A Belize International Business Company is formed under the 1990 Belize IBC Act and is considered one of the most modern and user friendly offshore jurisdictions available. A Belize IBC is an ideal corporate vehicle for international financial transactions, as the regulations and processes have been designed with the offshore investor in mind. Belize’s laws facilitate fast and effective incorporations and are the ideal jurisdiction for small, start-up international businesses.
There are a number of benefits attached to incorporating a Belize IBC.
These are listed below:
- The time scale of incorporating a Belize IBC very quick taking approximately 2 business days to incorporate an offshore company (appostille of Belize company incorporation documents takes up to 3 working days which follows the incorporation of an offshore company in Belize).
- Low cost of a Belize company incorporation (it is only US$930, including all government fees, a Belize company incorporation set with appostille, rubber stamp, first minutes and courier delivery) and maintenance (US$450 paid annually, including registered office, registered agent and government fees).
- Belize IBC’s offer a high degree of privacy. Belize will not disclose its banking or fiscal information to any foreign party. Client confidentiality is entrenched in business and corporate legislation. In terms of potential risk of information disclosure to foreign governments Belize is probably one of the securest and most confidential of offshore jurisdictions.
- No tax at all except for annual government fees (US$100), which has to be paid on time to keep a Belize offshore company registered.
- Belize IBC’s are free from any reporting requirements including annual audits.
- No requirement for a company secretary.
- A bank account can be open for an offshore company in Belize without Directors being present.
Tax and Accounting Regulations
A coherent offshore tax planning strategy is essential to maximize the effectiveness of offshore companies. Service Pro can assist by structuring the most tax efficient strategy to satisfy your requirements. Service Pro will guide you as to which jurisdictions offer the best tax structure by identifying the types of tax payable as well as applicable exemptions and incentives. Service Pro will provide tax planning advice that will identify which is the most favourable, tax efficient jurisdiction in which to incorporate.
The tax system of a Belize Offshore Company is relatively simple and straightforward. Essentially a Belize IBC is a completely tax free offshore company as long as it complies with the regulations set out in Article 5 of the Belize IBC Act. These include regulations such as not carrying out business with persons resident in Belize, not owning any real estate, not undertaking banking or insurance services and not providing registered office facilities for other IBC’s. All are easy requirements to fulfill.
Belize has steadily developed its offshore laws and has emerged as one of the most credible and safe offshore jurisdictions. It’s legal infrastructure has been designed to ensure the highest degree of privacy and asset protection.
Below is an overview of the tax and accounting regulations in Belize
Corporation Tax – According to the 1990 IBC Act Belize IBC’s are exempt from paying corporation tax
The following are all tax exempt:
- All dividends paid by the Belize IBC to a non-resident
- All interest, rent, royalties, compensations and other amounts paid to a non-resident of Belize
- All capital gains in respect to; shares, debt obligations or other securities of a company incorporated under the Belize IBC Act by persons who are non-resident
- No stamp duty on transactions
Government License Fee:
- A government license fee must be paid by all Belize IBC’s in order to operate. The annual cost is approximately US$100
International Aspects of Taxation:
Belize has agreed to sign a Legal Assistance Treaty with the US. It will share any information if it protects against money laundering and in order to combat international terrorism and the drug trade. Belize carries out due diligence through the KYC Process.
Double Taxation Treaty – Belize has a Double Taxation Treaty with the UK, Sweden, Denmark and the countries of the Caribbean Community (CARICOM)
Annual Reporting Requirements:
- No records or accounts are required to be submitted to the authorities.
- If the directors and shareholders wish to maintain these they may be held anywhere in the world.
Company Administration Guidelines
- The minimum paid in and issued in capital may be one share which is fully paid
- Shares may be issued with or without par value
- Shares may be issued in bearer form and transferable by delivery (adding to the confidentiality) and may be issued in any currency
- Shares may be paid up through the transfer
- Only one shareholder is required, does not need to be a local and can be an individual or corporate body
- A director and shareholder may be the same person
- May use a nominee to protect privacy
- Only one director required, does not need to be a local and can be an individual or a corporate body
- A director and shareholder may be the same person
- May use a nominee to protect privacy
Restrictions on Name & Activity:
- A Belize IBC is restricted from doing business with Belize residents or Belize Corporations
- The name of the company must contain one of the following; Limited, Ltd, Corporation, Incorporated, Society Anonyme
- A Belize IBC must have a registered office in Belize. Service Pro can provide a registered office
- Is permitted to maintain a staff and conduct business incidental to its existence if required but must actively engage in business in Belize
- There is no requirement for a secretary in Belize
- There is no requirement for shareholders and directors meetings
- The documents for Belize Offshore Incorporation do not carry the name or identity of the beneficial director or shareholder. The names of the beneficial owners do not appear on public record
- Nominee directors and shareholders are permitted to ensure confidentiality
- The approximate timescale for company incorporation is 5 days
Procedure of company formation
Incorporation of a Belize IBC is very efficient and can be completed within a matter of days. The International Business Companies Act (1990) provides the legal framework for the incorporation of a Belize IBC.
