Unlike the Caribbean that has long been known for its “favorable tax jurisdiction” status, the same is not considered true for Central America. Insiders, however, know that such an approach to this region may result in lost opportunities for those having an interest in international business and finance. One of the ‘newer Kids on the Block’ and a reputable financial center for more than a decade, Belize, the former British Honduras, is a Central American country that is a member of the British Commonwealth and the Caribbean Community (CARICOM). This independent nation, whose favorable offshore legislation was created and implemented between 1990 and 2000, provides international investors with a high level of flexibility and security; and, has proven that it can stand on its own as a favorable tax jurisdiction based on its privacy laws and confidential business climate. International Business Companies (IBCs) have existed since the early 90’s; and, almost 30,000 IBC’s have been registered within Belize since then. IBC’s, used in conjunction with Common Law Asset Protection Trusts, give the savvy investor and high-net-worth individual the possibility of keeping their business affairs private and their personal information confidential. A Belize Trust and IBC can be structured so that the assets of the Trust are held by the IBC which in turn has its shares issued to and owned by the Trust. The beneficial ownership of such a Trust can then be structured in a way that is most beneficial to “the next generation’s” avoidance of inheritance taxes; and is therefore an excellent estate-planning tool. Within the international banking world, Foundations of Private Interest are also establishing themselves as investment and estate planning tools that are necessary to achieving a multi-jurisdictional structuring approach to legally create an independent business strategy for citizens of “high tax nations”. Practitioners and independent financial services firms within Belize have attracted the expertise of qualified foreign attorneys, paralegals, accountants and professional consultants. This is extremely important as investors to Belize need the assurance that their newly created business venture is not only operating legally and in accordance with the laws of the Belize jurisdiction, but also in accordance with the laws and regulations of those originating countries where their businesses are located in, or where their beneficial owners, beneficiaries and other related parties have their tax domicile residency. The time is long past when citizens of the world believed that by purchasing an offshore company and establishing a foreign bank account, their tax problems would be solved. The discriminate private individual and business investor has acknowledged that it is only through the use of an international investment structure (which may seem a bit complicated but in reality is just basically a sound common sense approach) where they will see results in legally minimized taxes and protection of their assets. A multi-jurisdictional structuring approach guided by an internationally experienced and licensed financial services provider might be a couple of dollars more expensive than buying a “piece of paper over the Internet”, but it saves you a lot of money in the longer run and even more so keeps you out of trouble bringing about a collective peace of mind. As more and more restrictions are being placed on other so called offshore centers, Belize is now perfectly positioned to provide real business solutions in a global environment through legal offshore investment structures in combination with private and reputable banking facilities, brokerage houses, investment advisors and financial institutions found not only in Belize but within a worldwide network. Additional services available in Belize include ship registration, offshore banks licensing and administration, mutual funds licensing and administration, international insurance licenses and representation, e-commerce solutions, wagering and gambling licenses, merchant account facilitation and data processing as well as structured international joint ventures and financing solutions via legal vehicles that are able to attract funds from international money markets giving the investor not only interesting returns but tax deferral and minimization opportunities. With the global economy an every day reality combined with a complex and volatile market within a society that becomes more litigious everyday, Belize provides a solution and a safe haven not only for small and medium-sized businesses but for every individual who is looking forward to safety and security for himself, his family and the next generation. International Business Company (IBC) - International Business Companies Act of 1990 Individuals and companies all around the world who are seeking to reduce unnecessary and unwarranted disclosure of their affairs are turning to a Belize IBC. This simple, yet powerful tool, functions as a valid investment vehicle through which all capital and income resulting from the international business activities of the IBC can be held, accumulated and transferred without any tax consequences within Belize. The introduction in the early 1990's of Belize’s International Business Company legislation, together with a range of other offshore enabling laws, led to the growth of interest in Belize as a low-tax jurisdiction. There are now approximately 30,000 companies registered at the International Business Companies Registry of Belize. An IBC is not required to file annual returns. The IBC’s corporate records may be kept anywhere in the world and there are no requirements for Annual General Meetings. Furthermore, the Board of Directors’ meetings may be held anywhere in the world and can be convened by telephone or other electronic means while resolutions can be passed through written forms of communication such as telexes, telegrams and cables. These are only some of the many beneficial advantages of conducting your