The Belize Asset Protection LLC
June 2012
With final implementation of the Belize LLC Act in 2011, the firm now offers Belize LLCs alongside the Cook Islands and Nevis structures already in place. The Belize statute introduces something the trust framework cannot match: a fraudulent-transfer window keyed to the date of the LLC's formation.
The Belize LLC Act is modeled on its predecessor legislation in the Cook Islands and Nevis. In one consequential distinction, it adds rules barring creditors from pursuing asset transfers to a Belize LLC. A creditor cannot pursue an alleged fraudulent transfer to a Belize LLC after the earlier of (i) one year from the date of the LLC’s formation and (ii) two years after the earliest cause of action arises.
Keying the limitations period to the date of LLC formation, rather than the date of the asset transfer, introduces a new dimension. Suppose a client establishes a Belize LLC in 2012 and transfers assets to the LLC in 2012, 2013, and 2014. Suppose further that the client incurs a liability and a court judgment is awarded against the client in 2012, but the creditor does not discover the transfers until 2014, at which point the creditor brings a claim in Belize. Which transfers can the creditor set aside? On the face of the statute, none. Each transfer (2013 and 2014) would be within the conventional one- or two-year window from the perspective of the transfer date — but the LLC itself is more than one year old, and the statute bars relief on that ground.
Whether other asset-protection jurisdictions follow Belize’s lead remains to be seen. In the meantime, the firm expects the Belize LLC to become an important tool for asset-protection counsel and their clients.