What’s the best strategy for asset protection and wealth preservation in Belize?
Frik De Meyere
There are no silver bullets, period.
Any type of asset protection, tax strategy, estate planning, off-shore incorporation or dual citizenship strategy should be implemented in such a way that is applicable to you, to your lifestyle and to your goals. Find a company or person with whom you are comfortable and have confidence that they can help you navigate through what structure(s) could and should look like for your needs. There is no cookie cutter or “A-B-C”...
Any type of asset protection, tax strategy, estate planning, off-shore incorporation or dual citizenship strategy should be implemented in such a way that is applicable to you, to your lifestyle and to your goals. Find a company or person with whom you are comfortable and have confidence that they can help you navigate through what structure(s) could and should look like for your needs. There is no cookie cutter or “A-B-C”...
There are no silver bullets, period.
Any type of asset protection, tax strategy, estate planning, off-shore incorporation or dual citizenship strategy should be implemented in such a way that is applicable to you, to your lifestyle and to your goals. Find a company or person with whom you are comfortable and have confidence that they can help you navigate through what structure(s) could and should look like for your needs. There is no cookie cutter or “A-B-C” approach.
You have to be careful if you are a US citizen whenever you leave US soil because you can get a knock at the door from the IRS in physical or letter form. As a result, you have to be good at serving up some good coffee and an explanation as to what you are doing, why you are doing it, and where you are doing it; the whole nine yards. If you do not understand what you are doing, don’t do it.
Any type of asset protection, tax strategy, estate planning, off-shore incorporation or dual citizenship strategy should be implemented in such a way that is applicable to you, to your lifestyle and to your goals. Find a company or person with whom you are comfortable and have confidence that they can help you navigate through what structure(s) could and should look like for your needs. There is no cookie cutter or “A-B-C” approach.
You have to be careful if you are a US citizen whenever you leave US soil because you can get a knock at the door from the IRS in physical or letter form. As a result, you have to be good at serving up some good coffee and an explanation as to what you are doing, why you are doing it, and where you are doing it; the whole nine yards. If you do not understand what you are doing, don’t do it.
Posted December 1, 2014
David Drummond - Georgetown Trust
The question of the best strategy for asset protection and wealth preservation in Belize is one I get quite frequently. The answer very much depends on a person’s situation, and I recommend a multi-tiered approach.
We have asset protection structures that you can start with a minimalist asset protection structure-- a bank account. I can put money in a bank account in Belize and that structure, which is really nothing more than a bank account, is going to...
We have asset protection structures that you can start with a minimalist asset protection structure-- a bank account. I can put money in a bank account in Belize and that structure, which is really nothing more than a bank account, is going to...
The question of the best strategy for asset protection and wealth preservation in Belize is one I get quite frequently. The answer very much depends on a person’s situation, and I recommend a multi-tiered approach.
We have asset protection structures that you can start with a minimalist asset protection structure-- a bank account. I can put money in a bank account in Belize and that structure, which is really nothing more than a bank account, is going to protect me from economic risk or banking failure risk in the United States. This is one way to protect my assets, in which I have diversified by putting my money in a non-US banking institution. If there is a banking crisis in the States, this Belize bank will most likely remain solid. (There are reasons for this that I explain elsewhere.) So, this is a very simple, easy to do move that someone can use as a first step in their asset protection strategy.
You can also use a structural strategy, such as through a corporation, whether it is an LLC (Limited Liability Company) or an IBC (International Business Company), both of which are flow-through tax entities. There is a very fine distinction between what an IBC can do and what an International LLC can do, but from an asset protection structure, they are virtually the same. The difference is in how the income flows into and out of these companies. In a LLC, the income flows through the company and at the end of the tax year it is going to flow back to you and be assessed through you as a simple gain or loss out of the entity. In an IBC, that entity has the ability to retain earnings for US citizens if those earnings were earned outside of the United States.
Both of those entities have the same asset protection structure, but they are used for different functions. You can use these structures to protect assets from what I sometimes refer to as “the exes” – the ex-business partner, the ex-girlfriend, the ex-husband, the ex-wife. You have now given the LLC or IBC control of those assets and that entity does not respond to court mandates from a US jurisdiction. For that entity to give up its assets, someone has to come and sue you here in Belize and win a lawsuit against you here, which is more difficult to do simply because there are no class action lawsuits that you have to be bothered with, and also, my favorite reason, which is “loser pays”. If the loser can’t pay, the lawyer that represented the losing party has to pay. There these and a number of other reasons that make it more difficult for someone to just come and get you on a harassment suit or a “pay him to go away” suit.
Finally, the ultimate asset protection structure is a foreign trust, which is a Belize asset protection structure in which you are giving your assets to another entity. On an irrevocable foreign trust, those assets are no longer yours and therefore you can no longer be sued for them. So, the ultimate asset protection structure is an international foreign trust.
We have asset protection structures that you can start with a minimalist asset protection structure-- a bank account. I can put money in a bank account in Belize and that structure, which is really nothing more than a bank account, is going to protect me from economic risk or banking failure risk in the United States. This is one way to protect my assets, in which I have diversified by putting my money in a non-US banking institution. If there is a banking crisis in the States, this Belize bank will most likely remain solid. (There are reasons for this that I explain elsewhere.) So, this is a very simple, easy to do move that someone can use as a first step in their asset protection strategy.
You can also use a structural strategy, such as through a corporation, whether it is an LLC (Limited Liability Company) or an IBC (International Business Company), both of which are flow-through tax entities. There is a very fine distinction between what an IBC can do and what an International LLC can do, but from an asset protection structure, they are virtually the same. The difference is in how the income flows into and out of these companies. In a LLC, the income flows through the company and at the end of the tax year it is going to flow back to you and be assessed through you as a simple gain or loss out of the entity. In an IBC, that entity has the ability to retain earnings for US citizens if those earnings were earned outside of the United States.
