Belize offshore mutual funds
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.
Public Mutual Funds are 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.
Private Mutual Funds are 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.
Professional Mutual Funds are 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.
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.
Mutual funds require reputable third party functionaries (administrators,
managers and custodians). 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.
If you need any additional info about offshore mutual funds please contact us.
