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Mutual Fund License

Mutual Fund License

Mutual Fund License  – The Industry 

Mutual Fund License | AidelcoAidelco operates at an arms-length basis with the top licensing professional in Belize. Belize has one of the best and most attractive mutual fund laws in the world.

The general benefits of establishing a mutual fund in an offshore financial centre like Belize is as follows:

Minimum or zero tax on capital gains, incomes, profits and dividends that are accrued to the fund.

This fact alone would outperform competitors based in high tax jurisdictions. The reason is simple! Funds which would otherwise be paid as tax, can in this case be reinvested in the assets held by the fund.

Mutual Fund License | Aidelco

While an offshore investment fund would typically operate in a tax-free environment and would thus be able to grow faster, the individual investor should nevertheless be aware that at the time when their investments are redeemed or when dividends are received from the offshore investment fund, such personal income may be subject to tax in their domicile (home) country, at the time of receipt. To this extent, professional tax counsel should be sought out by the investor in their domicile.

Minimum or zero tax on fees, commissions and profits earned by the fund managers, Advisors and Administrators, registered and regulated in an offshore financial centre.

Again, this may provide a competitive advantage to investment services professionals, for instance, by giving them the opportunity to charge less fees and commissions than competitors based in other high-tax jurisdictions.    

Greater Operational Flexibility

Mutual Fund License | AidelcoGreater operational flexibility is possible due to the fact that less formality is generally allowed in relation to the structuring of the fund itself. In the case of Belize, this is especially true due to less formal regulation allowed in Belize in comparison to mutual fund investment vehicles in other high-tax jurisdictions. Offshore investment funds have access to the widest variety of investment instruments and may also pursue more aggresive investment strategies compared to other mainstream onshore jurisdictions. Mutual Fund License

Regulations and costs

Mutual Fund License | AidelcoThe relatively lower level of regulation allow for a faster and easier establishment process of an offshore investment fund. Operational and administrative costs are also much lower. A series of offshore investment funds designed under the same patterns, and with the same managers and administrators, may be created very quickly, with minimal costs thanks to advanced and modern legislation. With this philosophy, an offshore investment fund can be offered to potential investors at more attractive terms. It is also common for an offshore investment fund to outsource some or all of its support functions to external providers, either in the same jurisdiction or abroad. Fund Administration, Management and investment advisory functions may be subcontracted to reputable service providers elsewhere. The recognition process of such providers during the process of establishement of an offshore investment fund is very straightforward. Again, such flexibility ensures a more efficient and profitable running of the fund.

Mutual Fund License | Aidelco

The advantages of Belize

 icon-arrow-circle-right Belize is a reputable, well regulated jurisdiction with a competent and efficient financial services advisory authority. The Belize Mutual Funds Act of 2000 is a modern and comprehensive piece of legislation.

 icon-arrow-circle-right Belize has outstanding political and social stability as well as a complete legal predictability and robust economy.

 icon-arrow-circle-right No exchange controls or restrictions on financial transfers apply to Belize-registered offshore mutual funds.

 icon-arrow-circle-right All Belize-registered offshore mutual funds and the investors thereof are in all respects exempt from the provisions under the Belize Income and Business Tax Act, Belize stamp duties act and the Belize Exchange Control Act. In short, Belize Mutual funds and their investors of such funds are not subject to any taxes in Belize.

 icon-arrow-circle-right Recognition under the Belize Mutual Funds Act can be obtained for funds already working in other jurisdictions, as well as for fund managers, administrators and other professionals operating from the other jurisdiction.

 icon-arrow-circle-right There are no paid-up capital requirements (share capital) for a Belize Mutual Fund and there are no restrictions for type, denomination, number, classes and designation of rights of shares that can be created. Multiple classes of shares may be issued to distinguish between different classes of assets, investors and even currencies. The authorised share capital would usually consist of common voting and non-voting shares. However, different and more complicated layouts are also possible. Shares can be denominated in any currency and even multiple currencies.

 icon-arrow-circle-right There are no statutory limitations with regard to investment policies, investment instruments and borrowing powers of Belize mutual fund, due to the fact that such conditions are only prescribed by internal documents (articles of association, prospectus, placement memorandum, offering circular etc) of the fund itself. These factors are determined by the promoters and managers of the fund.

 icon-arrow-circle-right In terms of the establishment and running of an offshore investment fund, Belize offers far superior cost-efficiency and value for money versus their competitors.

 icon-arrow-circle-right The regulation of the offshore-financial sector is regulated by the Belize International Financial Services Commission under a well designed and modern suite of laws, enabling adequate protection of investors interests. Both the formal letter of the law and the actual regulatory practices are designed to ensure that only knowledgable and fit persons are involved in mutual fund operations in Belize.  

 icon-arrow-circle-right The Belize Mutual Funds Act of 2000, which together with International Financial Services sub-regulations, is the primary legislation regulating mutual funds. They provide a modern and attractive legal basis for the establishment of offshore mutual funds in Belize.