business affairs through an IBC. A Belize IBC may engage in any activity that is not unlawful in Belize. However, it is prohibited from conducting business with residents of Belize; owning an interest in real property situated in Belize except for the leasing of office space; and is not allowed to carry on the business of providing registered agents/offices for other companies. A Belize IBC is not subject to income tax, social security tax, capital gain tax, withholding tax or stamp duty tax. There are no gift, death, estate, dividend, distribution, or inheritance taxes. There is a low minimum authorized capital and a business license is not required. The officers, directors, and members of the IBC are not identified for public disclosure and the registration process is simple and can be accomplished with little effort. Most IBC’s are incorporated to own and operate any lawful business that may include ship ownership, trading of securities, offshore banking, intellectual property licensing, investment holding, employees’ retirement plans (IRA’s, etc), employment and leasing contracts and financial management. However, there is no need to specify the objectives for which the company is being incorporated. Georgetown Trust, Ltd. is equipped to provide you with all the documentation and support services you may require to register a Belize IBC. We are licensed agents, in Belize, for the formation and management of international business companies. We also serve as the IBC’s nominee officers, registered agent and registered office and provide you with related services that may include mail handling for the IBC, bank account openings and accounting support. When you are ready to proceed with an IBC, please download and complete the application form. Ensure that all forms are completed in full, signed where requested and are accompanied by the necessary supporting documents. Send by fax to +501 223-2497. The first year fees from date of incorporation to 31st December include: Government registration fee, incorporation of the company, provision of Memorandum and Articles of Association, Certificate of Incorporation, company seal and preparation of minutes of first meetings of Director(s) and subscriber. Fee structure is as follows: IBCs with Authorized Capital of US$50,000 or less US$ 700.00 IBCs with Authorized Capital over US$50,000 US$ 1600.00 IBCs having shares of no par value US$ 950.00 Registered Office/Registered Agent Fee US$ 300.00 Corporate Directors (provided by Georgetown Trust, Ltd - optional) US$ 300.00 Second Year Fees (from 1st January following the year of incorporation and from 1st January in each succeeding year) IBCs with Authorized Capital of US$50,000 or less US$ 100.00 IBCs with Authorized Capital over US$50,000 US$ 1000.00 IBCs having shares of no par value US$ 350.00 Registered Office/Registered Agent Fee US$ 300.00 Corporate Directors (provided by Georgetown Trust, Ltd - optional) US$ 300.00 Order an IBC Go to top Trusts - The Trusts Act of 1992 Following the implementation of the Trusts Act of 1992, Belize has become the most sought after tax neutral jurisdiction for the establishment of its common law Trust. An asset protection Trust is considered an essential part of any investment planning structure. A Trust is a fiduciary relationship that is created between two or more parties with respect to the proper placement and distribution of real property, assets and funds. It is a basic arrangement whereby an entity manages property or assets for the benefit of another with the underlying principle being the clear separation of the legal ownership of the asset from the beneficial ownership and use of the asset. The person that creates the trust is known as the "Settlor" or "Grantor". The person who manages the Trust is known as the Trustee. The person or persons for whom the Trust is being created are known as the Beneficiaries. A Protector is a person appointed under the Trust Deed with whom the Trustees can consult when administering the Trust. In certain cases, the Trustees must seek consent from the Protector before carrying out certain transactions related to the Trust. The Protector can also be authorized to remove the Trustees and appoint new ones. The Trustee gives the Grantor an assurance that he will take responsibility for the management and distribution of property and assets in accordance with the Grantor's wishes which are duly recorded within a Trust Deed. The Trust Deed is a written agreement which lists the assets being placed into the trust and details the duties of the Trustee. It also names the beneficiaries and specifies the type of provisions being set in place for unforeseen events. These can include topics unpleasant to think of but are never-the-less important to cover. They can range from financial disasters to excessive death duties, spendthrift family members, marital breakdowns, family disagreements, business mismanagement, contingent creditors or even to political upheaval. An Asset Protection Trust is aptly named because it provides you with the opportunity to change your financial affairs to reflect your future needs. You also achieve substantial protection through the diversification and gifting of your assets into a Trust. There they become unavailable and completely out of the reach of illegitimate creditors, predators or persons in your resident domicile who may sue and win a judgment against you. You are also safe from judgments levied by US or worldwide courts who may want to freeze or encumber your assets while there is a pending lawsuit and before any judgment is rendered. Trusts can be established either by oral declaration or by written instrument. Although there are no mandatory requirements for the written registration of a trust created under Belize law, the advantages that registration brings would include acknowledgement by the trustees that they have been legally bound to the Trust. Registration secures the trust documents in the Supreme Court Registry of Belize, thus providing legal