Forming An Ldc In Belize: A Comprehensive Guide

Belize is a Central American country with a business-friendly environment, a stable government, and a thriving economy. It is strategically located between Mexico and Guatemala, making it an attractive gateway to North and South America. The country boasts a favourable tax regime, including no capital gains tax, and minimal bureaucratic hurdles, making it a desirable destination for businesses aiming to maximise profits and minimise tax liabilities.

The process of forming a company in Belize can be completed within a few days to a few weeks, with minimal requirements. This includes allowing for a single director and shareholder, no minimum capital requirements, and the ability to complete the process remotely.

However, it is important to note that companies operating in specific sectors, such as banking and insurance, may have additional requirements and restrictions. Additionally, while Belize offers tax advantages for non-residents, resident companies are subject to different tax obligations.

Overall, Belize presents an attractive opportunity for entrepreneurs and businesses seeking a stable and business-friendly environment to establish their operations.

Business name registration

Registering your business name is the first step to formalising your business in Belize. This is a one-time, one-day process that can be completed at the Companies & Corporate Affairs Registry in the City of Belmopan. Here are the steps you need to take to register your business name:

Step 1: Choose a Unique Business Name

When selecting a business name, there are some key restrictions to keep in mind:

• The company name must be unique and cannot be similar to any existing business names in Belize.
• The name cannot contain any insulting or vulgar words.
• The name cannot imply any government patronage or affiliation.
• The name cannot contain certain words such as "Royal", "Imperial", etc.
• If your company name includes words with financial connotations, such as "bank" or "loans", you will need to obtain the relevant license.

Step 2: Gather the Required Documents

To register your business name, you will need to provide the following documents:

• A completed application form, which can be obtained from the Companies & Corporate Affairs Registry website or filled out at their office.
• A valid Social Security card for all owners/partners.
• The registration fee of $25.

Step 3: Submit the Application

Submit your application, along with the required documents and fee, to the Companies & Corporate Affairs Registry. The minimum average processing time is 3 hours. Once your application is approved, your business name will be officially registered and protected in Belize.

It is important to note that registering your business name is a crucial step in establishing your company's identity and protecting your brand. This will also allow you to proceed with the next steps in forming your business in Belize, such as obtaining the necessary licenses and permits.

Trade license acquisition

After registering your business name, the next step is to obtain a trade license. This is a crucial step for anyone operating a business within an urban area in Belize, i.e., within the boundaries of a town or city. The trade license allows you to exchange goods or services for monetary value.

To obtain the license, you must fill out an application form at the Town Board or City Council. Permission is granted at one of the four quarterly meetings held annually. The annual fee for the trade license is determined by an annual rental value of your premises. Evaluators will conduct a site visit to assess the premises and calculate the annual rental value, and the trade license fee is typically 25% of this value.

This step is necessary before you can proceed with registering for Income Tax and Government Sales Tax.

Income tax registration

After registering your business name and obtaining a trade license, you must register with the Income Tax Department and Government Sales Tax Department for tax purposes. This is a mandatory step for all businesses operating in Belize.

Upon completion of the registration process at the Income Tax Department, your company will be issued a unique Tax Identification Number (TIN). This TIN number will be used for General Sales Tax (GST), Customs, and Excise processes.

The TIN is required for businesses to comply with tax obligations, including paying taxes on receipts, whether in cash or in kind, and whether received or credited, without any deductions for expenses. The tax is payable by any person practicing their profession or any firm carrying on business in Belize, including companies, corporations, consultants (both local and foreign), and any other entity providing goods and services.

The income tax registration process ensures that your business complies with the Income Tax and Business Tax Act, Chapter 55 (Revised Edition). This legislation outlines specific tax obligations for different categories of taxpayers.

For example, persons carrying on a trade or business earning $75,000 or more per annum, where such receipts are their sole source of livelihood, are subject to taxation. Similarly, self-employed individuals earning $20,000 or more per annum from their profession or vocation and relying solely on those earnings are also taxed.

