Business Ownership In Belize: The Expat Dream

Belize is a popular destination for expats looking to set up a business, with its tropical climate, laid-back lifestyle, and English-speaking locals. The country offers many advantages for entrepreneurs, including tax benefits, low costs of living and doing business, and a high percentage of undeveloped land. However, it is important to be aware of the challenges and restrictions when setting up a business as an expat in Belize. This includes the requirement to register the business, obtain necessary permits and licenses, navigate the slow pace of operations, and deal with government red tape.

Work permits and residency

If you are planning to work in Belize, you must apply for a Temporary Employment Permit (also known as a "Work Permit"). This is a three-step process that can take anywhere from three weeks to three months for approval. Here is a breakdown of the steps:

• Submit an application online at the Ministry of Rural Transformation, Community Development, Labour and Local Government. If you will be working for a company, they will need to apply for the work permit on your behalf. If you are self-employed, you must complete the application yourself. A long list of documents must be submitted, including a police report from your local law enforcement agency.
• Once your application is approved, you will receive a letter detailing the next steps to take before proceeding to your local immigration office. Call your local immigration office to ensure they have received a copy of the approval letter.
• Visit the immigration office and pay the work permit fee (usually $1,500 for US, Canadian, and UK citizens, and $2,000 for EU citizens). They will add a special endorsement to your passport, allowing you to work in Belize for up to one year. Note that this permit is only valid for the specific employer it was issued for.
• Visit your local Belize Social Security office and apply for a social security card, which will be valid for one year and serve as proof of your ability to work in Belize.

If you plan to remain in Belize long-term, you may eventually want to apply for permanent residency. To be eligible, you must live continuously in the country for one year without leaving for more than 14 days. The application process can take anywhere from six months to two years, and you must provide financial documents, health tests, and police records. The cost of application varies depending on nationality: US citizens pay $4,000, EU citizens pay $3,000, and UK and other Commonwealth country citizens pay $3,000.

Once you have been a permanent resident of Belize for at least five years, you may apply for citizenship. The fee for this is $150, and it requires medical tests, up-to-date police records, and an interview. To qualify, you cannot have left Belize for more than 30 consecutive days or for more than three months in any given year during your residency.

Tax benefits and registration

Belize is a tax haven, which means that individuals and corporations can legally reduce their tax liabilities. The country's tax code defines offshore income as dividends, capital gains, earned interest, and revenues. Dividends paid by offshore companies incorporated in Belize to non-citizens are also tax-free. Belize does not share information with international taxing authorities, providing corporations and individuals with confidentiality.

The Government of Belize offers many benefits to foreign investors looking to set up a business in the country. There are fiscal incentives, including the possibility of reductions on import duties, and there are also commercial-free zones and export processing zones.

If you are a US expat, you are still required to file a US tax return every year, reporting your worldwide income to the Internal Revenue Service (IRS), even if you earn all of your income in Belize. Additionally, you may also be required to file a tax return in Belize. The country has a territorial tax system, which means that you are only taxed on income earned within Belize. If you make under $26,000 BZ, you are exempt from income tax.

To register your business in Belize, you must follow a series of procedures. Firstly, you must register your company with the Companies Registry in Belmopan. Unless you are a permanent resident, you must have a Belizean partner. If you want to become a corporation, you will need to incorporate, which will require a lawyer. You will also need to apply for a trade license from the town council of your district capital, unless you are in a rural area. A fee will be assessed based on the rental value of the property you plan to do business on.

You will also need to apply for a work permit, and if you plan to sell alcohol, you must apply for a liquor license. You will need to register with the Income Tax Department for the collection of business tax, which is generally only collected on businesses with revenue above BZD75,000, but all businesses must register. Anyone engaged in a taxable activity must register with the General Sales Tax Department. Any business that plans to have employees must register with the Belize Social Security Board within seven days of hiring employees.

