Incorporate In Belize: What You Need To Know

Belize is a Central American country known for its English-speaking ability and robust offshore environment. The country offers a favourable tax regime, including no capital gains tax, making it an attractive destination for businesses aiming to maximise profits and minimise tax liabilities.

The process of incorporating a company in Belize can be long and complex, but it offers a variety of opportunities for entrepreneurs seeking to establish their businesses in a thriving and business-friendly environment. With its strategic location between Mexico and Guatemala, Belize serves as a gateway to both North and South America, making it an ideal base for companies looking to expand into Latin America and the Caribbean.

One of the key advantages of incorporating in Belize is the ease of the process, characterised by minimal bureaucratic hurdles, allowing entrepreneurs to focus on their core business activities. Additionally, Belize offers full incorporation within two weeks and relatively inexpensive set-up and annual renewal fees. The country also has no minimum capital requirements, and only one shareholder or director is needed to establish a company.

For those seeking to establish an international business company (IBC), Belize offers several benefits, including tax exemptions and maximum privacy. However, it is important to note that IBCs in Belize cannot trade within the country, own real estate, or undertake banking, insurance, or reinsurance businesses.

Overall, Belize presents a unique opportunity for entrepreneurs and businesses looking to take advantage of its favourable economic and legal environment to establish and grow their ventures.

Requirements for company registration

• A company name that is unique and complies with Belizean regulations.
• A Memorandum and Articles of Association—legal documents outlining the company's objectives, rules, and regulations.
• Approval from the Central Bank of Belize, ensuring compliance with foreign exchange regulations.
• A Certificate of Incorporation, issued by the Belize Companies Registry, confirming the legal existence of the company.
• Appointment of directors, who govern the affairs of the company and make strategic decisions.
• Appointment of officers such as a company secretary or treasurer to handle administrative tasks, regulatory compliance, and financial management.
• Issuance of a company seal, a stamp engraved with the company's name and emblem, used to execute official documents.
• Registration with the Belize Tax Service Department to obtain a Tax Identification Number (TIN).
• Compliance with local taxation requirements, including payment of applicable fees and taxes.
• Maintenance of accounting records and annual tax returns, in accordance with the Accounting Records (Maintenance) Act.
• A registered office address and a registered agent in Belize.
• Due diligence documentation, including certified copies of passports and utility bills for all officers within the company.

Benefits of opening a company in Belize

Belize is a popular choice for investors due to its economic and political stability, business-friendly policies, and attractive tax regime. Here are some key benefits of opening a company in Belize:

Attractive Tax Regime:

• Belize offers a favourable tax system with no income tax, corporate tax, or capital gains tax imposed on International Business Companies (IBCs). There is also no inheritance tax or stamp duty.
• IBCs with income below US$37,500 are exempt from taxes. Otherwise, taxes are charged at a rate between 1.75% to 19%, depending on the nature of the business.
• The country's tax-free regimes, such as Export Processing Zones (EPZ) and Commercial Free Zones (CFZ), aim to boost exports and commercial business, offering tax exemptions on various taxes and duties.

Business-Friendly Environment:

• Belize has a business-friendly economic climate and is constantly working to improve its ease of doing business, attracting foreign investors.
• The process of incorporating a company in Belize is relatively straightforward and can be completed within two weeks, with minimal bureaucratic hurdles.
• The country has supportive policies and incentives in place, such as the Belize Trade and Investment Development Service (BELTRAIDE), which assists new offshore businesses.
• Belize's laws provide privacy protection for company members, allowing them to maintain confidentiality if desired.

Strategic Location:

• Strategically located in Central America, Belize serves as a gateway to both North and South America, providing easy access to markets in these regions.
• Its proximity to the United States makes it an attractive market for exports and is easily accessible by air, land, and sea.

Affordable Operating Costs:

• Belize offers relatively affordable incorporation costs and operating expenses due to low labour, overhead, and real estate costs.
• There are no minimum capital requirements for setting up a company in Belize.

Flexible Corporate Structure:

• Companies in Belize can benefit from a flexible corporate structure, allowing for efficient resource allocation and meeting various requirements.
• Belize has flexible international business laws, and companies are not restricted if they wish to expand or develop their business.

Strong Legal System:

• Belize has a strong legal system, providing a stable environment for doing business.
• The country has taken steps to improve its business laws and policies, enhancing its reputation globally.

Taxation and tax exemption

Belize is considered a tax haven, allowing individuals and corporations to legally reduce their tax liabilities. The country has no capital gains tax, and its 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. However, US residents must still report earnings to the IRS unless their company solely does business in Belize.

Belize's tax regime is favourable to businesses, allowing them to maximise profits and minimise tax liabilities. There is no minimum capital requirement, and the setup and annual renewal fees are relatively inexpensive. The process of incorporation is straightforward and can be completed within two weeks, with minimal bureaucratic hurdles.

The Limited Liability Companies Act, enacted in 2011 and amended in 2023, allows for the formation of LLCs, which offer flexibility and limited liability to their members. LLCs in Belize do not face any significant reporting requirements, and ongoing government fees are low. There is no requirement to file an annual return or financial statements unless the company is conducting business within Belize.

