Belize Trusts & Partnerships

Incorporation procedure, uses of trusts and legislation.

The Belize Asset Protection Trust: Legislative background

The Belize Trust Act was enacted in 1992. It expressly excludes trusts created in Belize from the operations of this Section. Subsections (6) and (7) of Section 7 the Trust Act provide as follows.

7 (6) where a trust is created under the law of Belize, the court shall not vary it or set it aside or recognize the validity of any claim against the trust property pursuant to the law of another jurisdiction or the order of a court of another jurisdiction in respect of:

  • the personal and proprietary consequences of marriage or the termination of marriage.
  • succession right (whether testate or in-testate) including the fixed shares of spouses or relative; or
  • the claims of creditors in an insolvency.

Subsection (6) above shall have effect notwithstanding the provisions of section l49 of the Law of Property Act, section 42 of the Bankruptcy Act and the provisions of the Reciprocal Enforcement for Judgments Act.

As noted earlier; section 149 of the Belize Law of Property Act (which is excluded by section 7(7) of the Trust Act) re-enacts the provisions of the Statute of Elizabeth. To a reader familiar with the statutory and common law background against which the Belize Trust Act was enacted it is immediately obvious, therefore, that a trust created under the law of Belize is excluded from the provisions of the law of fraudulent conveyance (as regards claims arising under any foreign law).

Subsection (2) of Section 7 of the Trust Act is a further source of misconception amongst practitioners. This section provides that a trust shall be invalid and unenforceable to the extent that the court declares that the trust was established by duress, fraud, mistake, undue influence or misrepresentation. Here to, a reader familiar with the law of Belize will recognize that "fraud" in this context means "an action of deceit at common law". It is distinct from the statutory provisions originally enacted in the Statute of Elizabeth and now contained in the Belize Law of Property Act, which render void-able voluntary conveyance made with intent to defeat creditors.

The other circumstances that has resulted in misconceptions regarding the Belize Trust Act is, as noted, the radical and innovative approach of the drafters of the Act. Practitioners who are familiar with having particular issues addressed in a particular way in the trust legislation of other jurisdictions are disoriented by Belizes departure from traditional solutions.

Thus, for example, most of the asset protection trust jurisdictions attempt to deal with fraudulent conveyance claims by mandating a statutory limitation period and imposition of other procedural requirements for the prosecution of such claims. The period may vary from six years (the standard limitation period for most actions) to two years in the case of more aggressive asset protection jurisdictions such as Nevis, the Turks & Caicos and the Cook Islands. In effect, in these jurisdictions the law of fraudulent conveyances continues to apply to trusts created in the jurisdiction, subject however to time constraints in effect a half-way house approach.

Belize, on the other hand, adopts an entirely different approach. Rather than applying a statutory limitation period to the Statute of Elizabeth provisions, it excludes these provisions altogether. In this context the question of whether the Settlor intended to defeat the claims of the creditor is irrelevant. In the absence of actual fraud, in the establishment of the trust, the assets of a Belize trust cannot be attached to satisfy the judgment of a foreign court based on any foreign law. This is so even if the transfer is done with the specific intention of defeating the claims of creditors, and whether the claim and/or the judgment arose before or after the trust was created.

This unequivocal position of the Belize legislation is of great assistance to judges who have to consider specific applications of the Belize Trust Act.

Understanding the operations of the Belize Trust Act (and particularly its asset protection features) requires both detailed knowledge of the legal background against which the legislation was enacted, and the careful study of those features of the Act that depart from traditional solutions. As recent judicial decisions have demonstrated, however, the advantages conferred by the Belize Trust Act may well be worth a detailed study of its innovations.

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10/08/2008
The 20th General Assembly of the Caribbean Organization of Tax Administrators (COTA) met in Belize for a conference held in the end of July. Belize and other 15 Caribbean countries were represented at this 4-day conference.
11/07/2008
A cheque for USD 12.5 million was presented by the Ambassador of Taiwan, His Excellency Ting Joseph Shih, to Belizean Prime Minister Barrow.
30/06/2008
In the end of June, the Prime Minister of Belize Dean Barrow spoke on behalf of the Caribbean Community (CARICOM) at a New York conference on the Caribbean 2008 about the issues of trade and investment.
25/05/2008
The BELTRAIDE is sending a delegation to the II SICA-Brazil Business Forum that will be held in San Salvador on May 29.
17/05/2008
Prime Minister Dean Barrow left Belize for Taiwan. He will visit Taipei to attend the inauguration of a new President of Taiwan Ma Ying-jeou.
16/05/2008
The National MSME Policy will be presented to Belize's Minister for Economic Development, Commerce and Industry, and Consumer Protection, to make Belize more competitive in the Commonwealth.
13/04/2008
Prime Minister Dean Barrow paid several important international visits to Miami. He met with World Bank officials, attended the Annual Meeting of the Inter-American Development Bank, and he met with the OPEC Fund for International Development (OFID) officials.
12/04/2008
Moody's Investors Service said that Cayman's maintenance of its favorable government foreign currency bond rating shows the economic resilience of this offshore jurisdiction in the face of uncertainty that surrounds the US economy.

