Trusts are commonly used to protect the interests of young or vulnerable children who may not be able to handle their own financial affairs. Trusts can also be used as an avenue to pass wealth through generations and help protect your assets from creditors or in the event of divorce proceedings.
In the past, trust has been commonly associated with the wealthy or super-wealthy as a form of asset protection and legacy planning. However, with increasing mass affluence, setting up a trust is getting more common among average households.
There are a few good offshore jurisdictions to consider for setting up a trust, below is a quick guide and comparison while considering setting up an offshore trust:
| Belize Trust | Nevis Trust | |
| Best use for | Family wealth management and asset protection. Also commonly used as special purpose vehicles for investment activities in America. | Family wealth management and asset protection |
| Statutory audit requirements | None | None |
| Corporate Tax Rate | 0% | 0% |
| Statutory audit requirements | None | None |
| Annual Tax Returns to be filed | None | None |
| Issued Capital Required | USD 1 | USD 1 |
| Director and shareholder requirements | Non-locals allowed. Minimum one director and one shareholder. Can be the same person/ entity. | Non-locals allowed. Minimum one director and one shareholder. Can be the same person/ entity. |
| Public register of shareholders and directors | No | No |
| Trust structure | Can be in a fixed agreement or a discretionary agreement. Or a hybrid (most common). | Can be in a fixed agreement or a discretionary agreement. Or a hybrid (most common). |
| Why form a Belize Trust | Other popular offshore trust jurisdictions such as Cook Islands or Nevis, have a one to six years window of opportunity that permits a creditor to bring a charge of fraudulent transfer against a trust. The framers of Belize trust legislation decided to adopt a completely different resolution to this matter. Belize trust legislation simply refuses to recognize any fraudulent transfer claims brought against a trust that has been properly set up within its jurisdiction. There is no window of opportunity and virtually no possibility that a fraudulent conveyance charge will ever be entertained against a Belize asset protection trust – period. The law has proven to be quite effective. | Nevis Trust Legislation protects the settlor and beneficiary from fraudulent claims by imposing significant barriers from attempting to gain access. Only the most wilful of creditors would be able to make a claim against it. If there is any legal claim against the Trust, a 100,000 USD bond must be played by the creditor before the claim is made, and will be risked in losing it if the Ministry feels it is a fishing attempt. |
Interested to know more about how setting up a trust? Talk to one of our Trust Specialist today.
