council;
(v) Name & Address of each Protector (if appointed);
(vi) The purpose of the Foundation (charitable or non-charitable);
(vii) The date of submission of the Certificate of Belize Foundation Council Member to the Registrar;
(viii) If a re-domiciled foreign foundation (if applicable):
(a) the law under which the foundation was created;
(b) the original date of registration of the foundation in its original jurisdiction (or original date of execution if original date of registration is not available);
(c) the date of amendment to provide for the law of Belize to be the governing law of the foundation;
(ix) Changes as regards any Member, Beneficiary or Appointee under Power of Attorney.
Highlights & Benefits of Belize International Foundation
- The Foundation can be established with just Charter (Bylaws not mandatory)
- Neither the Foundation Charter nor Bylaws have to be filed or registered on any publicly accessible records or database.
- The Foundation can be established for an indefinite period.
- There is no requirement for any part of the endowment to be paid into the Belize Registry of International Foundations or to any Belize authority.
- Protector(s) may be appointed with powers, rights, duties and responsibilities as may be specified in the foundation charter and/or by-laws.
- The Foundation shall not be subject to any income tax, business tax, withholding tax, asset tax, gift tax, profits tax, capital gains tax, distributions tax, inheritance tax, estate duty or any other like tax based upon or measured by assets or income originating outside of Belize or in connection with matters of administration that may occur in Belize.
- An instrument relating to a transfer of property to or by an international foundation is exempt from the payment of Stamp Duty (unless the instrument relates to a transfer of property situated in Belize, including any interest in land in Belize or in shares in a company incorporated under the Belize Companies Act.
- Founder, Protector, or Council Member may be a Corporate Body.
- Exclusion of foreign law and protection from forced heirship claims