Belize Business Company (BC)
The Belize Business Company (BC), formerly known as Belize IBC, offers a wide range of advantages to foreign investors looking to establish a new business venture, including tax advantages, ease of registration, confidentiality, and access to stable economy and a strategic location.
One of the main benefits of registering a Belize Business Company is its friendly tax regime. Typical applicable tax rate for standard trading business is only 1.75%. Pure equity holding companies and holding companies that do not engage in active trade or business and have no relevant activities for the purpose of Economic Substance Act, can enjoy a 0% tax rate.
The requirement for Belize BC to obtain Tax Identification Number (TIN) provides credibility and legitimacy for Belize Business Company. While serving as a unique identifier for businesses within Belize’s tax system, TIN number opens access to financial services. For bank account opening purposes, TIN number is often a part of due diligence procedures.
Other advantages of a Belize BC include a straightforward registration process, minimal reporting and record-keeping requirements, confidentiality of shareholder and director information, and the ability to conduct business in multiple currencies.
The flexible corporate legislation of Belize BC allows for engagement in variety of global business activities, as such Belize BC is a vehicle suitable for international financial transactions, being especially designed with the offshore investor in mind. Belize´s laws facilitate fast and simple incorporation, and its modern and computerized BC Registry is capable to process a company registration within one to two days.
A full text of the Belize Companies Act, 2022 is available in our Downloads section.
BELIZE - ADVANTAGES OF THE JURISDICTION
These are some of the general advantages of Belize as an offshore tax shelter jurisdiction:
Belize has an outstanding record of peace, democracy and stability. Belize is a member of the British Commonwealth, the United Nations and the Non Aligned-Movement. The legal and judiciary system of Belize is based on the English Common Law. The country has not been involved into any conflicts or civil disturbances, unlike some other countries in the region.
Unlike most other offshore tax havens, Belize is not an island and has a fairly robust and diversified national economy. At the same time, offshore services industry contributes significantly to the country`s earnings. Therefore, there is a wide support among the government and the general public to further develop Belize as a premier offshore financial centre. Belize is one of the only two countries in Central and South America having English as the official language.
Belize is easily accessible by sea and air, has modern telecommunications. It`s time-zone location (1 hour behind Eastern Standard Time) make it particularly convenient for communications from the whole of the American continent.
Belize provides one the fastest BC incorporations in the world. Usual Belize Business Company incorporation takes one to two days. This is due to the highly-efficient, computerised registration system introduced by the Online Business Registry System (OBRS) of Belize.
A fixed Government license fee
For all its incredible fiscal benefits, a Belize Business Company must pay a fixed annual fee to the Belize Government. For most Belize Business Companies, this Government fee stands at $ 250 per year.
The actual amount of the Government fee depends on the amount and type of the authorized capital of the Belize BC, as follows:
For a Belize BC whose authorised capital does not exceed $50,000 with all shares having a par value, the annual Government fee is $150 for the first year and $250 from the second year on.
For a Belize BC whose authorised capital exceeds $50,000 with all shares having a par value, the annual Government fee is $1000.
For a Belize BC where some or all of its shares have no par value, the annual Government fee is $350.
These Belize BC license fees are very competitive, in particular as compared to some other more prominent offshore financial centres in the Caribbean. For instance, in two other specifically popular offshore tax havens the minimum IBC license fees are $ 400 in the Bahamas and $ 550 in the British Virgin Islands.
(!) In addition to the Government license fee, certain professional fees are normally payable for company administration services as provided by the Registered Agent. These fees are identified in our list of fees and charges.
A Belize International Business Company is for all legal purposes a separate legal person, and possesses the same commercial rights and powers as a natural person.
At registration, no information is filed on public record on the company beneficial owners, directors and shareholders. This information remains only known to the licensed Registered Agent, who is bound by the law to keep it completely confidential. The internal corporate records of the Belize BC as the Registry of Members, Registry of Directors and the Corporate Minutes and Resolutions, are all kept by the Registered Agent and are also confidential.
The only documents of a Belize BC held on public record are the Memorandum and the Articles of Association. These documents do not contain any indication as to the actual beneficial owners, directors or controllers of the company.
All that being said, your offshore venture must never be based on secrecy. It must not rely on blind assumption of total secrecy. Your business must always be based on legality and must be able to withstand legal scrutiny even if fully disclosed.
