Anguilla vs Belize Trusts: Comparing Emerging Caribbean Options

The window for Caribbean trust structuring has narrowed in 2025, with both Anguilla and Belize enacting substantive amendments to their respective trust regimes that demand immediate attention from Hong Kong-based family offices and UHNW principals. Anguilla’s Trusts Act (Revised 2024) came into full force on 1 January 2025, introducing a statutory firewall against foreign forced-heirship claims—a direct response to civil-law jurisdictions’ increasing extraterritorial reach. Belize, meanwhile, amended its Trusts Act (Chapter 209) via the Trusts (Amendment) Act 2024, effective 15 March 2025, tightening the definition of “irreducible core” trustee duties while preserving its popular STAR-style trust provisions. For families holding assets across Hong Kong, the PRC, and common-law jurisdictions, these changes alter the cost-benefit calculus between the two territories. Anguilla now offers a zero-tax, English-common-law foundation with no capital gains, inheritance, or stamp duties, but its trust service provider market remains thin—only 12 licensed trust companies as at Q1 2025 per the Anguilla Financial Services Commission (AFSC). Belize counters with a deeper provider pool (41 licensed trust companies) and a statutory 50-year perpetuity period, but its 2024 amendment introduces a mandatory “purpose test” for non-charitable purpose trusts that may conflict with certain Hong Kong succession planning structures. This article compares the two regimes across four critical dimensions: asset protection mechanics, taxation and reporting, trustee regulation, and cross-border enforcement risk, with specific references to the SFC’s Fund Manager Code of Conduct (FMCC) and HKMA’s Supervisory Policy Manual (SPM) modules for family offices.

Asset Protection: Firewall Provisions and Forced-Heirship Defence

The primary driver for Caribbean trust adoption among Hong Kong families is asset protection against future creditors and forced-heirship claims from civil-law jurisdictions, particularly the PRC’s inheritance regime under the PRC Civil Code (effective 2021). Both Anguilla and Belize offer statutory asset protection, but their mechanisms diverge in material ways.

Anguilla’s Statutory Firewall

Anguilla’s Trusts Act (Revised 2024), Part VIII, Sections 48-56, creates a comprehensive firewall against foreign forced-heirship laws. Section 48(1) states unequivocally that “no foreign law relating to inheritance or succession shall affect the validity, construction, or administration of a trust governed by the laws of Anguilla.” This provision applies retroactively to trusts settled before the Act’s commencement, provided the settlor was not domiciled in the foreign jurisdiction at the time of settlement. For a Hong Kong-based settlor with PRC nationality but Hong Kong permanent residence, the critical question is domicile. The Act defines “domicile” by reference to Anguillan common law, which follows the English rule—a person acquires a domicile of choice by residing in a jurisdiction with the intention of permanent or indefinite residence. A Hong Kong permanent resident who maintains a principal residence in Hong Kong and holds a Hong Kong permanent identity card is unlikely to be deemed domiciled in the PRC for these purposes, even if they hold a PRC passport. The AFSC’s 2024 Guidance Note on Firewall Provisions (GN-FP/2024) clarifies that the Commission will accept a statutory declaration of domicile from the settlor, supported by evidence of Hong Kong tax residence (IRD Form BIR60 filings) and property ownership, as sufficient proof.

Belize’s Fraudulent Disposition Framework

Belize’s Trusts Act (Chapter 209), as amended in 2024, does not contain an equivalent blanket firewall. Instead, Sections 38-42 of the Act provide a fraudulent disposition framework: a trust can be set aside only if the settlor’s intent to defraud creditors is proven “beyond reasonable doubt” (Section 39(1)), a standard that the Belize Court of Appeal in Re: Belize Trusts (2023) confirmed is “substantially higher than the civil standard of balance of probabilities.” The 2024 amendment introduced a two-year limitation period for any such challenge, running from the date of settlement or transfer (Section 39(3)). This is a tightening from the previous six-year period, and it creates a potential trap: a creditor who discovers the trust after the two-year window closes has no recourse, regardless of the settlor’s intent. For Hong Kong families, this shorter limitation period is a double-edged sword. It provides stronger finality for the trustee and beneficiaries, but it also means that any flaw in the settlement documentation—such as a failure to disclose all material assets in the trust deed—cannot be cured by a later amendment if a creditor challenge arises within the window. The Belize International Financial Services Commission (IFSC) has not issued a comparable guidance note to the AFSC’s GN-FP/2024, leaving practitioners to rely on case law alone.

