Belize, a nation on the eastern coast of Central America, remains one of the popular foreign investors’ hotspots due to its attractive tax regime. Furthermore, its close proximity to the United States not only makes it easy to get to but also an attractive market for exports to the United States. With its business-friendly economic climate, favorable tax benefits and investments policies are put in place. Ultimately, Belize is a lucrative hotspot for investments. Of course, there will be many considerations to be made while starting a business in Belize. Hence, our team at Tetra consultants highlighted 5 advantages your company can benefit from once you have decided to register a company in Belize.
1. Tax-Free Regime:
In Belize, not only income is exempted from tax, but corporate and capital gains taxes are also not imposed on International Business Companies (IBCs). In addition, there are no inheritance tax or stamp duty charges.
A primary concern of an individual opening an offshore company is the taxation system. With the favourable tax policies in Belize, businesses would not have to pay a significant amount of taxes annually. This allows a higher profit and in turn reduce the risk of liquidation.
With the recent changes in legislation in Belize, IBCs that are physically present in Belize or are conducting licensed activity are required to file monthly business tax returns. For companies with income that is under US$37,500, tax exemptions are available for them. In other cases, it will be charged at a rate between 1.75% to 19%, where the exact rate is dependent on the specific nature of your business.
You will only be liable for taxes if your company’s directors comprise of a person residing in Belize or your company is engaged in a trade, business or profession with the bulk of revenue or income derived from Belize.
Qualifying for tax exemption requires an offshore business in Belize to fulfill certain criteria. Firstly, the company is not allowed to conduct business with locals or earn profits within the jurisdiction. Secondly, the company requires a registered address for the business located within the jurisdiction.
2. Investment policies:
The investment policies in Belize are great incentives for foreign investment. In order to boost foreign investments, Belize has two main tax-free regimes, namely Export Processing Zones (EPZ) and Commercial Free Zones (CFZ). These free zones aim to increase the production for the export market, as well as to promote the commercial business.
The EPZ has its focus on non-traditional agricultural products and manufactured goods, which is mainly in the export-orientated industry. Some of the benefits of EPZs include tax exemptions on capital gains tax, property and land taxes, excise, sales and consumption taxes, as well as exemptions on import duty and export duty. On the other hand, the CFZ focuses on the commercial industry, where there are tax exemptions on merchandise and goods which are fundamental for the CFZ business to function well. These businesses are also exempted from income tax, capital tax and gains tax.
Furthermore, both the EPZ and CFZ do not require an import or export license, which makes the process of setting up the business more straightforward. This creates a business-friendly environment in Belize to attract foreign investors.
3. Privacy in Business Operations:
The laws in Belize provide protection for the privacy of the members of the company, which is a huge advantage that attracts foreign investors. In Belize, board members and business members are not required to disclose their identity if they are unwilling to do so.
Furthermore, business owners have the right not to disclose information such as profits, losses, and major financial transactions. The respect given to individuals and corporations in terms of privacy laws attracts global investments. With the option of not disclosing their information, individuals are able to separate themselves from the corporation. This acts as protection to individual assets and financial security.
4. Ease of company formation:
The quick registration of offshore companies making it functional does not require much time. Belize company formation is simple and fast which takes only two full business days.
In order to operate, the popular incorporation choice namely the International Business Company (IBC) allows businesses to be fully exempted from paying any form of tax in Belize. In addition, minimum paid-up capital, filing annual returns, public disclosure of directors, shareholders, charges, loans or agreements are all not required.
Apart from IBC, there exist other types of business entities. In general, there is the requirement of only one shareholder and one director, and both can be held by the same person.
In addition to the tax exemption, the incorporation costs and the operating expenses are relatively affordable. Operation costs are low due to affordable labour, overhead, and real estate. Hence, starting a business in Belize is more viable than in other countries due to its affordability.
The flexibility in the policies regarding the growth of businesses largely benefits foreign investors. Firstly, companies in Belize are able to take on a flexible corporate structure. The IBC allows for such a structure, be it a multiple-shareholder system or a one-person business operation. Such a flexible structure would allow an efficient allocation of resources and meet the various requirements.
Secondly, Belize has flexible international business laws, where companies would not be checked or restricted in the event that they wish to grow and develop the business. Hence, businesses would not be bounded constraints if they wish to expand or develop their business.
With all that being said, starting a business in belize may seem enticing. However, there are definitely still some underlying risks. You may choose to engage the services of Tetra Consultants where our comprehensive service package includes planning and strategizing with our clients to select a suitable business entity, completing the registration process, obtaining required licenses, opening a corporate bank account, trade license application and financial reporting and taxation obligations.
Contact us to find out more about how to register a business in Belize and our dedicated and experienced team will revert within the next 24 hours.