recognizance and acceptance of the Trust’ existence. The Register of Trusts is not open to inspection without the written consent of the trustee. A Belize Trust and an offshore company (a Belize IBC, Panama IBC or Nevis LLC, etc.) can be structured so that the assets of the Trust are held by the offshore company which in turn has its shares issued to and owned by the Trust. With this type of structuring, these two entities become most beneficial for estate planning and particularly useful for the avoidance of inheritance taxes, income and capital gains taxes, forced heirship provisions and probate procedures. This can result in very substantial tax and non-tax related advantages which accrues during the lifetime of the Grantor and ultimately provides continuity for the beneficiaries of the Trust as well as a double layer of privacy and long-term asset protection. Georgetown Trust, Ltd. is licensed to facilitate trust formations, management of offshore trusts and the provision of trustee services. For acting as the trustee of a settlement, we charge an annual fee of US$950 which covers all normal administration services carried out on behalf of the Trust. For the preparation of the Trust Deed and trust formation, there is a one-time fee of US$1,500. Georgetown Trust, Ltd. reserves the right to negotiate its fees for Trusts with assets in excess of US$1 million to suitably reflect the responsibility associated with the administration of the Trust. Georgetown Trust, Ltd. also offers several forms of Trust Documentation - The Standard Discretionary Trust and the Charitable Discretionary Trust. As well, Belize law further provides for the creation of Spendthrift Trusts or Protective Trusts. The Standard Discretionary Trust has a maximum life of 120 years. Charitable Discretionary trusts may be established with unlimited duration. For facilitating the transfer of trusts from another jurisdiction or for making appropriate amendments to standard trust deeds, our charges are reflected on an individualized basis. Order a Trust Go to top Foundations of Private Interest - Panama’s Private Foundation Legislation of 1995 Unlike Belize’s common law Trust which can conduct business, a Foundation of Private Interest that is domiciled in the Republic of Panamá is not allowed to transact or conduct daily business activities and is generally considered to be a nonprofit organization that is established by an international investor for the endowment and protection of his lawful personal and business assets. It is a strictly autonomous legal entity that is governed by the Private Foundation Law that was implemented in Panamá during 1995. A Private Family Foundation can be created by means of a notarized chartered document and is generally considered to be a legal entity once the Foundation’s charter has been recorded at the Public Registry Office in Panamá or is executed before a Panamanian Public Notary. The Foundation’s Charter must contain information on the explicit objectives or purposes of the Foundation, the present or future assets (referred to as its “patrimony”) being endowed to the Foundation, the duration of the Foundation and must identify the name of the Panamanian Resident Agent and three members to serve on the Foundation’s Council. The identity of the Foundation’s beneficiaries and its governing regulations is not required to be filed at the Public Registry and is not available for public consumption under any circumstances. Nominee councillors may be appointed to serve as Council Members to administer the Foundation. To maintain the confidentiality of the Founder’s identity, the Founder can be appointed as a member of the Foundation Council, as a Beneficiary or as a Protector (i.e. an official whose name is not identified at the Public Registry). The Protector is allowed to submit a notarized private “Protectorate Document” whereby the Protector appoints the Beneficiaries through a Private Letter of Wishes. Separate regulations are submitted confidentially which identifies the Foundation’s governing principles of operation which may include regulations that reserve the right of the Founder to remove or add new Council Members and that regulates Council Members to exercise their powers only after obtaining the previous authorization of the Protector or any other supervisory body (auditors, accountants, etc.) that is appointed by the Founder or by a majority of the Founders. The initial patrimony of a Private Foundation is US$10,000. This amount, however, does not have to be deposited in advance at a bank in Panamá at the initiation of the Foundation’s charter. All world-wide income arising from the assets held by the Foundation are exempted from all taxes within Panamá. For all legal purposes, the assets of the Foundation constitute an estate separate from the Founder’s assets and as such cannot be seized, sequestered or subjected to any personal lawsuits brought under any circumstances against the Founder or his beneficiaries. Since the Foundation is considered a nonprofit entity, it may give educational grants or charitable donations to any designated parties or vice versa receive the same. A carefully designed dual corporate strategy utilizing a Private Interest Foundation that will hold, as part of its patrimony, the bearer shares of a Belize IBC that, in turn, will exclusively conduct the day-to-day business of the Foundation will assist you greatly with your domestic investment and estate planning. This strategy can result in very substantial tax and non-tax related advantages that become effective at the time of the Foundation’s constitution or after the death of the Founder. These advantages include investment diversification, minimal tax reporting requirements, the avoidance of Controlled Foreign Corporation reporting provisions (in the US, Canada, United Kingdom, Italy, Australia, New Zealand) and the probate procedure, a substantial decrease in property tax, income tax and capital gains tax, asset protection for the beneficiaries of the Foundation