¶ 1901
Overview
The vehicle. A Belize foundation is a legal person created by a founder and the members of a foundation council, who together execute a foundation charter by which the founder disposes of property to the foundation for a specified purpose. On registration with the Registrar the foundation acquires "a separate and independent legal personality in its own right" and may sue and be sued in its own name. International Foundations Act, Cap. 24:02, s. 3(1)–(2) (rev. ed. 2020) (Belize) (the "Foundations Act" or the "Act"). The property disposed of ceases "to be a part of the estate of the founder irrevocably" and becomes "the exclusive property of the foundation as its endowment." Id. s. 3(3). A foundation council administers the foundation "solely for the benefit of the beneficiaries of the foundation, or if no beneficiaries exist, solely for the purposes, charitable or otherwise, set forth in the foundation charter." Id. s. 3(6). Neither the council nor any of its members has personal ownership of or title to the endowment. Id. s. 3(7). The foundation thus combines the corporate form, in which the vehicle owns its own property, with the purpose and beneficiary structure of a trust.
The statute and its sources. The Act was enacted as Act No. 2 of 2010, and the revised edition shows the date April 12, 2010 at its head. Id. (heading); Fin. Servs. Comm'n, Sample Foundation Charter cl. 1(1) (2023) ("the International Foundations Act of Belize (No. 2 of 2010)"). It was amended in 2013 by Act No. 17 of 2013, whose changes are consolidated in the 2020 revised edition, and again in 2023 by the International Foundations (Amendment) Act 2023, No. 49 of 2023. Foundations Act (rev. ed. 2020) (title page); International Foundations (Amendment) Act 2023, No. 49 of 2023 (Belize) (the "2023 Act"). The Commission's briefing note on the original Act explains that it was "largely based on similar legislation in Antigua, the Bahamas and Anguilla, although consideration has also been given to corresponding legislation in Panama and Isle of Man." Int'l Fin. Servs. Comm'n, International Foundations Act, 2010: A Briefing Note ¶ 2 (Nov. 15, 2010) (the "Briefing Note"). The Act contains sixteen Parts in the original enactment as described in the Briefing Note, and fourteen Parts and one hundred and twenty-nine sections with five Schedules in the 2020 revised edition, to which the 2023 Act added sections 2A, 2B, 84A to 84D, 104A, 114A and 130. Briefing Note ¶ 4; Foundations Act, Arrangement of Sections; 2023 Act ss. 5, 10, 13, 18, 19. This book cites the Act by its sections as they stand in the 2020 revised edition, as amended by the 2023 Act.
Purpose of the Act. The Briefing Note states the object without qualification: the Act was "designed to promote the international financial services industry of Belize by offering a new product to international investors, primarily for asset protection purposes." Briefing Note ¶ 1. It describes the difference between the trust and the foundation in the terms used throughout this Part: a trust "is a relationship (not a legal entity)" between trustees and beneficiaries, whereas "a foundation is a legal entity in its own right and, unlike trustees (who are answerable to beneficiaries), foundation council members are answerable to the foundation." Id. The Act gives effect to that design. It declares the foundation irrevocable, separates the endowment from the founder's estate, denies the founder any power to direct the council or to control the endowment, and adds protective provisions that chapter 21 examines in full. Foundations Act ss. 3(3), 8(1), 35(4)–(5) (see infra ch. 21).
The 2023 amendments in brief. The 2023 Act was enacted "to further facilitate compliance with the Financial Action Task Force (FATF) Recommendation 24." 2023 Act, long title. It replaced the term "international foundation" with "foundation" throughout the Act, placed the Act's administration with the Financial Services Commission, empowered the Commission to impose administrative penalties of up to $100,000, required the Register to record the founder, council members, protector, beneficiaries and beneficial owners, restricted public inspection of the Register to the foundation's name, registered agent and date of registration, required accounting records and a beneficial ownership register to be kept at the registered agent's office and filed with the Belize Companies and Corporate Affairs Registry, and added a general offence. Id. ss. 3, 5–7, 9–10, 19. Paragraph 1990 examines each section. The protective provisions of the Act were not amended (see infra ch. 21).
What this chapter covers. This chapter examines the foundation as a form and the steps by which one is brought into existence. Paragraph 1910 places the Belize statute in the family of foundation laws from which it derives. Paragraph 1920 examines its enactment, policy and architecture. Paragraph 1930 examines the foundation's legal personality and the features that distinguish it from the trust and the company. Paragraph 1940 examines the residence rules that confine the Act to non-residents, and the effect on those rules of the 2023 change of terminology. Paragraph 1950 examines the purposes for which a foundation may be established and its duration. Paragraph 1960 examines the charter and by-laws. Paragraph 1970 examines registration, renewal, striking off and restoration. Paragraph 1980 examines the endowment and later contributions. Paragraph 1990 examines the 2023 amendments, records, fees and offences, and closes with a formation checklist and model charter clauses.
The rest of Part IV. Chapter 20 examines the founder, the foundation council, the protector and the beneficiaries, and the duties and liabilities of each. Chapter 21 examines the endowment as protected property: the non-recognition of foreign law, the anti-alienation rule, the treatment of the founder's bankruptcy, the provision on fraudulent dispositions and the limitation periods for claims against a foundation. Chapter 22 compares the foundation with the trust and the LLC and examines continuance into and out of Belize (see infra chs. 20–22). Chapter 1 introduced the Act, and this chapter builds on that introduction (see supra ¶¶ 110.05, 120.03, 190.05).