In October 2013, the Government of Belize enacted several legislative amendments to strengthen its offshore financial services industry and its domestic corporate base. The move will enhance the country’s status with international regulatory bodies and ensure that Belize maintains its position as a premier offshore jurisdiction in the Caribbean.
The enactment of the Accounting Records (Maintenance) Act 2013 (Act No. 18 of 2013) (“ARMA”) strengthens financial recordkeeping. Entities may keep their accounting records at their registered office, their registered agent’s premises in Belize or elsewhere within or outside Belize. If accounting records are kept outside Belize, the entity must notify its registered agent in writing of the physical address where they are kept. The ARMA also requires accounting records to be kept for at least five years. An entity that fails to comply with the legislation may be struck from the register.
“Belize Bank International Limited is fully prepared for the change,” says Filippo Alario, Executive Director. “We’re committed to assisting our clients to meet their obligations under the new legislation.”
The legislature also approved the International Financial Services Commission (Amendment) Act 2013 and the International Foundations (Amendment) Act (“IFAA”). The IFSCA gives the International Financial Services Commission (“IFSC”) the power to conduct on-site inspections of international financial service practitioners. Registered agents of foundations must keep a register of the members, protectors, beneficiairies, auditors (where applicable), and any persons having power of attorney granted by the foundation. Prior to the amendments, the registered agent was only required to keep a register when the foundation did not have a Secretary. However, with the enactment of the new subsection 84(2), both the registered agent and the Secretary must keep a register and notify the Registrar of any changes within 14 days.
Before the enactment of the IFAA, the International Foundations Act, 2010 stipulated that a person, who is not licensed or regulated under the International Financial Services Commission Act, could not serve as a member of more than one foundation. This provision limited the number of unlicensed persons who could act as members of foundations. Under the IFAA, a person who is not licensed or regulated by the IFSC may act as a member of more than one foundation. However, they may not act as the Belize resident member of more than one foundation.
“In our opinion, the restriction was affecting the marketability of Belize foundations,” says Ava Lovell-Belisle, Managing Director of Belize Corporate Services Limited, a leading corporate services provider and an associate company of Belize Bank International Limited. Lovell-Belisle comments, “we welcome the change to the legislation because now our foundation customers will have more flexibility in appointing members.”
The legislature also passed the Companies (Amendment) Act, 2013 (“CAA”) and the Trusts (Amendment) Act, 2013 (“TAA”).
The CAA did away with share warrants and introduced prohibitions against the issuance of bearer shares and share warrants to bearer. These changes are expected to have minimal impact on domestic companies since few have issued share warrants or bearer shares. Affected companies must comply within six months of the commencement of the CAA or they will be subject to de-registration.
The amendment transferred the supervision and regulation of domestic companies from the Registrar General to the newly created Registrar of Companies.
“Operational efficiency is extremely important to companies registered in Belize,” says Lovell-Belisle. “We believe the separation of these two functions will streamline many processes and make it easier for our corporate customers to do business in our country.”
The CAA made it illegal to falsely and deceitfully impersonate a shareholder or owner of interest in a company with a view to obtain a share or interest in the company, or to receive money due to an owner. Moreover, it introduced the concept of single shareholder companies by eliminating the requirement for domestic companies to have two or more shareholders.
The TAA created the Domestic Trust Register, and now domestic trusts must register with the Registrar of the Court. Domestic Trusts are defined in the TAA as express trusts made in writing under the law of Belize. International or offshore trusts are excluded. Only persons with written authorization from the settlor or trustee, and regulatory or enforcement authorities, may have access to the Domestic Trust Register. Settlors or trustees have to register existing domestic trusts within six months of the TAA effective date.
The offshore financial services industry is constantly evolving. Keeping pace with change and aligning with international standards enables Belize to attract banking customers and compete with other offshore centers.
The information contained in this document is for information purposes only and not for the purposes of providing legal advice. You must not rely on the information in this document as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.