and exemption from estate succession, gift and inheritance taxes. Georgetown Trust Ltd. has established itself as a trusted global advisor with the proper knowledge and integrity that is necessary for your asset protection and estate planning. As Panamá’s Private Interest Foundation is modeled accordingly on the Foundation legislation of Liechtenstein and Austria, it comes to you solidly recommended as a valuable lifetime fiduciary guarantee that your assets will rightfully go to your heirs and not to your creditors or the government. When you are ready to proceed with a Private Foundation, please download and complete the application form. Ensure that all forms are completed in full, signed where requested and are accompanied by the necessary supporting documents. Send by fax to +501 223-2497. The fee structure for a Private Interest Foundation for the first year fees from the initiation date of notarized charter to 31st December include: Government registration fee, provision of original Foundation Charter in Spanish, official English Translation of Foundation Charter, registered agent and office US$2,000.00 Expenses US$ 75.00 Nominee councillors optional (with pre-signed, undated nominee council resignation letters (notarized): a. Inactive US$ 600.00 b. Active (based on book value of the assets) 0.6% p.a. Second Year Fees (from 1st January following the year of the Foundation’s initiation and from 1st January in each succeeding year) Registered Agent/Office US$850.00 Government Fee US$250.00 Nominee councillors(optional): a. Inactive US$600.00 b. Active (based on book value of the assets) 0.6% p.a. Order a Foundation Go to top Offshore banking licenses - Offshore Banking Act of 1996 As Belize’s benchmark reputation for integrity has grown and its underlying infrastructure of innovative, integrated network of professionals and legal system have expanded in tandem with each stage of its growth, the offshore banking legislation became effective with the enactment of the Banks and Financial Institutions Act of 1995 and the introduction of the Offshore Banking Act of 1996. In an additional move designed to attract international banks to relocate to Belize, the Money Laundering Prevention (Act) of 1996 led to the introduction of a “know-your-client” rule and made it known to the worldwide financial community that Belize was taking a stand against international money laundering. The government’s consistent refusal to enter into treaties that would lead to information exchange on banking and fiscal matters has further enhanced Belize’s commitment to its status as a reputable offshore banking center with the necessary laws and infrastructure that are designed to ensure privacy and protect one’s assets. An applicant for an offshore banking license can be either an International Business Company (IBC) from Belize or a local company (250 onshore company) registered in Belize. The offshore banking license application process begins with an initial introductory meeting with the Central Bank of Belize that is followed by a second pre-filing meeting that enables the application to be reviewed by the Central Bank and the Belize government. To facilitate the application process, a local representative agent along with the bank’s principal officers are required to attend the initial introductory meeting with the Central Bank of Belize. It is mandatory that the bank principals (officers and directors) be qualified and experienced in international banking business and be of suitable character and financial status. The application should be as complete as possible and submitted with substantial documentary support for the application. The entire application process can take anywhere from six months to one year to be completed. After the approval for bank licensing is granted, the license remains valid for an unlimited period of time and enables the establishment of an office in Belize to commence operations in foreign currencies, securities and assets exclusively for any person not resident in Belize. The prerequisite for anyone wanting to establish a private offshore bank in the Belize jurisdiction would have to be its state-of-the-art communication facilities that include access to international air travel in a convenient gateway between the Americas, an efficient mail service, a reliable telecommunication systems that is supported by excellent bandwidths, a suitable time zone and an English speaking population; all factors which contribute to the feasible conducting of international banking from within Belize. Offshore banks fulfill many inter-group treasury and management functions and are often effective as part of the overall banking mechanism for international restructuring and corporate financing. The utilization of Belize as a low tax base and as a conduit for funds to pass through an offshore bank can result in the achievement of two-fold benefits i.e. (i) meeting the need for capital expenditure in a high tax jurisdiction in a form which does not give rise to tax as the funds cross frontiers and (ii) to enable the further extraction of subsequent profits in the form of dividends and interest. There are also exchange control benefits to be achieved and registered offshore banks in Belize are exempt from all forms of taxation or stamp duty on its Bills of Exchange, promissory notes, financial instruments or upon any profits or gains, interest or dividends that are earned during its ongoing banking business. Essentially, two types of offshore banking licenses are available in Belize. An “A’ class banking license allows you to transact offshore banking business without any type of restrictions. The minimum capital requirement for a Class “A” bank is US$3,000,000. The annual licensing fee for a Class “A” License is US$20,000. Class “B” banking licenses are allowed to establish, maintain and operate a business office in Belize with certain restrictions that include being prohibited from issuing a check book to any depositor nor is it allowed to provide any