Belize: The Business Haven

Belize is a popular destination for expats looking to set up a business, with its tropical climate, laid-back lifestyle, and English-speaking locals. It is a developing nation with many opportunities, and the government offers incentives to businesses that create jobs for local people and contribute to the economy. However, it is not without its challenges. While it is relatively easy to register a business name and incorporate a company, obtaining the necessary permits and licenses can take time, and the overall economy is small. Here is a brief overview of the advantages and disadvantages of starting a business in Belize.

Foreigners are facilitated by the government

Belize is a developing nation with a great many opportunities for foreigners looking to start a business. The government is keen to welcome and facilitate foreign investors who help develop the country's infrastructure and create jobs for Belizeans. Here are some of the ways in which the government facilitates foreigners:

Pro-Business Environment

Belize has a pro-business environment with a variety of investment incentives. The country is committed to promoting investment and offers multiple incentive programs, including the Fiscal Incentives Act, the International Business and Public Companies Act, the Export Processing Zone Act, and the Commercial Free Zone Act. These programs aim to attract foreign investment and make it easier for businesses to operate in the country.

Easy Registration Process

Registering a business in Belize is a straightforward process and can be completed in one day. The necessary documents include a valid Social Security card for all owners/partners and a small fee of $25. The registration can be done at the Companies & Corporate Affairs Registry in Belmopan, making it convenient and accessible for foreigners looking to start a business.

Trade License Acquisition

Obtaining a trade license is a crucial step for anyone looking to exchange goods or services for money in Belize. The process is straightforward and can be done at the Town Board or City Council. The annual fee for the trade license is determined by the rental value of the space occupied by the business, typically calculated at 25% of the annual rent.

Work Permits

Foreigners seeking to work and do business in Belize will need a work permit. While the process can be complicated and tedious, the government offers clear guidelines and requirements. By seeking legal advice and meeting the necessary criteria, foreigners can obtain the required work permits to operate their businesses.

Tax Benefits

Belize offers tax benefits to foreign investors, such as the Foreign Earned Income Exclusion (FEIE). This allows Americans to earn up to $112,000 tax-free in Belize, while nationals of other countries may enjoy even higher tax-free income. Additionally, Belize does not tax people on foreign earnings, making it attractive for online businesses or digital nomads.

Residency Opportunities

Belize offers residency permits to foreigners who invest in the country or start a business. This is a significant advantage for those looking to make Belize their second home or enjoy retirement in the country. The process involves spending 50 out of 52 weeks in the country and then applying for residency, which can take up to a year to process.

In summary, the Belizean government actively facilitates foreigners looking to start a business in the country. With a pro-business environment, easy registration processes, work permit opportunities, tax benefits, and residency incentives, Belize presents a range of advantages for foreign investors seeking to contribute to the local economy and create jobs for Belizeans.

Off-shore business exemptions

Belize is a well-established offshore banking jurisdiction, but businesses operating in Belize cannot usually benefit from these tax-free structures. A business operating in Belize is onshore and subject to a myriad of taxes and fees. However, any business in any country can be legally structured to derive benefits from two or more jurisdictions – one or more of which can be an offshore entity.

Belize offers multiple incentive programs aimed at promoting investment in the country. These include 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. The amendment is seen as a way to grant development concessions to flagship investments in a more transparent manner.

Among the various programs available, the Export Processing Zone Act, the Commercial Free Zone Act, and the Fiscal Incentives Act are particularly relevant for individuals considering starting a business in Belize.

Small businesses are ruling

Small businesses are the lifeblood of any community, and their impact extends far beyond their modest size. From boosting the local economy to fostering a sense of community, small businesses are the backbone of society.

Local Economy

Small businesses contribute significantly to the local economy. They generate revenue that is then funnelled back into the community through taxes, supporting essential services such as schools and police forces. Additionally, they create local job opportunities, reducing unemployment rates and promoting financial stability for residents.

Community Building

Small businesses often become integral to the fabric of a community. They reflect the unique character of the area and build connections with their customers, creating a sense of familiarity and camaraderie. This sense of community is further strengthened by the involvement of small businesses in local events, fundraisers, and sponsorships, fostering a sense of collective identity.

Innovation and Diversity

Small businesses are known for their innovation and diversity. They offer fresh and unique products that cater to niche markets, filling gaps left by larger retailers. This diversity of products and services contributes to a vibrant and dynamic local economy.

