Business Opportunities In Belize: What Americans Need To Know

Belize is an attractive destination for American expats and retirees, and its government welcomes foreign investors, particularly those who can contribute to the country's economic development by offering jobs to Belizeans. The country offers fiscal incentives, including the possibility of reductions on import duties, commercial-free zones, and export processing zones. However, it is not a simple task to start a business in Belize, and there are many obstacles to be aware of. This paragraph will explore the topic of Americans doing business in Belize, including the challenges and opportunities that come with it.

Foreigners are facilitated by the government

Belize is a developing country with a small population and a decent per capita income, but its economy is still in its infancy. The government is therefore keen to welcome and facilitate foreign investors who can help develop the country's infrastructure and create jobs for Belizeans.

The Belize government says it welcomes investors who can contribute to the economy and provide jobs, particularly in tourism, agriculture, and manufacturing. The government will help foreign investors through the process of setting up a business and ensure that obstacles are removed from their path.

The government has set up trade promotion groups such as BELTRAIDE, which provide information and support for new investors, and try to streamline the startup of new business ventures.

There are also multiple incentive programs aimed at promoting investment in the country, including the Fiscal Incentives Act, the International Business and Public Companies Act, the Export Processing Zone Act, and the Commercial Free Zone Act.

On 28 June 2024, the Belize government amended the Fiscal Incentives Act to provide for duty and tax exemptions for project construction costs and establishment, and duty-free importation of household effects and equipment for skilled foreign workers and managers on investments over US$250 million. This amendment is designed to grant development concessions to flagship investments in a more transparent manner.

There are six steps to formalising a business in Belize:

• Business name registration: This is a one-time, one-day process undertaken at the Companies & Corporate Affairs Registry in the City of Belmopan.
• Trade license acquisition: This is obtained at the Town Board or City Council and permission is granted at one of four quarterly meetings held throughout the year.
• Income tax registration: All businesses must register with the Income Tax Department and Government Sales Tax Department.
• GST registration: All persons who are engaged in a taxable activity with an annual turnover exceeding BZ$75,000 must register with the Department of Government Sales Tax.
• Social security registration: Persons who employ one or more persons must register for social security with the Belize Social Security Board within seven days of employing the first employee.
• Registration/protection of intellectual property: This is done by visiting the Belize Intellectual Property Office in the City of Belmopan.

Overall, the Belize government is keen to facilitate foreign investors and has put in place various measures to support and streamline the process of setting up a business in the country.

Tax-free income for Americans

Belize is a desirable location for US expats due to its stunning natural environment, friendly locals, laid-back lifestyle, beaches, English-speaking population, and low cost of living. The country also offers ample opportunities for virtual and brick-and-mortar businesses, with the government keen on welcoming and facilitating foreign investors.

One of the biggest perks of doing business in Belize is the potential for tax-free income. Here's what you need to know about tax-free income for Americans in Belize:

Foreign Earned Income Exclusion (FEIE)

Americans can take advantage of the Foreign Earned Income Exclusion (FEIE) privilege, which allows them to earn up to $100,000 of tax-free income in Belize. This exclusion is a significant benefit, as it enables Americans to keep more of their profits without having to pay taxes on that income to the IRS.

Foreign Tax Credit (FTC)

In addition to the FEIE, Americans can also benefit from the Foreign Tax Credit (FTC). This credit gives Americans a $1 tax credit for every dollar of tax they've paid in Belize. This credit can be especially valuable if their income exceeds the FEIE threshold, as it can help reduce their overall tax liability.

Tax Residency Requirements

To qualify for the tax benefits mentioned above, Americans typically need to establish tax residency in Belize. An individual is considered a tax resident in Belize if they spend at least 183 days in the country during a calendar year or hold a permanent residency visa. Obtaining a permanent residency visa is a straightforward process and can be achieved through investment or starting a business in the country.

Tax Filing Requirements

While Americans can enjoy tax-free income in Belize, they should be aware of their tax filing requirements. As US citizens, they are still required to file a US tax return every year, regardless of where they live or earn their income. This means reporting their worldwide income to the Internal Revenue Service (IRS) and potentially paying taxes on any income exceeding the FEIE threshold. Additionally, Americans in Belize may also be required to file a tax return in Belize if they have taxable income there.

Tax Exemptions in Belize

Belize has a territorial tax system, which means individuals are only taxed on income earned within the country. Certain income sources, such as pension income, are exempt from taxation in Belize. Additionally, there is no capital gains or inheritance tax in Belize, making it an attractive jurisdiction for retirees and investors.

In conclusion, Belize offers Americans the opportunity to earn tax-free income through its FEIE and FTC programs. By establishing tax residency and understanding their filing requirements, Americans can take advantage of these benefits while enjoying the country's many other attractions as expats or business owners.

Investment leads to residence

Belize is an attractive prospect for investors, with its strategic location, relatively low taxes, and welcoming environment. The country offers two types of residence status: Permanent Residence and Temporary Residence.

Permanent Residence

Permanent Residence is for those who want to make Belize their home and stay in the country for an extended period. To qualify, you must have been legally residing in Belize for at least one year before submitting your application, with no single absence from the country of more than 14 days during that time. You must also prove your financial stability and have a clean criminal record.