current deposit or checking facilities for the transaction of offshore banking business. The minimum capital requirement for a Class “B” bank is US$500,000. The annual licensing fee for a Class “B” License is US$15,000. Georgetown Trust, Ltd. has served as the representative processing agent for several offshore banking licenses in Belize and is well placed to take you through all the stages necessary to ensure that your application for either a Class A or Class B offshore bank is successful. Our representative services start with the consultation and vetting process and continues through to the completion of your bank’s local office set-up and the establishment of operations that include the facilitation of local management and administrative staffing and the necessary back-office support services. When you are ready to precede with an offshore banking license registration, please download and complete the application form. Ensure that all forms are completed in full, signed where requested and are accompanied by the necessary supporting documents. Send by fax to +501 223-2497. The Georgetown Trust, Ltd. fee structure for acting as a local representative agent in Belize is as follows: Consultation Fee (application and vetting process) US$12,500.00 Agent Fee US$17,000.00 Government/Registration Fees: Unrestricted “A: Class offshore bank license US$20,000.00 Restricted “B” Class offshore bank license US$15,000.00 Courier Fees US$ 50.00 (within USA) Courier Fees US$ 75.00 (outside USA) All other incidental fees not recognized above will be agreed upon by mutual assent between Georgetown Trust, Ltd. and the parties being served. Order an OffshoreBank Go to top Mutual funds licensing and administration – The Mutual Fund Act of 1999 As the only financial centre in Central America where English is the official language to conduct business, Belize has endeavored to further strengthen its economic legislation with the introduction of the Mutual Fund Act of 1999. As a result, Belize is now ranked among the top ten offshore financial jurisdictions in the world; and, an invitation has been extended to qualified investors to participate in the three types of offshore mutual funds that encompass the mutual fund industry of Belize i.e. public, private and professional funds. The conditions under which these funds are registered, administrated and managed from within Belize (or elsewhere) are expressly anchored in the Mutual Fund Act and provides for the basic protection of mutual fund investors. The Act does not impose specific requirements with regard to the location of the manager, investment advisor, administrator or the custodian of a public, private or professional fund. As is defined under the Mutual Fund Act, the expression “carrying on business from within Belize” includes carrying on business outside of Belize from a place of business or from a registered office within Belize. For the purpose of “carrying on business as a mutual fund”, a manager or administrator, shall, if carrying on business anywhere outside of Belize, be deemed to be carrying on business from within Belize. A Public Mutual Fund is allowed to conduct business only after its official prospectus has been inspected by the Registrar of Mutual Funds for official recognition and registration. A public fund is further required by law to maintain a custodian for the day-to-day activities involved in the safekeeping of the fund property that is separate and apart from the activities of the Fund Manager and Administrator. The custodian’s role is to ensure that investors’ interests are protected by checking that the Manager’s actions are in line with the fund regulations and with the particulars of the investment scheme. A licensed trustee is often the custodian for the fund’s underlying property. A public fund has to to prepare financial statements and maintain adequate accounting records that are reviewed annually by a recognized auditor from Belize (or elsewhere). The approved financial statements and accounting records for a registered public fund should be kept at its principal place of business in Belize and be made available to all investment shareholders and to the Registrar of Mutual Funds. The Public Mutual fund is widely considered to be one of the most important forms of investment available in a capital market and public offerings made for the purchase of its multiple share class subscriptions provide mutual fund investors with the potential for long-term capital appreciation and growth. A Private Mutual Fund is prohibited from the offering up of its common stock for subscription by the general public. Consequently, this type of fund is limited only to private stock offerings after it has first applied for and received official recognition from the Registrar of Mutual Funds. Thereafter, it can commence its operations with a closed-end group of investors (less than fifty). Certain private funds are designed primarily to provide capital growth while others are intended to preserve capital. The Professional Mutual Fund is solely able to offer up its shares for subscription or purchase only to investment professionals. A professional investor is specified as being one whose ordinary business involves the acquisition/disposal of shares in an investment fund or who has a declared net worth of one million United States dollars. The initial investment in respect of each investor in a professional fund is a minimum of one hundred thousand United States dollars (US$100,000) or its equivalent in any currency as is designated by the mutual fund regulations. The professional fund must first receive official recognition from the Registrar of Mutual Funds before it can commence its business operations from Belize. Mutual funds require reputable third party functionaries (administrators, managers and custodians). Georgetown Trust, Ltd., as a licensed administrator in Belize for mutual funds, can assist you with the fund’s formation and is able to hold the underlying fund property, receive subscriptions