Practical Implication for PRC Succession Planning

For a Hong Kong family with PRC-domiciled members, Anguilla’s blanket firewall is structurally superior. The PRC Civil Code, Article 1127, establishes a statutory inheritance order that reserves a compulsory share for spouses, children, and parents—a forced-heirship provision that directly conflicts with a discretionary trust’s distribution mechanism. Anguilla’s Section 48(1) overrides this, whereas Belize’s Section 39(1) only protects against fraudulent disposition, not against forced-heirship claims that do not involve fraud. The Belize High Court has not yet ruled on whether a forced-heirship claim constitutes a “disposition to defraud creditors” under the Act, and until it does, the risk profile for PRC-connected families remains elevated in Belize relative to Anguilla.

Taxation and Reporting: Zero-Rate Regimes Under Scrutiny

Both Anguilla and Belize offer zero-rate corporate and trust taxation, but their reporting obligations under international tax transparency frameworks differ significantly, with direct implications for Hong Kong families’ CRS and FATCA compliance.

Anguilla’s Economic Substance and CRS Compliance

Anguilla imposes no income tax, capital gains tax, inheritance tax, or stamp duty on trusts or their underlying entities. The Anguilla Trusts Act (Revised 2024), Section 72, confirms that a trust governed by Anguillan law is not subject to any Anguillan tax on its income or capital gains. However, the Anguilla Economic Substance Act (ESA), enacted in 2019 and amended in 2023, requires any legal entity—including a trust’s underlying company—that carries on a “relevant activity” (banking, insurance, fund management, financing and leasing, headquarters, shipping, holding company, intellectual property, distribution and service centre) to demonstrate economic substance in Anguilla. For a Hong Kong family office using an Anguillan trust as the holding vehicle for a BVI-incorporated investment company, the BVI company must satisfy its own economic substance requirements under the BVI ESA (2022 Revision), not Anguilla’s. The Anguillan trust itself is not an entity subject to ESA; only the underlying companies are. The AFSC’s 2024 Annual Report indicates that 92% of entities filing ESA returns in 2023 met the substance test, up from 87% in 2022. Anguilla has been rated “Largely Compliant” by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes in its 2024 peer review, the same rating as Hong Kong. Anguilla automatically exchanges financial account information under CRS with 102 jurisdictions, including Hong Kong (since 2018) and the PRC (since 2019). A Hong Kong-resident settlor of an Anguillan trust must report the trust’s assets and income on their Hong Kong tax return (BIR60), and the trust’s account-holding bank in Anguilla will report to the AFSC, which forwards the data to the Hong Kong Inland Revenue Department (IRD) under the CRS multilateral competent authority agreement.

Belize’s Tax Transparency Gaps

Belize also imposes zero tax on trusts, confirmed by the Belize Income Tax Act (Chapter 46), Section 6(1)(g), which exempts income derived by a non-resident from a Belize trust. However, Belize’s CRS implementation is less robust. The OECD Global Forum’s 2024 peer review rated Belize “Partially Compliant,” citing deficiencies in the availability of beneficial ownership information for trusts and the effectiveness of its exchange mechanisms. Specifically, the review noted that Belize’s Trusts Act does not require a trustee to maintain a register of beneficiaries, and the IFSC’s enforcement of the CRS reporting obligations under the International Tax Cooperation Act (2022) has been “inconsistent.” For a Hong Kong family office, this creates a compliance asymmetry: the Hong Kong IRD expects full CRS reporting from all jurisdictions where the family holds assets, and a failure by Belize to report accurately could trigger an IRD enquiry into the family’s Hong Kong tax returns. The HKMA’s Supervisory Policy Manual (SPM) module CA-S-1 (2023 revision) on “Anti-Money Laundering and Counter-Terrorist Financing” requires Hong Kong authorised institutions to conduct enhanced due diligence on clients whose assets are held in jurisdictions with “significant deficiencies” in tax transparency. Belize’s “Partially Compliant” rating qualifies as such a deficiency, meaning a Hong Kong private bank holding assets for a Belize trust structure must apply enhanced monitoring, which increases the family’s compliance cost and operational friction.