Temporary Residence

Temporary Residence is an option for those who have made or are in the process of making a substantial commercial investment in Belize but cannot meet the requirements for Permanent Residence due to commitments outside the country. This status is granted for one year and is renewable. To qualify, you must show evidence of investments in Belize valued at a minimum of BZ$500,000 (US$250,000).

The process of obtaining residency in Belize can vary depending on individual circumstances, and it is recommended to work with a specialist in Belizean immigration to ensure all requirements are met.

Other Options

Belize also offers the Qualified Retired Persons Incentive Program (QRP), which provides tax benefits and allows for permanent residency. To qualify, you must be at least 45 years old, have a consistent income, and meet certain financial requirements.

Additionally, the Self-Employed Program allows those planning to start a business in Belize to apply for permanent residency by investing a certain amount of money in their business and meeting other requirements.

Dual Citizenship

Belize recognizes dual citizenship, so investors do not need to relinquish their domestic citizenship when acquiring Belizean citizenship. After living in Belize for at least five years as a permanent resident, you may be eligible to apply for citizenship through naturalization.

Internet connectivity issues

Belize has decent internet coverage, but it is slow and expensive. The country has many internet service providers offering various services, including satellite, DSL, cable, and fiber optics. Satellite internet is a good option for those in rural areas and the cayes (islands), as it doesn't require a physical connection. However, it can be more expensive and requires a technician to set up.

If you're looking for a more affordable option, bringing your own phone and using Wi-Fi can be a budget-friendly choice. While international roaming service is not cheap in Belize, you can find hotspots in hotels, restaurants, coffee shops, and other tourist facilities. These usually have QR codes displayed for easy connection. Local carriers have also established Wi-Fi towers in tourist areas, and cell phone data is widely available for purchase.

For those seeking a more permanent connection, DSL (or ADSL) lines are a popular choice, providing high-speed broadband internet access. Both DigiCell and Smart offer unlimited internet plans starting at affordable prices. The national telephone company, Belize Telemedia Limited, also provides DSL cable internet with prices starting at just under $20 per month.

In summary, while internet access in Belize has improved, with higher speeds and lower prices, it still lags behind other countries in the region. However, with the right choices and some planning, staying connected in Belize is achievable and more affordable than it used to be.

Employment laws and work permits

Belize's labour regulations are designed to protect the local job market and prioritise the employment of Belizeans. Employment of foreign citizens is possible, but under certain circumstances. There are two types of work permit applications:

• Application for Permission to Employ a Foreigner: Any foreign citizen who wishes to work in Belize must be a legal resident and have resided in the country for at least six months. They must have the proper visas and/or permits issued by the Immigration Department. The prospective employer must submit the application for the desired foreign worker, along with three passport photos, $20 in stamps, a valid passport, and proof that the individual is qualified for the job. The employer must also provide proof that they have first tried to hire a Belizean for the position, such as advertising the vacancy locally for at least three weeks.
• Application for Temporary Self-Employment: This category is relevant for foreign investors and applicants who are legally in the country with the proper visas and/or permits. They must provide proof of reasonably sufficient funds for their proposed venture, such as a local bank statement. Applicants must also obtain a reference from the relevant ministry or local organisation concerned with the category of work involved. The six-month residency requirement is waived in this case, and it is assumed that the venture will lead to the creation of employment opportunities for Belizeans.

All applications must be presented to the Labour Officers in the respective districts where the person is expected to work. The Labour Minister has the authority to recommend approval for all applications.

The process for applying for a work permit involves several steps:

• Submission of Application: The application must be made at any Labour Department Office. If the applicant is employed, their employer must submit the application on their behalf. For self-employed individuals, they need to submit the application themselves.
• Notification of Application Status: Within 30 days, the Labour Department will inform the applicant about the status of their application. If approved, the applicant must visit the Labour Department Office to receive a copy of the approval letter. If denied, the applicant must receive a copy of the denial letter and update their legal status with the Immigration Office.
• Visit the Immigration Office: Applicants with approved applications must visit the Immigration Office and bring the approval letter. They will be informed about the temporary employment permit fees, which must be paid at this office. Additionally, they will be directed to the nearest Belize Tax Service to request an Income Tax Letter.
• Issuance of Permit: Applicants must present their valid passport, proof of payment, and Income Tax letter to the Immigration Office, as stated in the approval letter. The permit will be issued immediately upon confirmation of payment.
• Social Security Card Application: After receiving the permit, applicants must proceed to apply for their Social Security Card in the district where their business will operate. It is important to note that the social security card is only valid for one year.

The work permit fees vary based on the type of work and range from $25 to $750. Additionally, there are annual fees to be paid to the government upon approval of the work permit, which is BZ $2,000.00.

It is worth noting that citizens of the United States do not require a visa to visit Belize, and they can obtain a visa on arrival for a fee of US$50 if they have a permanent resident status or multiple-entry visa. However, if they intend to stay in Belize for more than six months, they must obtain a work permit.

Frequently asked questions