Both of those entities have the same asset protection structure, but they are used for different functions. You can use these structures to protect assets from what I sometimes refer to as “the exes” – the ex-business partner, the ex-girlfriend, the ex-husband, the ex-wife. You have now given the LLC or IBC control of those assets and that entity does not respond to court mandates from a US jurisdiction. For that entity to give up its assets, someone has to come and sue you here in Belize and win a lawsuit against you here, which is more difficult to do simply because there are no class action lawsuits that you have to be bothered with, and also, my favorite reason, which is “loser pays”. If the loser can’t pay, the lawyer that represented the losing party has to pay. There these and a number of other reasons that make it more difficult for someone to just come and get you on a harassment suit or a “pay him to go away” suit.
Finally, the ultimate asset protection structure is a foreign trust, which is a Belize asset protection structure in which you are giving your assets to another entity. On an irrevocable foreign trust, those assets are no longer yours and therefore you can no longer be sued for them. So, the ultimate asset protection structure is an international foreign trust.
Posted March 11, 2015
Ryan Wrobel - Wrobel & Co., Attorneys-at-Law
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Relative to entering into business or investing in Belize, in general the best way to protect your personal assets is to utilize some type of corporate vehicle to engage in business. Doing so provides a barrier between the assets of that company and personal assets invested by the shareholder. This is quite popular in Belize, and would be similar to how businesses operate in the United States through a C corporation or a limited liability corporation (LLC). Relative to entering into business or investing in Belize, in general the best way to protect your personal assets is to utilize some type of corporate vehicle to engage in business. Doing so provides a barrier between the assets of that company and personal assets invested by the shareholder. This is quite popular in Belize, and would be similar to how businesses operate in the United States through a C corporation or a limited liability corporation (LLC). We represent quite a few clients who are actually foreign companies that chose to enter into this country to do business that we register as foreign companies. Here in Belize, they obtain all the rights and responsibilities as a local company so there’s also the ability to use your foreign company to conduct business in Belize after the registration process and procedure has been completed.
Belize has in international services regime. One of the most popular products is called an international business company. An International Business Company (IBC) can be set up in Belize specifically to conduct business outside of Belize. It does afford asset protection and liability protection in a corporate form. It is very similar to being incorporated to the United States or Canada but your company would be incorporated in Belize so the laws that govern that particular company are the laws of Belizean law. This has been quite a popular vehicle for businesses that own assets in other jurisdictions.
The advantage of setting up your corporation in Belize is that your corporation would be held to the relations and laws of this Belize. Whether this makes sense in any particular situation would require a cost-benefit analysis. It may be easier to manage and maintain a company in Belize with perhaps less red tape. There may be less of a need to have insurance and the annual maintenance may be less expensive than in other jurisdictions.
The corporate tax rate for the IBCs that are doing business outside of Belize is zero, which can be a major advantage to incorporating in another country. As far as domestic companies, the corporate tax rate is based on the gross revenue of the corporation and the type of business that the company is engaged in. For example, there are different rates for electric companies versus professionals. I can give you an example. Professionals pay 6% on gross revenue on a monthly basis, while supermarkets or commercial business pays 1.75%. The income and business tax department has a pretty good website, that lists the different tax rates. The vast majority of businesses in Belize pay 1.75% per month on gross revenue and that vast majority would be restaurants, stores, commercial stores, bars, and things of that nature.
(Belize coat of arms, pictured.)
Posted November 14, 2015
Tony and Beth McClure
There is a lot of debate about the cooperation and disclosure between Belizean banks and US banks. I would caution people who think they can hide assets from the US in the Belizean bank, that’s probably no longer the case. The Belizean banks are under a lot of pressure to divulge expats’ account information back to the States to be compliant. I find that the tort laws in Belize seem to be a lot more conservative than they are in the...
There is a lot of debate about the cooperation and disclosure between Belizean banks and US banks. I would caution people who think they can hide assets from the US in the Belizean bank, that’s probably no longer the case. The Belizean banks are under a lot of pressure to divulge expats’ account information back to the States to be compliant. I find that the tort laws in Belize seem to be a lot more conservative than they are in the States. There's very little litigation or negligence and liability as far as protecting one’s assets. Obviously, you’ve always got some liability exposure with motor vehicles, but very few people maintain liability insurance on premises and operations for their dwellings and small businesses in Belize as we do here in the States, so your cost of insurance there is significantly lower.
And in Belize, property insurance is ala carte- you build your coverage based on the perils that you want to insure against. You can buy fire only, wind only, theft only, or if you want to build a package, you just piggyback all of those perils on top of each other. For the most part, everyone who I’ve spoken with who’s relocating to Belize simply overbuilds and self-insures as far as their exposure on the property side is concerned. For the liability side, outside of the automobiles, unless you’re taking some capital to Belize to start a small business, there’s just not much concern for it on the liability side.
I believe there are investments in land in Belize. It beats the hell out throwing darts at the stock market!
My wife and I enjoy travelling to the Florida Gulf- from Apalachicola all the way around down as far south as Indian Rocks Beach. As we visit these little communities, we like to go to the local museum. When we go to the museums in the gulf coastal area of Florida, specifically on the Gulf Coast more than the Atlantic coast, we see back in the 20’s and 30’s, hand crank ferries, little or no electricity, and little or no development. That’s what coastal Belize looks like right now; coastal Belize looks like the Florida Gulf in the 20’s and the 30’s. So as Belize continues to gain popularity and as it continues to develop, fortunes are going to be made in Coastal Belize just like fortunes have been made all along the Florida Gulf.
(Ferry crossing, Belize, pictured.)
Posted December 9, 2016