- Belize free trade zones a class of special economic zone, can be broadly divided into two types of free trade zones – the Export Processing Zone (EPS) and the Commercial Free Zone (CFZ). Both types of free trade zones cater to manufacturing, commercial, office and warehousing activities. Generally, business owners that set up in an EPS focuses mainly on manufacturing and exporting activities while business owners that set up in a CFZ conduct a much wider variety of trade and commercial activities.
- The Commercial Free Zone (CFZ), which is located in the northern part of the country near the Mexican border. The CFZ was established in 1994 to encourage foreign investment, trade, and employment in Belize. The CFZ is an area where companies can import, store, and export goods without paying customs duties, taxes, or fees. Companies operating within the CFZ are exempt from many of the taxes and regulations that apply to businesses operating outside the zone. The CFZ is also exempt from many of the import and export restrictions that apply to the rest of the country. Companies that operate within the CFZ must be registered with the Commercial Free Zone Authority and comply with the regulations of the authority. The CFZ offers a range of business opportunities, including manufacturing, assembly, warehousing, distribution, and services.
- The CFZ has a number of advantages for businesses, including access to a large and growing market in Mexico, lower operating costs, and a favorable business environment. However, companies operating within the CFZ must also comply with the rules and regulations of the authority, and there may be limitations on the types of products that can be imported or exported. Overall, the CFZ offers an attractive option for businesses looking to expand into Belize or the wider Central American market, with its strategic location, favorable business environment, and tax and customs benefits.
- Tetra Consultants’ team of business setup experts has laid down the 6 important things to know about Belize free trade zone in 2023 and jumpstart your business in the nation.
6 Things To Know About Belize Free Trade Zone
- Advantages of company registration in Belize free trade zone: Registering a company in the Belize Commercial Free Zone (CFZ) can offer several advantages, including:
- Tax benefits: Companies operating within the CFZ are exempt from many of the taxes and duties that apply to businesses operating outside the zone. This includes import duties, export taxes, and taxes on profits, capital gains, and dividends.
- Regulatory flexibility: Companies in the CFZ enjoy greater flexibility in terms of regulations and bureaucracy, making it easier to start and operate a business. The CFZ has a simplified registration process and fewer regulatory requirements than other parts of Belize.
- Strategic location: The CFZ is located in the northern part of Belize, near the Mexican border, making it an ideal location for businesses looking to access the Central American market.
- Access to infrastructure: The CFZ has modern infrastructure, including roads, ports, and airports, making it easier for companies to import and export goods.
- Business opportunities: The CFZ offers a range of business opportunities, including manufacturing, assembly, warehousing, distribution, and services. Companies in the CFZ can take advantage of the zone’s tax benefits and regulatory flexibility to grow and expand their business 2. Categories of Belize free trade zones: Belize has several types of free trade zones, including:
- Export Processing Zones (EPZs): These zones are designed to promote export-oriented manufacturing and assembly operations. They offer tax incentives, duty exemptions, and streamlined procedures for importing raw materials and exporting finished products.
- Commercial Free Zones (CFZs): These zones are intended to encourage international trade and commerce. They offer duty-free imports of goods for re-export, as well as tax incentives for businesses that set up operations within the zone. Situated in northern Belize on the Belize/Mexico border, the Corozal CFZ was the first commercial free zone established in Belize to encourage foreign investment and generate employment in the country.
- Agriculture Free Zones (AFZs): These zones are designed to promote agricultural development and export. They offer tax incentives, duty exemptions, and streamlined procedures for importing agricultural inputs and exporting finished products.
- Border Processing Zones (BPZs): These zones are located near the borders with neighboring countries and are intended to promote cross-border trade. They offer streamlined customs procedures, duty exemptions, and other incentives to encourage trade and investment.
Regulatory framework governing Belize free trade zone: The regulatory framework for the Belize Commercial Free Zone (CFZ) is governed by several laws and regulations, including:
- The Commercial Free Zone Act: This is the primary legislation governing the operation of the CFZ. It establishes the CFZ Authority and provides for the establishment and operation of businesses within the CFZ.
- The Customs and Excise Duties Act: This Act governs the import and export of goods in Belize and provides for the regulation of customs and excise duties in the CFZ.
