Commercial Free Zone
To attract foreign investment, a Commercial Free Zone (CFZ) was established under the Commercial Free Zone Act 1994 at Corozal.
CFZ serves to provide facilities for different activities such as manufacturing, processing, warehousing, packaging and distribution of goods and services. Businesses established in CFZ have no foreign exchange restrictions. These businesses receive various other benefits that include duty exemptions and tax holidays.
Goods and supplies that enter and leave the Zone for commercial purposes are exempt from import or export duties, stamp duties, quotas and revenue replacement duties.
Income tax is normally charged at between 2% and 8% on CFZ businesses. However, these rates can be reduced by up to 2% through tax credits that businessmen can earn by means of employing Belizean workers.
Companies in the CFZ have the following benefits and exemptions:
- no restrictions on foreign exchange out of or within a CFZ (the sale of foreign currency or the transfer of foreign exchange includingly);
- no Government charges and taxes on foreign currency use within a Commercial Free Zone;
- possibility to open an account in any currency with a duly registered bank of CFZ business choice located in the CFZ;
- all merchandise, articles and goods that enter a Commercial Free Zone for commercial purposes are exempt from import duties, stamp duties as well as revenue replacement duties;
- all fuel and goods (like buildings materials, equipment, furniture, supplies, etc.) needed for the functioning of a CFZ business are exempt from all duties and taxes;
- NB: A "Social Fee": 1.5% is charged on all goods and services imported into the CFZ, except for fuel; the fee on fuel: 10%;
- no quotas for imports or exports;
- no import or export license is required for imports or exports;
- imports and exports are exempt from all custom duties, consumption taxes, excise taxes, and export duties (with just some exceptions).
During the first 5 years of its existence, a Commercial Free Zone business is exempt from income tax or capital gains tax or any new corporate tax levied by the Government of Belize as well as any dividends paid by this business are exempt from tax for the first 20 years of its operation.
The loss incurred over the 5 years´ tax holiday by a CFZ business may be carried forward and deducted against profits in the 3 years after the tax holiday period.
Also, any proceeds from the sale of stock or other ownership interest in a Commercial Free Zone business are exempt from the above-mentioned tax.