It is important to note that the tax registration process may vary depending on the specific structure of your business (e.g., company, partnership, sole proprietorship). Ensure that you provide all the necessary documentation and complete the relevant forms to facilitate a smooth registration process.

Additionally, keep in mind that income tax rates and thresholds may be subject to change, so it is advisable to refer to the latest guidelines provided by the Belize Tax Services or seek professional advice to ensure compliance with the applicable tax laws in Belize.

GST registration

To register for General Sales Tax (GST) in Belize, you must first ensure that your business meets the eligibility criteria. All persons or companies engaged in a taxable activity with an annual turnover of $75,000 or more must register with the Department of General Sales Tax. This includes businesses that have been operating for less than 12 months, but with an average monthly value of taxable supplies of $6,250 or more. Additionally, every promoter of public entertainment and licensee or proprietor of places of public entertainment must be registered, regardless of their annual gross sales or receipts.

Once you have confirmed your eligibility, you can proceed with the registration process. Here are the steps to register for GST in Belize:

• Obtain the necessary application forms: Visit any local Belize Tax Service (BTS) Office to obtain the Application for Registration Form. The specific form you need depends on the type of entity you are registering (company, partnership, non-profit, or sole-proprietorship/individual). Ensure you have all the required supporting documents, such as the company registry certificate, Articles of Association, Memorandum of Association, and social security cards or passports for shareholders, directors, and employees.
• Submit the completed application form: Fill out the Application for Registration Form accurately and submit it to the Belize Tax Service, along with copies of the relevant supporting documents.
• Await processing and inspection: The tax department will review your application. If there is no information about the applicant in their database, they will conduct a site inspection. They may also request additional information during this process.
• Receive your Certificate of Registration: If your application is approved, the Commissioner will register you for GST. You will receive a Certificate of Registration, with additional copies if requested. The original "official" copy of the certificate must be displayed publicly in each business location that you operate.
• Start charging and accounting for GST: Once registered, you are required to charge GST on your taxable supplies as output tax and can claim credit on your purchases as input tax. Ensure you comply with GST filing requirements and submit your GST returns regularly.

Please note that the registration process typically takes one month from the date of eligibility, and only registered persons or entities can charge GST on their supplies.

Social security registration

To register for social security in Belize, you must register with the Belize Social Security Board within seven days of employing your first employee. This is a requirement for any person or business employing one or more people, according to the Social Security Act Chapter 44 of the Laws of Belize, 1988, revised in 2000-2003.

The registration must be completed in person at any Social Security Board branch office. An Employee List (R1A) must be submitted, along with the following documents:

Proof of Identification:

• Valid Social Security Card, Passport, or Voters' Identification Card for owners/partners.
• If the owner resides abroad, a clear copy of a photo ID of the authorized representative must be presented, along with a letter of authority to conduct business on the owner's behalf.
• If the subscriber/shareholder or director is a company, a valid ID of the authorized representative must be presented.

Proof of Address:

• A utility bill for the local business must bear a Belize address, be active, and be recent (within the past three months).
• A utility bill for owners and directors residing abroad must be active and recent (within the past three months).
• If the owner/subscriber/shareholder/director does not have a utility bill in their name but is renting or residing with someone else, they must submit a copy of the rental agreement or a completed statutory declaration form from the landlord, signed by a Justice of the Peace; an ID from the landlord, and a copy of a utility bill in the landlord's name.

Required Business Documents:

• Certificate of Registration or Incorporation.
• Business Tax Certificate.
• General Sales Tax Certificate.
• Trade License Certificate.
• Tax Identification Number Letter.
• Original/certified copy of the Memorandum of Association.
• Original/certified copy of the Articles of Association.
• If the documents are not in English or Spanish, provide an original or certified translation.

Social Security contributions are made weekly but submitted to the Department with a monthly statement of contributions. The contribution is related to the weekly insurable earnings. A portion of the contribution is paid by the employer, and another portion is deducted from the employee's salary.

Frequently asked questions