and pay out dividends. Georgetown Trust, Ltd. also offers discretionary investment management services and works with some of the best brokerage and offshore hedge fund managers spanning the globe thereby providing our clients with an individualized and structured portfolio of offshore funds that may include specialized funds. An international business company (IBC), partnership (LLP) or a Unit Trust can be the applicant for a Mutual Fund license. Funds that are recognized and registered under the Mutual Fund Act of Belize are exempted from Exchange Control regulations and from all income tax, business tax and stamp duty. This is therefore a unique and diverse investment opportunity that yields tax free dividends and capital gains for mutual fund investors. When you are ready to precede with an offshore mutual fund license registration, please download and complete the application form. Ensure that all forms are completed in full, signed where requested and are accompanied by the necessary supporting documents. Send by fax to +501 223-2497. The Georgetown Trust, Ltd. fee structure for a mutual fund administration and management in Belize is as follows: Act as Application Processing Agent US$3,500.00 Registered Office US$ 750.00 Registered Agent US$ 750.00 Administrator of Funds 1% of total funds Continuation from a Foreign jurisdiction US$500.00 Government/Registration Fees: Application Fee for the Registration of a Public Fund US$500.00 License Fee for a Registered Public Fund US$500.00 Application Fee for the Recognition of a Private or Professional Fund US$350.00 License Fee for a Recognized Private or Professional Fund US$350.00 Courier Fees US$50.00 (within USA) Courier Fees US$75.00 (within USA) All other incidental fees not recognized above will be agreed upon by mutual assent between Georgetown Trust, Ltd. and the parties being served. Order a Mutual Fund Go to top International Insurance License - International Insurance Act of 1999 According to Belize’s International Insurance Act of 1999, the categories of business included under the International Insurance Act are long-term insurance business, general insurance business, reinsurance business or captive insurance business. The Act further classifies international insurance as “the business of a company whose risks and premiums originate outside Belize and whose liquidation monies payable to shareholders are payable to or for the benefit of persons resident outside of Belize.” As the government of Belize continues to demonstrate its commitment to advancing the development of its offshore insurance industry, the passage of the International Insurance Act of 1999 has facilitated international investors who are seeking a reputable tax neutral jurisdiction to establish self insurance ventures that will provide insurance for risks which may not otherwise be normally insurable. Furthermore, the International Insurance Act is there to facilitate those investors who are seeking to ultimately lower their insurance premium costs through self-insurance ventures that will allow them to establish a realistic spread between risks and control. This knowledge will assist investors to further leverage their company’s key risks against company performance and financial results. Self insurance is the concept of insuring risks internally rather than through the commercial market. In making the decision for the viability of self-insurance, an analysis of the company’s insurable risks as between normal or expected losses and catastrophic losses must be made. The decision is often made to self insure the normal or expected losses and to cover the potential catastrophic losses in the commercial insurance market by means of reinsurance. Self insurance can be effected in several ways. For example, funds can be appropriated from a company’s annual net profits to create capital reserve provisions against losses which are not covered by commercial insurance underwriters. The most common and perhaps the most effective method of self insurance, however, is through the establishment of a captive insurance company. In commercial terms, a captive insurance company can be defined as a subsidiary company which is wholly owned by a non-insurance company and which carries on business exclusively to underwrite the insurable risks of its parent company or of its related or associated companies. Usually, a captive insurance company is located in an offshore jurisdiction for potential tax savings. The captive insurance company may take various forms:- The “pure” captive i.e. a company wholly owned by its parent and insuring the risks of that specific corporate group The “mutual” captive, i.e. a company set up to insure the collective risks of members of mutual organizations such as trade or industry associations The “reciprocal” captive, i.e. an association of separate entities who undertakes self insurance on a collective basis under a general management structure The “pure” captive turned commercial underwriter or reinsurer i.e. a pure captive which enters into the competitive commercial insurance market by seeking business from external sources in addition to the insurance risks underwritten from within the group. The desire to reduce the costs of insurance is one of the principal reasons for considering the use of self insurance. Corporate groups with large insurable risks i.e. pharmaceuticals, power industry firms and even the financial services industry have been among the hardest hit in recent years by soaring insurance excess that is a significant proportion of the group’s overhead. This has been largely due to increased premium costs which have arisen from inflationary factors affecting the value of insurable risks, the administrative costs of insurers and the level of “real” investment income derived by the underwriters. The increased costs to the insurer of administering and marketing insurance policies also lead to inflexibility in policy terms and conditions. Furthermore, most insurance policies are standardized