Customer Experience

Small businesses excel at providing personalised customer experiences. The owners and staff are often present and engaged, creating a welcoming atmosphere. Customers appreciate the extra touches, such as remembering a regular customer's order or going the extra mile to accommodate special requests.

Agility and Adaptability

Small businesses are often more agile and adaptable than their larger counterparts. They can quickly respond to market demands and make strategic decisions without the bureaucracy and red tape associated with larger corporations. This agility allows them to stay competitive and meet the evolving needs of their customers.

Building Owner Wealth

Small businesses are a great way for individuals to build wealth and achieve financial independence. They provide an opportunity to turn a passion into a profitable venture, offering a sense of fulfilment and autonomy that is hard to replicate in a traditional corporate job.

In conclusion, small businesses play a pivotal role in shaping communities and economies. Their impact extends far beyond their size, and they are an essential component of a thriving society. By supporting small businesses, we invest in the well-being and prosperity of our local communities.

Enjoy tax-free income

Belize is a tax haven, allowing individuals and corporations to 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 has established itself as a tax haven by implementing legislation that includes the International Business Companies Act, the Trusts Act, and the Offshore Banking Act. These laws have made it simple to incorporate offshore companies, providing individuals and companies with the ability to manage their assets and protect their earnings from abroad from taxation.

The country's tax-free status extends to estates, which are exempt from taxes related to inheritance, succession, and gifting. Additionally, Belize has few tax treaties with other governments, further enhancing financial privacy protections.

U.S. residents, however, must still report their earnings to the IRS unless their company solely conducts business in Belize. The Foreign Income Tax Exclusion shields up to a certain amount of offshore earned income for those who qualify. For example, in 2021, individuals living in Belize and away from the U.S. for 330 days within a consecutive 12-month period may have been able to qualify for an exclusion of up to $108,700 of their income.

Belize's tax system also includes a General Sales Tax (GST) of 12.5% on goods and services, and a Business Tax for companies earning over BZ$75,000 annually. While there is an income tax of 25%, residents of Belize enjoy an exemption on the first $14,500 of their annual income, and pension income is also exempt.

In summary, Belize's tax laws provide numerous opportunities for tax-free income, making it an attractive destination for those seeking to reduce their tax liabilities.

Investment leads to residence

Belize is a great place to start a business, especially for expats. However, it is not a straightforward process. There are many bureaucratic hurdles to overcome, and the pace of starting a business is slow. Nevertheless, with high-speed internet, lower wage costs, and growing tourism numbers, there are business opportunities to be found.

Belize offers multiple incentive programs to promote investment in the country. These include the Fiscal Incentives Act, the International Business and Public Companies Act, the Export Processing Zone Act, and the Commercial Free Zone Act.

The Belize government welcomes investors who can contribute to the economy and provide jobs, particularly in tourism, agriculture, and manufacturing. However, it is rarely simple or easy to do business in Belize.

To obtain a temporary residence permit, foreign business owners need to invest a minimum of 500,000 Belize dollars (approximately US$250,000) in the country. This permit is valid for one year and can be renewed. After one year of permanent residency, investors can apply for citizenship, which is typically granted after five years.

There is no specific citizenship by investment scheme in Belize, but there are several types of residence permits that enable foreign business owners to naturalize. These include the long-term residence permit, the temporary residence permit for employment, and the dependent residence permit.

The long-term residence permit is for those intending to stay in Belize for more than three months. Applicants must be nationals or residents of Canada, the United States, the United Kingdom, or the European Union, or have a minimum yearly income of US$75,000-100,000.

The temporary residence permit for employment is for those who plan to stay in Belize for up to six months. This is similar to a digital nomad visa in other countries.

The dependent residence permit is for retired people aged 55 or above and children under five years old.

The Qualified Retired Person Incentive Program (QRP) is another option for residency in Belize. This program is dedicated to people aged 45 or above, with a minimum monthly income of US$2,000, and requires a minimum of US$24,000 to be deposited in a Belize bank account. QRP members are granted a one-year residence permit and are exempt from duties and taxes on income from sources outside Belize.

To summarize, while there is no direct citizenship by investment program in Belize, foreign investors can obtain residency by investing a minimum of 500,000 Belize dollars. After one year of permanent residency, investors can apply for citizenship, which typically takes an additional five years to obtain.

Frequently asked questions