NEW LEGISLATION FOR BELIZE

As part of its plan to further develop the international financial services industry in Belize, which now ranks in the Top 10 jurisdictions in the world as regards company formation and ship registration, the Government of Belize has introduced various pieces of legislation (which came into force on 1 July 1999) that will help to ensure that Belize remains at the forefront of the international financial services industry and also to maintain its reputation as a jurisdiction of professional integrity. These include:

1. The International Financial Services Commission Act

To establish an International Financial Services Commission to promote, protect and enhance Belize as an offshore financial services centre and to regulate and supervise the provision of offshore financial services within Belize. The IFSC shall comprise of four members from the private sector, the Governor of the Central Bank (or his representative), the Financial Secretary (or his representative) and the Director and Deputy-Director of the IFSC (who shall be ex-officio members).

2. The International Insurance Act

To provide for the regulation of persons establishing and carrying on international insurance business from or within Belize - including captive insurance.

Minimum Paid-Up Capitalisation Requirements:

Long-Term Business - US$100,000
(including life, endowment, annuities, etc)

General Business - US$100,000
(including captive, marine, engineering, aviation,
transportation, motor, property liability, pecuniary
loss, creditor, guarantor, personal, etc)
Reinsurance Business - US$50,000

Captive Insurance - US$25,000

• Must have at least one director resident in Belize.
• Must appoint a registered insurance manager in Belize (who must be a fellow or associate of the Chartered Insurance Institute of London or a member of either the Society of Chartered Property and Casualty Underwriters, or the American Society of Chartered Life Underwriters).
• Must provide annual audited accounts to the Supervisor of International Insurance.
• Must maintain specified solvency margins.
• Full exemption from all taxes, stamp duty and exchange control regulations.
• Policies and documents may be issued in any foreign language (although an authentic English translation must be provided to the Supervisor of International Insurance).

3. The Mutual Funds Act

To provide for the regulation, authorisation and control of mutual funds and their managers and administrators carrying on business in or from within Belize. The proposed legislation provides for three categories of funds:

Public Funds
Offers any shares for subscription or purchase to any member of the general public or any section thereof and is not a private fund or professional fund.

1. Must be registered and file a prospectus with the Registrar of Mutual Funds.

2. Maintain adequate accounting records and prepare financial statements.

3. Annual financial statements must be audited by an approved auditor (in Belize or other recognised jurisdiction and must be made available to all investors.

4. Accounting records and audited financial statements must be available to the Registrar of Mutual Funds in Belize.

Private Funds
Less than 50 investors and the constitutional documents prohibit the offering of shares to the general public.

1. Must be recognised by the Registrar of Mutual Funds

Professional Funds
Offered only to professional investors and the initial investment in respect of each investor is not less than US$100,000 (or equivalent) and is designated as a professional fund by its regulations.

1. Must be recognised by the Registrar of Mutual Funds

Professional Investor
A person whose ordinary business involves the acquisition or disposal of property of the same kind as the property, or a substantial part of the property of the fund or who signed a declaration that he has net worth in excess of US$1 million (or equivalent) and that he consents to being treated as a professional investor.

Full exemption from all taxes, stamp duty and exchange control regulations.

Fees:

Public Fund (full registration)	Application	Fee
	US$500	US$500
Public Fund (initial consent)	US$100
Private / Professional Fund	US$350	US$350
Fund Manager or Administrator	US$250	US$500
Fund Manager and Administrator	US$250	US$1,000
Certificate of Compliance	US$25

4. The Protected Cell Companies Act

To provide for the incorporation of a protected cell company, or the conversion of an existing company into a protected cell company, whereby cells may be created for the purpose of segregating and protecting the assets of one cell from the assets of another cell.

• A protected cell company shall be treated as a single legal person.
• The name of such a company must include the words "Protected Cell Company", the abbreviation "PCC" or any cognate expression approved by the Registrar.
• Each protected cell shall have its own distinct name or designation.
• A protected cell company may only be incorporated as such if it is an authorised mutual fund or registered to conduct international insurance business.
• Full provisions for receivership and administrative orders.

5. The Limited Liability Partnerships Act

To provide for the establishment, registration, dissolution and winding up of limited liability partnerships.

• The name of such a partnership shall end with the words "Limited Liability Partnership" but the abbreviations "LLP" or "L.L.P." may be substituted in actual usage.
• No limit to the number of persons who may partners.
• Any person may be a partner - including individuals, corporations or another limited liability partnership.
• Must have a registered office in Belize.
• Must keep accounting records for 5 years.
• No requirement for filing or auditing of accounts.
• Partners may lend money to or borrow money from the partnership.
• Must file annual declaration listing current partners.

6. The International Business Companies (Amendment) Act

To provide for the establishment, registration, winding up and cancellation of Limited Life Companies.

• The name of such a company must end with the words "Limited Life Company" or the abbreviation "LLC".
• Maximum duration of 50 years from the date of registration or any aggregate thereof.
• An existing company may by resolution choose to be registered as a limited life company.
• Must pay an additional registration fee of US$100.

7. The Retired Persons (Incentives) Act

To encourage and promote the inflow of foreign capital into Belize by offering certain tax exemptions and incentives to Qualified Retired Persons. A Qualified Retired Person:

• must be at least 45 years of age
• must have a monthly pension or annuity payment of US$2,000 (or equivalent).
• must deposit (i) by the 15th of each month a minimum of US$2,000 (or equivalent), or (ii) by the 1st of April each year a minimum annual sum of US$24,000 (or equivalent), for his own use in a bank, building society, credit union or other licensed financial institution in Belize.
• may enter and remain in Belize from time to time.
• may on first entering Belize to import into Belize his personal effects and an approved motor vehicle, boat and light aircraft for his personal use free of all import duties and taxes.
• shall be exempt from all taxes and levies on all income or receipts which accrue to him from a source outside Belize or from a person resident outside Belize and in respect of work performed or investment made outside of Belize, whether such income is earned or passive income and whether or not such income is remitted to him in Belize.
• shall be deemed to be non-residents as regards the use of international financial services in Belize.
• must obtain a work permit to engage in gainful employment in Belize but may carry on business from within Belize if such business relates to activities carried on mainly outside Belize and is conducted exclusively with persons non-resident in Belize.