products that are seldom drawn to suit the particular needs of the insured. Similarly, the fundamental rating system used to assess premium levels is standardized on the record of losses experienced on an industry or group classification basis. Again the insured, who has a better than average claim record, is penalized through its contribution to industry wide losses. Further, a corporate group may find that with the growth of its operations, a large number of individual risks are being insured unnecessarily i.e. the possibility of a significant percentage of such risks materializing in any one year would be remote. The rationalization of insurance cover to meet the specific requirements of a corporate group would therefore result in an immediate reduction of insurance costs. At present, the commercial underwriters are only able to offer these reductions to the insured through the medium of deductibles. The alternative of a captive insurance company coupled with a reinsurance program will provide greater cost reductions than the adequate premium credits attaching to deductibles under conventional insurance. The more specific cost advantages provided by reinsurance take the form of premium credits and commissions. These credits and commissions are of course immediate reductions in premium cost to the corporate group but are retained in the captive insurance company. The use of reinsurance in conjunction with a captive can also provide cash flow benefits to the corporate group. The corporate group, through its captive insurance company, retains the gross premium until the reinsurance premium falls due and is able to generate investment income during the retention period. The ability of the captive insurance company to determine when the annual premiums should be paid by group members can also assist the group cash flow program, provided such payments meet the reinsurance premium requirements. Cash flow benefits can also be derived from the taxation advantages which accrue from using a captive insurance company. The funds accumulated in the captive insurance company are retained under the control of the corporate group. A flexible policy of investment is therefore possible and prudent investment of such funds should further enhance group profitability. The offshore-based captive provides greater benefits and flexibility for investment of accumulated funds. The use of a captive insurance company also expedites the settlement of insurance claims. However, the settlement of a loss claim between the captive and the group member must be affected in the proper commercial manner. The captive insurance company therefore offers the most expedient and beneficial means of obtaining self insurance backed by reinsurance coverage. It follows that a captive insurance company should be used to complement the activities of the commercial insurance underwriters and not as an alternative to them. The self insurance of risks which are outside the scope of commercial insurers must also be considered in conjunction with an assessment of your group’s overall risk position. The coverage for this form of self insurance will be funded entirely from within your group. Consequently, structural and taxation problems are factors of prime importance and inevitably result in the utilization of a captive insurance company to insure the designated risk. The payment of premiums for insurance coverage is, in most countries, tax deductible irrespective of the nature of the recipient entity. However, self-insurance effected through the creation of internally funded provisions of reserves does not normally generate tax deductions until losses are substantiated. The use of a captive insurance company is therefore a means of crystallizing self insurance into a distinct corporate entity. Georgetown Trust, Ltd. has extensive experience in the establishment of all types of offshore insurance arrangements and can provide you with consultation on the formation and management of insurance companies as well as arrange for access to professional risk managers and consultants to handle the day-to-day administration. We also provide international investment management. When you are ready to precede with an international insurance company registration, please download and complete the application form. Ensure that all forms are completed in full, signed where requested and are accompanied by the necessary supporting documents. Send by fax to +501 223-2497. The Georgetown Trust, Ltd. fee structure for the establishment of an insurance company in Belize is as follows: Processing of any insurance application US$6,500.00 Act as Principal Insurance Representative Variable » 0.15% of all insurance amounts underwritten, the minimum fee amount is US$10,000» Registered Office US$2,000.00 Opening of US and Belize Bank Account US$ 250.00 Nominee Director US$ 250.00 Service of Process by resident attorney-at-law US$ 400.00 Keeping of business records and accounts US$ 300.00 Actuary or Auditor Independent Agent Transfer of Insurance Business US$ 300.00 Compliance with regulations US$ 400.00 Mail Forwarding US$ 100.00 Courier Fees US$ 50.00 (within USA) Courier Fees US$ 75.00 (within USA) Government/Registration Fees: Application for long-term Insurer US$ 500.00 License for long-term Insurer US$ 2,000.00 Application for general Insurer US$ 500.00 License for general Insurer US$2,000.00 Application for exempt Reinsurer or captive Insurer US$ 250.00 License exempt Reinsurer or Captive Insurer US$ 250.00 Application for other Reinsurers US$ 500.00 License for other Reinsurers US$1,000.00 Application for captive Insurers US$ 500.00 License for captive Insurers US$1,500.00   Order an Insurance License Go to top Ship, Yacht and Ship Mortgage Registration - Registration of Merchant Ships Act, 1989 Belize is an active member of the International Maritime Organization and remains an attractive and steadfast choice for offshore ship registration. The International Merchant Marine Registry of Belize (IMMARBE) handles all