Belize financial solutions

Cook Islands offshores 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.

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