Mutual Fund License | Aidelco

Belize Mutual Funds

The Belize Mutual Fund Act of 2000 sets forth the regulatory environment for mutual fund operations in Belize. There are also several additional regulations on the subject of mutual funds and also dealing with the finer points of the practical applications under the Mutual Funds Act.

The Mutual Funds Act primarily deals with three main areas:

 icon-angle-double-right Registration of Public Funds

 icon-angle-double-right Recognition of Private and Professional Funds

 icon-angle-double-right Licensing of Fund Managers and Administrators

The Belize Mutual Funds Act defines a mutual fund as company incorporated, partnership formed, a unit trust organised or other similar body formed or organised under the laws of Belize, or that of any other jurisdiction which:

 icon-angle-double-right Collects and pools funds for the purpose of collective investment; and

 icon-angle-double-right Issues shares (as herein defined) that entitle the holder to receive on demand or within a specified period after demand an amount computed by reference to the value of proportional interest in whole or in part of the net assets of the company, the partnership or the unit trust, as the case may be.

Mutual Fund License | Aidelco

There are three main funds, distinguished under the Belize Mutual Funds act.

 icon-angle-double-right Public Funds

 icon-angle-double-right Private Funds

 icon-angle-double-right Professional Funds

Public Funds

The Belize Mutual Funds act defines a public fund as one which offers any shares it issues or purchase to any member of the general public or any section thereof, and which is registered as a public fund under the Belize Mutual Fund Act.

Public Funds and their degree of regulation

Mutual Fund License | AidelcoPublic funds must be registered (or at least obtain consent to registration under a pre-filing procedure) before engaging in any in or from within Belize. A Public Fund must establish a prospectus inclusive of the information required by the act and must also produce and distribute audited annual financial statements. The registration application includes the details of Directors, Managers and Administrators and all other persons closely involved in the administration and management of the fund as there are very stringent requirements and criteria to be met by such persons involved.

The Mutual Funds Act requires that a prospectus for a public Mutual Fund shall provide full and accurate disclosure of such information, investors reasonably would require and expect for the intents and purposes of making informed investment decisions. The prospectus must also contain a summarised statement of investors’ rights and must also be accompanied by or at least contain reference to the availability of the Financial Statements for the last financial year and relative auditors statement.

Private and Professional Funds

Mutual Fund License | AidelcoThe Belize Mutual Funds Act defines a private fund as a fund that has less than 50 investors as well as the constitutional documents of which prohibit the offering of its shares to the general public.

At application, a proposed private fund will be required to demonstrate the ”private basis” of offering its shares to prospective investors, and to adequately explain which criteria will enable any particular investor to be qualified as ”private”. It remains at the discretion of the Registrar of Mutual Funds to accept or reject. Mutual Fund License 

The official definition of a professional fund is mutual funds which are offered only to professional investors and an initial investment, which is not less than $100.000 per investor or its equivalent translated from another currency. Consequently, the ”Private Investor” is considered as an individual whose:

 icon-angle-double-right Ordinary business involves the acquisition or disposal of property of the same kind as the property, or a substantial part of the property of the fund.

 icon-angle-double-right Net worth is considered to exceed one million US Dollars.

 icon-angle-double-right Has consented, in writing to be treated as a professional investor.

Simply put, a private investor is considered an investment professional (who is aware of the risks in investing), and who is considered as having a net worth of over one hundred thousand Dollars US (in the event of investment failure, this person should supposedly not be left bankrupt).

At recognition of a private or professional fund, most of the attention of the Registrar will be focused on the particulars of the the managers, administrators and other professional parties involved in the fund. The requirements thereof are considered fairly strict and detailed. Requirements overview is provided below.


Mutual Fund License | AidelcoAll managers or administrators of Mutual Funds who carry out activities from within Belize must be licensed by the Belize International Financial Services Commission. The Belize mutual Funds Act of 2000 prescribes several general conditions that have to be met by any such licensee. In particular, the IFSC must be satisfied that the applicant is a ”fit and proper person” to be engaged in the proposed fund management or business administration thereof. According to the terms of the IFSC, applicant is required to have ”adequate knowledge, expertise, resources and facilities necessary for the nature and scope of the business proposed.

The Act only states the licensing requirements in a rather general manner. However, the Policy Guidelines, issued by the International Financial Services Commission, contain a very detailed and exact explanation of the required conditions. These conditions are universally applied to any applicants who wish to be licensed as Fund Managers or Administrators in Belize.

If you’re interested in the possibility of your own fund, kindly click on the below button and select the ”Mutual Funds License” option and state as much information as possible on your planned monthly turnovers, revenue and requirements. A consultant will then get back to you with the best solution.  

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