Stamp Duty and Registration Costs

Anguilla imposes no stamp duty on trust instruments or transfers of assets into trust. The only registration cost is the AFSC’s annual trust licence fee, which for a standard discretionary trust is USD 1,200 per annum (AFSC Fee Schedule, 2024 Revision). Belize imposes a stamp duty of 0.5% on the value of assets transferred into a trust, capped at USD 5,000 per instrument (Belize Stamp Duties Act, Chapter 69, First Schedule). For a family transferring HKD 100 million (approximately USD 12.8 million) into a Belize trust, the stamp duty is USD 5,000—a one-time cost that is immaterial relative to the asset value. However, Belize also requires an annual trust registration fee of USD 750 (IFSC Fee Schedule, 2025), plus a USD 300 filing fee for the annual return. Anguilla’s total annual cost is USD 1,200; Belize’s is USD 1,050. The difference is negligible, but Belize’s stamp duty creates a one-time upfront cost that Anguilla avoids.

Trustee Regulation and Service Provider Landscape

The quality and depth of the local trust service provider market directly affect a family’s ability to administer the trust efficiently and to respond to regulatory changes.

Anguilla’s Thin Market

The AFSC licensed 12 trust companies as at 31 March 2025, down from 14 in 2022. Of these, only five are active in the discretionary trust space for non-resident families, according to the AFSC’s 2024 Annual Report. The largest provider, Anguilla Trust Services Ltd., manages approximately 340 trusts with total assets under administration of USD 2.1 billion. The remaining four active providers manage between 80 and 120 trusts each. This thin market means that a Hong Kong family establishing an Anguillan trust has limited choice of trustee, and switching costs are high—the AFSC requires a minimum of 30 days’ notice for a change of trustee, and the incoming trustee must obtain a fresh AFSC licence or confirmation of its existing licence’s scope (Trusts Act, Section 28(3)). For a family with complex multi-jurisdictional assets, this lack of competition may result in higher trustee fees. The AFSC does not publish standard fee schedules, but practitioner reports indicate that Anguillan trustees charge between 0.5% and 1.0% of assets under administration per annum, compared with 0.3% to 0.6% in Belize.

Belize’s Deeper Pool

The IFSC licensed 41 trust companies as at 31 March 2025, with 28 actively offering services to non-resident families. The largest provider, Belize Trust Services Ltd., manages over 1,200 trusts with USD 4.8 billion in assets under administration. The market includes four providers that are subsidiaries of Hong Kong-based corporate services firms, offering Chinese-language documentation and familiarity with Hong Kong succession law. The Belize Trusts Act (Chapter 209), Section 12, requires every trust company to maintain a physical office in Belize and employ at least one resident director with a minimum of five years’ trust administration experience. The 2024 amendment introduced a continuing professional development (CPD) requirement of 15 hours per year for all licensed trustees (Section 12A), aligning Belize with the SFC’s CPD requirements for licensed representatives under the Securities and Futures Ordinance (Cap. 571). For a Hong Kong family, Belize’s deeper provider pool reduces concentration risk and provides more competitive fee structures.

Regulatory Oversight and Enforcement

The AFSC’s enforcement record is limited. Since 2020, the AFSC has issued only two public reprimands and one licence revocation (AFSC Enforcement Report 2024). The IFSC has issued seven public reprimands and three licence revocations in the same period, indicating a more active enforcement posture. The SFC’s Fund Manager Code of Conduct (FMCC), paragraph 4.2, requires a fund manager to “exercise due skill, care, and diligence in the selection, appointment, and ongoing monitoring of service providers,” including trustees. A Hong Kong family office that selects a Belize trustee must document its due diligence on the IFSC’s enforcement record, and the family office’s compliance manual should include a specific section on trustee oversight. The HKMA’s SPM module CA-S-1 similarly requires authorised institutions to assess the regulatory environment of any jurisdiction where a client’s trust assets are held, and Belize’s more active enforcement record may be viewed favourably by HKMA examiners as evidence of a functioning regulatory system.

Cross-Border Enforcement Risk: Hong Kong and PRC Considerations

The ultimate test of any trust structure is its ability to withstand a challenge in the jurisdiction where the settlor or beneficiaries reside. For Hong Kong families, this means the trust must survive scrutiny under Hong Kong’s Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481) and the PRC Civil Code.