Business types and incentives

Belize is a developing nation with a small population, making it a good place for an overseas venture. Expats run all types of businesses in Belize, including tourism-related businesses such as restaurants, bars, and B&Bs, as well as yoga studios, health spas, hair salons, vitamin shops, specialty coffee and wine stores, pool supply and operation services, and organic farms. A growing number of expats are also working online, with some continuing to work for their North American employers remotely.

The Belizean government offers incentives to entrepreneurs, including exemptions from import and export duties and a variety of taxes. To qualify, you must demonstrate how your business will benefit Belize economically, particularly by creating jobs for local people.

The government also offers benefits to foreign investors, including fiscal incentives and significant tax benefits. There are commercial-free zones and export processing zones, and the possibility of reductions on import duties.

The optimum authorised capital for creating an offshore company in Belize is $50,000. The company must be headquartered in Belize, and you must have a local registered agent. There is no restriction on nationality or residence.

If you are not a permanent resident, you will need a work permit to work legally. Self-employment permits are the easiest to obtain, as you will likely be viewed as someone who will create jobs and employ local Belizeans.

The Belize Trade and Investment Development Service (BELTRAIDE) helps international and local investors establish and develop businesses in Belize.

Trade licenses

To operate a business within a town or city in Belize, you need a trade license. Businesses operating rurally or in villages don't require one. Trade licenses are obtained from the local city or town council. The fee for a trade license is based on the rental value of the property you plan to do business on. The rate of 3.5% is charged for supermarkets, grocery stores, furniture shops, and repair shops. The rate of 5% is charged for hardware stores, gas stations, and dentistry offices. The maximum rate charged is 25% for businesses in gaming or monopolies. The Trade Licensing Board, responsible for each town or city, approves trade license applications quarterly.

The following are the general criteria for a trade license application:

• Submit a copy of the Business Names Registration
• Submit the application form
• Interview with the applicant
• The business must be located in a designated "commercial area" of the city

The following are examples of businesses that require a trade license:

• Building contractors
• Medical practitioners
• Any business providing a service

If you already have a trade license and wish to move your business to a new location, you must inform the board in writing and provide the address of the new location.

Food Handlers' Licenses

All kitchen staff require food handlers' licenses from the Department of Health.

Liquor Licenses

If you plan to sell alcohol, you must obtain a liquor license from the Belize Tourist Board.

Hotel Licenses or Airbnb License

If you want to manage rentals through online booking sites, you need a hotel or Airbnb license from the Belize Tourist Board.

Banking and finance

Belize is a tax haven, not taxing foreign earnings, and it offers fiscal incentives to foreign investors, such as reductions on import duties. It also has commercial-free zones and export processing zones.

To set up a business in Belize, you will need to open a bank account in an international bank. This is because, without residency, you won't be able to open a personal domestic bank account. You can open an account with an offshore bank, or you can form a local company and have that company open a bank account.

There are several national and international banks to choose from, including:

• Heritage Bank
• Caye International Bank
• Belize Bank
• Scotia Bank
• Atlantic Bank
• Choice Bank Ltd
• Market Street Bank Ltd
• HSBC Expat

Each bank has different requirements for opening an account, but generally, you will need two references or letters of recommendation from banks in your home country. If you don't have two banks, a letter of reference from a Belizean with an account at the relevant bank may be accepted. You will also need to provide two forms of identification and proof of residence, such as a utility bill.

The standard minimum balance for opening a demand deposit account is $1000. A savings account will require a higher minimum balance, ranging from $500 to $25,000, but will yield a higher interest rate, from 0.5% to 3%.

It's worth noting that citizens and nationals of the US and Canada should ensure that the bank they intend to do business with is registered with the IRS under the US Foreign Account Tax Compliance Act (FATCA) and Intergovernmental Agreements (IGAs).

Once you have a bank account, you can apply for loans to finance your business. However, unless you are a long-term resident, loans are rarely approved, and interest rates are very high.

If you are a US citizen, you can avail of the Foreign Earned Income Exclusion, which allows you to earn $112,000 tax-free in the coming tax year.

Frequently asked questions