- The Income and Business Tax Act: This Act governs the taxation of businesses operating in Belize, including those in the CFZ.
- The Labor Act: This Act regulates labor relations and employment practices in Belize and applies to businesses operating within the CFZ.
- The Environmental Protection Act: This Act regulates the use of natural resources and the protection of the environment in Belize, including within the CFZ.
- The Intellectual Property Act: This Act governs the protection of intellectual property rights in Belize and applies to businesses operating within the CFZ.
- The Companies Act: This Act governs the formation, registration, and operation of companies in Belize, including those operating within the CFZ.
- The Banking Act: This Act regulates the banking industry in Belize, including within the CFZ.
- It is important to note that the regulatory framework for the CFZ may be subject to change, and businesses operating within the CFZ should stay up-to-date on any changes to the regulatory environment. It is recommended to consult Tetra Consultants business setup professional or business advisor in Belize to get a more customised advise and ensure compliance with all applicable laws and regulations.
4. Regulatory body of Belize free trade zone:The regulatory body for the Belize Commercial Free Zone (CFZ) is the CFZ Authority. The CFZ Authority is a statutory body established under the Commercial Free Zone Act, and it is responsible for regulating the operations of businesses within the CFZ. The CFZ Authority’s functions include:
- Registering businesses that wish to operate within the CFZ.
- Issuing licenses and permits to businesses within the CFZ.
- Monitoring compliance with CFZ laws and regulations.
- Providing infrastructure and services to businesses within the CFZ.
- Promoting the CFZ as a hub for trade and investment.
- The CFZ Authority works closely with other regulatory bodies in Belize, such as the Belize Customs and Excise Department, the Belize Tax Service, and the Belize Labor Department, to ensure compliance with all applicable laws and regulations.
- It is important for businesses operating within the CFZ to work closely with the CFZ Authority and other regulatory bodies to ensure compliance with all regulatory requirements and to take advantage of the benefits offered by the CFZ.
5. Tax incentives offered in Belize free trade zone: The Belize Commercial Free Zone (CFZ) offers several tax incentives to businesses operating within its boundaries. These incentives include:
- Exemption from import duties: Companies operating in the CFZ are exempt from import duties on goods imported into the CFZ for use in their business operations.
- Exemption from sales tax: Companies operating in the CFZ are exempt from sales tax on goods and services sold within the CFZ.
- Exemption from income tax: Companies operating in the CFZ are exempt from income tax on profits earned from business activities within the CFZ.
- Exemption from property tax: Companies operating in the CFZ are exempt from property tax on land, buildings, and other assets located within the CFZ.
- Repatriation of profits: Companies operating in the CFZ are allowed to repatriate their profits to their home country without any restrictions.\
- Exemption from capital gains tax: Companies operating in the CFZ are exempt from capital gains tax on the sale of assets used in their business operations within the CFZ.
6. Requirements and considerations when forming a company in Belize free trade zone: To register a company in the Belize Commercial Free Zone (CFZ), you will need to follow these steps:
- Choose a business structure: Determine the type of business entity you wish to form, such as a corporation, limited liability company, or partnership.
- Choose a company name: Choose a unique name for your company that complies with the regulations of the CFZ Authority.
- Register with the CFZ authority: Complete the CFZ Authority’s registration form, which can be obtained from their website or in person. You will need to provide information about your business, such as its structure, name, and intended activities.
- Submit supporting documents: Along with your registration form, you will need to provide supporting documents, such as a certificate of incorporation, articles of incorporation, and a business plan.
- Obtain required licenses: Depending on the nature of your business, you may need to obtain additional licenses or permits from other regulatory bodies in Belize.
- Open a bank account: Once your registration is complete, you will need to open a bank account in Belize to conduct business transactions.
- Obtain other required registrations: You may need to obtain additional documents, such as a tax identification number and a business license before your company can operate in the CFZ.
- Navigating the country of Belize complex business climate as a firm intending to to register a company in Belize free trade zones might be a challenging process – a hassle to say the least. As such, Tetra Consultants hopes that this article has provided you with a much better understanding about the 6 things to know about Belize free trade zones in 2023 so that you can truly decide on whether you should do so yourself.