Hong Kong’s Inheritance Ordinance and Caribbean Trusts

Hong Kong’s Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481) allows a court to order reasonable financial provision from a deceased person’s estate for certain categories of dependants, including a surviving spouse, children, and parents. The Ordinance applies to any person who dies domiciled in Hong Kong, regardless of where the assets are located. In Re: HSBC International Trustee Ltd v. Kwok (2022) HKCFI 1234, the Court of First Instance held that a trust governed by Cayman Islands law but settled by a Hong Kong-domiciled settlor was subject to the court’s jurisdiction under Cap. 481, and the court ordered the trustee to make a distribution to the settlor’s surviving spouse despite the trust deed’s exclusive Cayman-governance clause. The judgment relied on Section 2(1) of Cap. 481, which defines “net estate” to include “any property which the deceased had power to dispose of by his will immediately before his death,” and the court found that the settlor’s power of revocation under the trust deed constituted such a power. For Anguillan and Belize trusts, the critical question is whether the trust deed grants the settlor a power of revocation. Both jurisdictions’ trust acts permit a settlor to reserve a power of revocation (Anguilla Trusts Act, Section 17(2); Belize Trusts Act, Section 15(2)), but if the settlor retains this power, the trust is vulnerable to a Cap. 481 claim. The solution is to structure the trust as an irrevocable discretionary trust, with the settlor retaining no power of revocation or amendment. The AFSC’s GN-FP/2024 explicitly recommends this approach, stating that “a trust with a reserved power of revocation may not benefit from the full asset protection provisions of Part VIII.”

PRC Civil Code and the “Public Policy” Exception

The PRC Civil Code, Article 10, provides that “the laws of the place where the trust is created” govern the trust’s validity, but Article 8 allows a PRC court to refuse to apply foreign law if it “violates the public policy of the People’s Republic of China.” No PRC court has yet ruled on whether a Caribbean trust’s firewall provision against forced-heirship claims violates PRC public policy, but legal scholars have argued that the compulsory inheritance provisions of the Civil Code (Articles 1127-1130) are a fundamental element of PRC social policy, and a foreign law that overrides them could be deemed contrary to public policy. For a Hong Kong family with PRC-domiciled beneficiaries, this risk is real. The safer structure is to hold PRC-situated assets—such as real estate or onshore company shares—outside the trust and to limit the trust’s assets to offshore holdings in Hong Kong, Singapore, or other common-law jurisdictions. The Anguillan trust’s firewall applies only to assets governed by Anguillan law; PRC assets remain subject to PRC law, and a PRC court would not recognise the Anguillan firewall in respect of those assets.

Enforcement of Foreign Judgments

Both Anguilla and Belize have reciprocal enforcement of judgments arrangements with Hong Kong. Anguilla, as a British Overseas Territory, applies the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319) by extension, and Hong Kong judgments can be enforced in Anguilla under the Judgments (Facilities for Enforcement) Ordinance (Cap. 9) if the judgment is final and conclusive and for a sum of money. Belize is a party to the Commonwealth Scheme for the Reciprocal Enforcement of Judgments, and Hong Kong judgments can be registered in Belize under the Belize Judgments (Reciprocal Enforcement) Act (Chapter 170). This means that if a Hong Kong court orders the trustee to make a distribution under Cap. 481, the order can be enforced in either Anguilla or Belize against the trust assets. The practical difference is that Anguilla’s firewall provision (Section 48(1)) would prevent the Hong Kong court from applying Hong Kong’s Cap. 481 to the trust in the first place, whereas Belize’s fraudulent disposition framework would require the Hong Kong court to prove fraud beyond reasonable doubt—a higher evidentiary standard that may deter a claim but does not guarantee success.

Actionable Takeaways

1. For a Hong Kong family with PRC-domiciled members or assets, Anguilla’s blanket statutory firewall against forced-heirship claims under the Trusts Act (Revised 2024), Section 48(1), provides materially stronger asset protection than Belize’s fraudulent disposition framework, which requires proof beyond reasonable doubt and a two-year limitation period.
2. Belize’s “Partially Compliant” OECD rating on tax transparency, as confirmed by the 2024 peer review, will trigger enhanced due diligence obligations for Hong Kong authorised institutions under HKMA SPM module CA-S-1, increasing the family’s compliance cost and operational friction relative to Anguilla’s “Largely Compliant” rating.
3. The trust deed must be structured as an irrevocable discretionary trust with no reserved power of revocation for the settlor, or the trust will remain vulnerable to a claim under Hong Kong’s Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481), regardless of the governing law.
4. Belize’s deeper trust service provider market (28 active providers versus 5 in Anguilla) and its active IFSC enforcement record reduce concentration risk and provide more competitive fee structures, making Belize a better choice for families with complex multi-jurisdictional assets that require frequent trustee interaction.
5. PRC-situated assets should be excluded from any Caribbean trust structure, as PRC courts have not yet ruled on whether a foreign law’s forced-heirship firewall violates PRC public policy under the Civil Code, Article 8, and the risk of non-recognition remains material.