The summary below provides an overview of the process and the documents required.
- To form a Belize IBC an application form must be completed, signed and scanned containing information about a preferred name, details of directors and details of shareholders
- A beneficial owner declaration to be filled in, signed, scanned and sent to Service Pro
- A scanned copy of the passport for the directors and shareholders is required
- A scanned copy of proof of residence (utility bill, bank statement or bank reference not older than 3 month)
- At this point Service Pro will confirm the company name availability and issue an invoice
- Upon receipt of money Service Pro will start the Belize Company Incorporation Process. It takes approximately 5 working days to fully incorporate an offshore company in Belize and up to 5 working days for a courier delivery
- At the beginning of every year Service Pro will issue an annual invoice for US$400 to cover renewal fees
Shelf companies are ready made companies whose primary purpose is to bypass the lengthy registration or incorporation process that can be required when forming a business.
Certain jurisdictions may take from 3 business days up to 3 weeks for the whole incorporation process to be completed. Shelf companies can be up and running within 4 business days. In some cases banks, government projects and investors will not provide credit ratings, projects or be interested to invest in newly formed companies. This is where shelf companies offer invaluable creditworthiness as they are able to show company history.
Benefits of a shelf company include:
- Saving time involved in taking the steps to create a new company (such as filing corporate documentation).
- Shelf companies gain the opportunity to bid on contracts. Some jurisdictions require that a company has been trading for a certain length of time to have this ability.
- To show that the company has been up and running for some time in order to attract consumers or investors.
- Shelf companies can gain access to corporate credit.
- Clients generally trust companies that have been trading for a number of years.
- Usually, the older the company, the higher it's standing in the business community.
- Opening a bank account for a shelf company is generally a faster process.
Belize offshore trust becomes valuable, easy operational, subtle and creative means of asset protection, investment, tax and estate planning providing at the same time full confidentiality.
Main principle of Offshore Trust is to assign assets to a Trustee in an offshore jurisdiction. When the Offshore Trust is set up in Belize, Beneficiaries are exempted from paying local taxes on their incomes or assets of the Trust.
The structure of Trust is based on three basic elements:
- Settlor/Grantor – the creator of the Trust that can be an individual, a corporation or another legal entity. The Settlor creates a Trust by gifting or transferring title of assets which he owns into Trust with instructions that those assets should be held for the subsequent use, benefit and enjoyment of a third party (Beneficiary/s).
- Trustee – a person or corporate body appointed by the Settlor to manage Trust with a legal authority (for the profit of the Beneficiary/s)
- Beneficiary – a person who receives the benefits from money or property held in the trust.
Benefits of a Belize Offshore Trust:
- No wealth and inheritance taxes
- Financial stability
- Tax reduction and minimization
- Easy maintenance
- Excellent asset protection features
- Ability to minimize or eliminate estate and inheritance taxes due to the death of a Settlor
- Recognition in main common law jurisdictions
Major information about Belize Trusts
Under the Belize Trust Act a Belize Offshore Trust must be formed either by oral declaration or be written excluding any technical expressions or regulations. Non-charitable Trust can be created for a maximum period of 120 years and a Charitable Trust may be set up for an unlimited duration. There is a minimum requirement of one Trustee for a non-charitable trust and four – for a Charitable Trust.
The Trust Act states that a Belize Offshore Trust may but not obliged to be registered with Registry. However, an offshore Trust must be licensed by a special Commission in order to conduct international financial services.
The information about Trust is kept with the International Financial Services Commission and is strictly protected from public access unless the written permission of the Trustee is given.
Possible assets for a Belize Offshore Trust:
- life insurance policies issued on the life of the Settlor
- real property
- intellectual property
- investment portfolio