formalities in connection with maritime certification for vessels registered in Belize and actively promotes the registration of merchant ships, fishing vessels, pleasure yachts and non-commercial crafts. There are approximately 1,600 vessels currently registered under the Belize Flag. IMMARBE is open to any type, class or size of vessel used for international navigation that has passed the necessary safety inspections and is engaged in legal maritime activities within the world-wide shipping industry. The main advantages that can be had under the Belize Flag are the cost effective registration fees, annual fees and incentives for deductions when registering two or more vessels, a well established legal system and mortgage recording service, political stability and an efficient and user-friendly registration procedure. The Belize ship registry permits offshore companies to be registered as ship owners and to have their vessels registered under the Belize Flag. An International Business Company (IBC) can be incorporated in Belize to own merchant ships and pleasure crafts. “IBC-owned” ships that fly the Belize flag enjoy all the privileges of international conventions signed onto by Belize; and, as well, accrue the financial benefits realized from tax exemptions on the income derived from its chartering and other worldwide income generating activities. All vessels registered in Belize require an approved resident shipping agent. Georgetown Trust, Ltd. is authorized to render resident shipping agent services in Belize to facilitate ship-owners with the processing of relevant documents for ship mortgages and the provisional, permanent or special registration of their shipping vessels under the Belize Flag and to provide other ancillary services related to ship registration. Dual registrations in the form of charter party contracts and bareboat charter registrations are facilitated under the governing terms of the original country’s ship registry. There are no requirements under Belize law for the ship’s owner, whether an individual or legal entity, to be Belizean. Provisional and permanent registration are available for titles, mortgages, encumbrances and other deeds relating to vessels applying for governance under the Belize Flag. Provisional registration is valid for six months during which time the necessary paperwork may be effected, if necessary, to obtain permanent registration. Permanent registration is valid for five years and is renewable if the vessel remains in good standing. The Belize shipping law regulates ship safety standards, ship mortgages and securities to qualify and meet the standards of international insurers and lenders. Vessels registered in Belize are expected to have the following certificates on board at all times: International Loadline, Ship Safety Equipment, Ship Safety Radiotelephony, Ship Safety Radiotelegraphy, Ship Safety Construction, International Oil Pollution Prevention Plan, International Tonnage, Passenger Ship Safety, Annual General Inspection and Shipboard Oil Pollution Emergency Plan. The Georgetown Trust, Ltd. fee structure for acting as resident shipping agents in Belize are as follows: Provisional/Permanent Registration of vessel US$ 350.00 Mortgage Registration US$1,000.00 Transfer of Title US$ 350.00 Registration of Ownership Title US$ 350.00 Courier Fees US$ 50.00 (within USA) Courier Fees US$ 75.00 (outside USA) G.T. - Gross Tonnage Registration Fees Annual Service Tax Annual Inspection Tax Vessels of up to 500 G.T. US$ 200.00 US$ 200.00 US$ 500.00 Vessels of up to 501-1,000 G.T. US$ 300.00 US$ 300.00 US$ 500.00 Vessels of 1001-2,000 G.T. US$ 500.00 US$ 500.00 US$ 1000.00 Vessels of 2,001 - 5,000 G.T. US$1,000.00 US$1,000.00 US$1,000.00 Vessels of 5,001 - 10,000 G.T. US$1,500.00 US$1,500.00 US$1,500.00 (if more than 8,000) G.T. Vessels of more than 10,000 G.T. US$3,000.00 US$3,000.00 US$1,500.00 Other applicable fees are: Annual Tax US$0.10 per net ton or a minimum charge of US$50 Documentary Fees & Other Taxes: New licenses due to transfer of ownership US $1,000 New licenses for amendment in vessel’s structure or particulars, other than simple corrections US $500 Deregistration US $750.00 Issuance of duplicate navigation licenses due to loss or destruction of the original(s) US $300.00 Dual registration fee US $500.00 Extension of navigation licenses US $300.00 Reservation of vessel’s name (per month) US $20.00 Provisional Patent/Radio license US $150.00 Permanent Patent/Radio license US $250.00 Min. safe Manning Certificate US $250.00 Shipping Agent (Annual) US $150.00   Incentive for registration of several vessels by the same owner: An incentive rate reduction of up to 75% of the registration fee and/or first year’s annual service tax may be approved by the Registrar on the recommendation of the Belize Ship Registry.   Fees for the registration of titles, mortgages, assignments of mortgages, discharge of mortgages and supplements of addenda thereto: Preliminary registration of each document (in addition to all necessary expenses) US$300.00   Permanent registration of each document:   (i) Ownership documents US$300.00 (ii) Ship Mortgages US$475.00 (iii) Mortgage supplements, addenda or assignments US$300.00 (iv) Discharge deeds US$200.00 Registration of Sporting, Recreational and Non-commercial Vessels:   (i) Registration fee (including first year’s annual tax) US$750.00 (ii) Annual tax (for second and subsequent years) US$500.00     When you are ready to proceed with a Belize ship registration, please download and complete the application form and send by fax to +501 223-2497. Order a Ship Registration     Go to top   Georgetown Trust, Ltd. Post Office Box 667 Marina Towers, Suite 402 Newtown Barracks Belize City, Belize Central America Telephone: +501-223-3569 Facsimile: +501-223-2497 E-mail: info@georgetowntrust.com   Proud member of Belize's Leading Business Association   Georgetown Trust Charting your coarse to financial freedom and security.   © Georgetown Trust Ltd. All Rights Reserved Disclaimer