12/04/2008 According to the announcement made by the Government of Belize on April 10, two important Memoranda of Understanding have been recently signed by the jurisdiction.

28/03/2008
Prime Minister Dean Barrow returned to Belize from Washington. He met with President Bush, President of the Inter-American Development Bank Mr. Luis Alberto Moreno, and Secretary General of the Organization of American States His Excellency Jose Miguel Insulza.
06/03/2008
Belize will benefit from an additional allocation of EUR 7.8 million granted by the European Commission as apart of continued support for the improvement and modernization of the jurisdiction's sugar and banana industries from the EU.
20/02/2008
The UDP had won general election in Belize, and the Prime Minister of Belize, Dean Barrow, has made an official announcement of a new cabinet.
07/02/2008
The Belize Trade and Investment Development Service has announced the launch of Action Plan for the coming year.
28/01/2008
A new regulatory body - Belize Land Transportation Authority - has been formed with a view to improve Belize's growing transportation industry.
12/12/2007
Three Belizean organizations - the Human Services Department, the National Garifuna Council and the Museum of Belize - received funding from UNESCO.
15/11/2007
The Ministry of Natural Resources and the Environment of Belize and the Energy and Environment Partnership with Central America (EEP) will organize the 10th Regional Forum on Renewable Energy that will be held on November 20-22, 2007 in Belize.
14/09/2007
MoneyGram International has decided to extend its operations to Belize. To offer an affordable and convenient money transfer service to its customers, the company chose 3 agents - Belize Bank, Omni Networks and Fultec Systems.
08/08/2007
According to the announcement made by the Ministry of National Development, the European Commission Delegation in Jamaica has sent the official confirmation that a grant of Euro 11.8 million (BZ$ 32.5 million) will be given to Belize under Envelope "A" of the 10th European Development Fund.
05/08/2007
The Belize Trade and Investment Development Service (BELTRAIDE), the main government agency, has announced that Belize's Investor Manual was launched on July 26, 2007 by the Minister of Finance, National Development and Public Service, the Rt. Hon. Prime Minister Said Musa and BELTRAIDE.
16/07/2007
As far as providing accurate, efficient and trustworthy data on Belize has been one of the crucial objectives of the government of Belize, it needed to launch the Statistical Institute of Belize (SIB). On July 3, the launch of the Statistical Institute of Belize was announced by the Government.
03/07/2007
Belize was visited by Nicaraguan President Daniel Ortega. On June 29, 2007, he went directly from Mexico to San Pedro with a view to attend 2 sub-regional summits.
20/06/2007
The President of the United Mexican States, H.E. Mr. Felipe Calderon Hinojosa has been invited to Belize by Prime Minister of Belize, Right Honorable Said Musa. The Mexican President is planning to visit Belize on June 29-30, 2007.
13/06/2007
The opening of the newest branch of Scotiabank in Punta Gorda to offer a full range of personal and business banking services to residents of Punta Gorda and the surrounding villages has been recently announced.
27/04/2007
Belize has signed Cooperation Agreement with Central American Court. The agreement between the Supreme Court of Belize and the Central American Court of Justice has been signed by Chief Justice of Belize, Abdulai Conteh, and the President of the Central American Court of Justice, Dr. Ricardo Acevedo Peralta.
15/03/2007
Fitch Ratings has assigned an "A'" rating to Belize Sovereign Investments III Limited Notes (BSI III). The rating assigned to BSI III notes is substantially supported by the financial strength of the insurance provider and by the default probability of the Belize's government.
02/03/2007
The closure of debt exchange has been announced in Belize. The bonds to be issued will replace 98% of Belize's commercial external debt. Under the new plan, Musa expects to save USD 301 million in debt servicing costs.
19/01/2007
Minister of Education and Labour Hon. Francis Fonseca announced at a press conference that the minimum wage for agriculture workers will increase by 25% and for shop assistants and domestics by 33%. The changes were announced on January 17 and will take effect on April 1.
29/12/2006
In the end of December, an open letter addressed to the international financial community was published by the International Monetary Fund. The IMF has welcomed the progress, which Belize authorities have made.
18/12/2006
The Belize Government has launched an offer to exchange the country's outstanding commercial indebtedness in return for new USD bonds that will be issued by Belize.
08/12/2006
The Inter-American Development Bank announced that it had approved a USD 25 million fast-disbursing loan for Belize to support its government's agenda of reforms regarding restoring macroeconomic and financial stability, improving its business climate and raising investors' confidence.
31/10/2006
Belize will take part in changing Caribbean economy as it will be represented by its Prime Minister, Rt. Hon. Said Musa, at an upcoming conference in London called "Transforming the Caribbean Economy - new avenues for investment".
30/09/2006
The Government of Belize signed an Association Agreement with the Central American Bank for Economic Integration. The agreement enables Belize to be incorporated to CABEI as a non-founding Beneficiary Member.
28/09/2006
The Government of Belize admitted last week that it was close to default and will have to restructure is debt, although a deficit of GDP was reduced from 9% to 3% in just two years. The Prime Minister Said Musa denies the forthcoming devaluation.
01/12/2005
The Central Bank of Belize announced that United Exchange International Bank is not licensed to provide banking and financial business in or from within Belize.