The taxation system in Belize varies depending on the type of business and income. For companies with chargeable revenue exceeding BZD 3 million, a 1.75% tax is applied. Meanwhile, a 3% tax is levied on chargeable income below BZD 3 million. It is important to note that this tax is applied to gross revenue, and deductible expenses are not considered.

Different rates apply to specific activities and classes of income. Tour operators, travel agents, and building contractors are subject to a 6% tax rate. Telecommunication services, real estate businesses, and financial institutions are taxed at 19%. Gambling establishments face a tax rate between 8% and 15%, while companies in the petroleum/oil sector are taxed at 25%.

Belize also levies several other taxes, including a real property tax of 12.5% on the annual rental value for occupied properties and a 2% tax on unoccupied properties. Additionally, there is a land tax of 1% for unimproved lands. A stamp duty is imposed on the transfer of assets, and the purchase of real property is subject to a 10% stamp duty.

Company structure

Belize is an attractive destination for businesses due to its favourable tax regime, strategic location, and business-friendly regulatory framework. The process of incorporating a company in Belize involves several steps, and the specific structure may vary depending on the type of business entity chosen. Here is an overview of the key aspects of company structure when incorporating in Belize:

Company Types

When incorporating in Belize, businesses can choose from different types of entities, each with its own structural characteristics:

• Sole Proprietorship: This is one of the most common company structures in Belize, especially for startups. A sole proprietorship is owned and operated by a single individual who enjoys all profits but also bears all corporate liabilities and debts.
• Partnership: A partnership consists of two or more individuals who jointly own and manage the company. Partners typically have a legal contract outlining decision-making, profit distribution, and conflict resolution.
• Limited Liability Company (LLC): LLCs offer the advantages of both partnerships and limited companies. Members' liability is limited to their capital contributions, and there is flexibility in management structure. LLCs can be incorporated as single-member entities, and they have minimal formation requirements.
• International Business Company (IBC): IBCs are commonly used by foreign nationals when conducting business abroad. They benefit from tax exemptions and low compliance requirements.
• Public Investment Company (PIC): PICs are regulated by the International Business Companies Act (Part XI) and are permitted to operate in Belize while enjoying tax advantages, provided they fulfil certain conditions regarding assets, listed shares, and shareholder arrangements.
• Belize Offshore Trust: Trusts offer asset protection, tax reduction, confidentiality, and flexibility. They are often used in conjunction with IBCs to provide an additional layer of legal security for the owner.

Directors and Shareholders

For most company types, Belize requires the appointment of at least one director, who may be a person or a company. The director's information is not publicly disclosed, and there are no residency requirements. A director can also be a shareholder, and 100% foreign shareholding is permitted.

Registered Agent and Address

Companies incorporating in Belize must appoint a qualified registered agent and maintain a registered office and address in the country. This address is solely for documentation purposes and is not a mailing address.

Operating Agreement/Memorandum and Articles of Association

LLCs in Belize have the flexibility to arrange their operating agreement according to their members' needs. For other company types, a crucial step in the incorporation process is drafting the Memorandum and Articles of Association. These legal documents outline the company's objectives, rules, and regulations and provide clarity on the rights and responsibilities of shareholders and directors.

Compliance and Reporting

LLCs in Belize are subject to compliance requirements, including maintaining accounting records at their registered office or the office of their registered agent. However, they do not face any relevant reporting requirements. For companies not doing business within Belize, there is no requirement to file annual returns, financial statements, or tax returns.

In summary, Belize offers a range of company structures with varying levels of flexibility, liability protection, and compliance requirements. The specific structure chosen will depend on the nature and needs of the business, and it is important to carefully consider the characteristics of each entity type before making a decision.

Privacy and confidentiality

Belize is a highly popular international location for offshore companies, with its stable and democratic government, flexible business structure, and favourable tax regime. The country is also known for its robust privacy and confidentiality policies, which are outlined below.

Belize has a high level of investor privacy protection, with no public records for companies. The country's legislation places client confidentiality at the forefront, with a history of non-compliance, putting client interests first.

Belize will not disclose its banking or fiscal information. The country has strict laws prohibiting the disclosure of bank account information, and such disclosure is only permitted in the event of criminal investigations and with a court order.

Additionally, there are no exchange control policies or restrictions on currency movements in and out of the country, further enhancing the privacy of investors.

For those seeking full anonymity, Belize offers nominee director and shareholder services. These services allow investors to enjoy an even greater degree of confidentiality, as their names will not appear on any public documents.

The country also has a quick and easy incorporation process, which can be completed within a few hours to a few days, ensuring that investors can establish their businesses in Belize promptly and efficiently.

The International Business Company (IBC) structure is a popular choice for offshore companies, as it is fully exempt from paying any taxes in Belize, including income tax, dividend tax, capital gains tax, and stamp duty on the transfers of corporate properties and shares.

Belize also has minimal reporting requirements, with no annual filing or auditing mandates. Companies are only required to maintain accounting records, which can be kept anywhere in the world, providing flexibility for investors.

The combination of favourable tax policies, limited reporting obligations, and robust privacy laws makes Belize an attractive jurisdiction for investors seeking to establish an offshore company.

Frequently asked questions