A recent study, as reported by the Caribbean News Network, has revealed that the vast majority of business managers, professionals and executives in Britain recognise that the use of offshore financial centres (OFCs) provides a competitive advantage for businesses operating internationally.
The OFCs, often stigmatised as ‘tax havens’, have after all gained acceptance in the international financial order. While there are still some dark clouds on the horizon (for example, Senator Carl Levin’s most recent campaign ‘Business and Investors Against Tax Haven Abuse’), there appears to be a general recognition by the G20, albeit grudgingly, that so long as the OFCs keep in place a legal and regulatory framework, providing for an effective exchange of tax information, as well as a robust anti-money laundering and terrorism compliance system, they would be allowed the right to exist.
TIEAs: Belize is on the ‘White List’
Realizing the importance attached by the G20 to Tax Information Exchange Agreements (TIEAs), Belize made rapid progress in 2010 in concluding TIEAs. As at 31 October 2010, Belize had signed TIEAs with 13 countries, namely, United Kingdom, Australia, Belgium, Netherlands, Sweden, Norway, Denmark, Finland, Iceland, Greenland, the Faroes, Portugal and Ireland.
As a result, Belize has been placed by the OECD into the category of jurisdictions that are considered to have substantially implemented the internationally agreed tax standard (‘the White List’).
International Foundations Act, 2010
As new offshore structures and strategies serve as a catalyst to attract business in a higher competitive environment, Belize enacted the International Foundations Act 2010, which came into force on 12 April 2010. This Act combines the best of both worlds by replicating in a common law jurisdiction the essential characteristics of a civil law foundation, while avoiding unnecessary complications.
The salient features of this new law are:
- An ‘international foundation’ is defined as a foundation where (a) the founder or any other person who has contributed assets to the foundation otherwise than for full consideration is not resident in Belize, (b) none of the beneficiaries of the foundation is resident in Belize and (c) the foundation endowment does not include any land situate in Belize or shares of any company beneficially owning any land situate in Belize other than property for use as an office for the administration of the foundation.
- Unlike a common law trust, which is merely a relationship between the trustees and the beneficiaries, a foundation will be a legal entity in its own right and may hold property and do all other acts in that name.
- It makes provisions to facilitate efficient registration, renewal, striking off, restoration, dissolution, continuance and discontinuance of foundations.
- Every foundation shall at all times have a registered agent resident in Belize.
- Registration does not require the foundation charter to be registered, only particulars thereof need to be provided.
- Provisions exist for exchange control and tax exemptions to international foundations which are registered under the Act.
- There are special provisions for purposes of civil asset protection, eg, the non-recognition of foreign judgments and anti-alienation of the foundation endowment, as well as reduction of the limitation period for actions against foundations.
- Provision is made for the mobility of foundations both into and out of Belize.
- Provisions exist for substantial security of costs in respect of claims brought against foundations to avoid frivolous litigation.
- Specific provisions are included for disclosure of information relating to a foundation in pursuance of mutual legal assistance treaties, TIEAs or for the investigation and prosecution of money laundering and terrorism-related offences.
- To safeguard the confidentially of foundations, provision is made for judicial proceedings relating to a foundation to be held in camera unless otherwise ordered by the Supreme Court.
International Foundations Regulations 2010
These regulations complement the International Foundations Act and prescribe the fees and forms in respect of foundations. The main fees are as follows:
- US$200 for certificate of establishment of foundation
- US$100 for amendment or change in particulars
- US$200 for annual renewal fee
- US$50 for change of Registered Agent
- US$50 for certificate of continuance
- US$350 for certificate of discontinuance
- US$25 for certificate of good standing
- US$150 for certificate of dissolution
- US$500 for restoration to Register (after striking off)
Copies of both the International Foundations Act and the Regulations are available at www.ifsc.gov.bz .
Merchant Ships (Registration) Act 2010
This Act, which came into force on 1 November 2010, is a comprehensive piece of legislation and replaces the existing Registration of Merchant Ships Act as well as the Registration of Merchant Ships (Registration and Miscellaneous Provisions) Regulations. Some of the key features of this new law are:
- It is based on the International Maritime Organisation (IMO) model and is specially designed to address the needs of the contemporary maritime community.
- It makes improved provisions for registration of ships, transfers and transmissions, registration of mortgages and maritime liens, bareboat charter registration, limitation of liability for maritime claims, revocation of registration and other miscellaneous matters.
- A new form of statutory mortgage has been provided, thereby giving a future mortgagee the option of either adopting a simple statutory mortgage, or creating a contractual mortgage with additional terms and conditions.
- The order of priorities has been changed by placing a Belize mortgage on a higher plane than that of other competing ship registries.
- It updates the provisions of the Convention on Limitation of Liability for Maritime Claims by incorporating the 1996 Protocol.
- It excludes environmental damage from the purview of the limitation of liability provisions.
- It contains a new schedule of fees for registration of ships and other matters.
On the whole, the Act with its regime of modern and upgraded legal institutions is expected to prove attractive to shipowners and financiers, thereby placing the International Merchant Marine Registry of Belize (IMMARBE) at the cutting edge of the global shipping industry.
A copy of this Act is available at www.ifsc.gov.bz .
International Banking (Amendment) Act
This Act, which came into force on 3 March 2010, provides that all banking business conducted by Export Processing Zones (EPZs) or Commercial Free Zones (CFZs) with an international bank licensed under the International Banking Act must be reported to the Central Bank of Belize. The object of this measure is to improve the regulatory control of the Central Bank over EPZs and CFZs so as to better monitor suspicious transactions.
International Trusts Registry
Belize is one of the few jurisdictions that provides for mandatory registration of international trusts. The International Trusts Registry of Belize, which opened its doors for business in 2007, has proved to be extremely popular among investors for asset protection purposes. During the first 10 months of 2010, as many as 255 trusts were registered, bringing the total trusts registered to date to 1356.
The year 2010 marks the 20th anniversary of the birth of Belize’s offshore industry. Starting from scratch in 1990, Belize has built up a thriving international financial services business. There are at present 98,562 international business companies on the Register, 1356 international trusts, 852 ships flying the Belize flag around the world, and 152 licensed service providers. With a strong regulatory regime, Belize has earned the reputation of a jurisdiction ‘without compromise’. True to its mandate, the International Financial Services Commission of Belize, in collaboration with a pro-active Belize Offshore Practitioners Association, continues to ‘promote, protect and enhance Belize’ as an international financial centre.