As any other civilized country, Belize aims to fight international crime and fraud. It is part to multi-national information-sharing agreements and it does co-operate with other countries. Information disclosure in Belize follows strict procedures determined by Mutual Legal Assistance Treaties, only limited amount of information is disclosed and NO information is disclosed to the countries that are not part of such agreements with Belize. There are three types of agreements which may be basis for the information disclosure:
- Belize has signed Tax Information Exchange Agreements. These are in force with Australia, Belgium, Denmark, Faroe Islands, Finland, France, Greenland, Island, India, Ireland, Mexico, Netherlands, Norway, South Africa, Switzerland, Trinidad and Tobago, United Kingdom. Only specific limited information can be disclosed. The information sharing process is a complicated procedure where the requesting country must identify the person and demonstrate realistic grounds for believing that the identified person has taxable assets in Belize. No information is disclosed based on mere suspicions of tax evasion. The disclosed information will not exceed the requested. It means that Belize can only confirm the information that the tax authority of the other country already has in its possession and will not provide any additional information.
- Double Taxation Agreements are in force with the following countries: Antigua and Barbuda, Austria, Barbados, Dominica, Grenada, Guyana, Jamaica, St.Kitts and Nevis, St.Lucia, St.Vincent and the Grenadines, Switzerland, United Kingdom.
- The banks of Belize share the financial information of their account holders according to FATCA and CRS (from 2018) procedures only to the US and the countries that are committed to AEOI (Automatic Exchange of Information).
While these arrangements may appear extensive, the reality is that at this time and age all countries of the world do share tax information, bank information and corporate information, and this information sharing will only become more automatic and more widespread. Countries which still attempt to promote and market “secrecy” are very rapidly shut out of international finance, blacklisted and effectively banned from operating in the modern world. Incorporation of a business in a low-tax, low-burden environment such as in Belize has many advantages, but “total secrecy” will not be one of them. You should never rely on that.
Provisions against confiscation
Where a foreign governmental authority, by means of expropriation, confiscation, coercion, force or duress or similar action; or by means of any confiscatory tax, assessment or other governmental charge, takes or seizes any shares or interest in a Belize Business Company, the company may apply to the court in Belize for a court decision ordering the company to disregard the attempted seizure and continue to respect the rights of the shareholder of the Belize BC. In particular, the Belize court may appoint a third-party trustee to hold the shares in the disputed company.
Minimum capital requirements
A Belize BC does not have any minimum paid-up capital requirement. Any amount of authorized capital can be stated in the incorporation documents of the BC, as desired by the owners. (Authorized capital is a notional amount of capital which the company may receive from its shareholders in consideration for the company shares.) The amount of the authorized capital can be freely determined at incorporation by the owners of the BC and there are no mandatory timeframes as to when such capital must be paid up by the shareholders – however, there is a requirement that at their issue, the shares in an BC must be paid up. All in all, the capital structure of a Belize BC can be extremely flexible and can accommodate all variety of business circumstances and needs.
The capital of a Belize BC may be expressed in any currency. The most popular currency of capital for a Belize BC is US dollar.
The amount of the fixed annual Government fee, payable by a Belize BC, depends on the amount of the stated authorized capital of the BC. The “optimum” amount of authorized capital is $50`000 for an BC with all shares having a par value. This is usually the standard amount of authorized capital stated for new BC incorporations. However, the owners may certainly designate any other amount of authorized capital for their BC – be it one dollar or a hundred million dollars.
For those BC’s, whose authorized capital is more than $50`000 (from there, it can be any figure), the annual Government fee jumps tenfold to $1000. For a Belize BC where the exact face values of its shares are not determined (“no par value shares”) the fixed Government fee is $350.
Out of the authorized capital, there is no requirement as to the minimum amount of shares or capital that must actually be issued and paid-up. A Belize BC, if its owners so decide, may only issue a fraction of its authorized capital, in which case the remaining amount of its authorized capital may remain unissued or “on paper” for an indefinite period of time.
Flexible corporate structure
A Belize BC may have a minimum of one shareholder, one director, both of whom may be the same person. There is no requirement to have any Belize-resident directors or shareholders. Foreign individuals or corporations may hold shares in a Belize BC or act as its directors. Corporate directorship (the directors` function in a company executed by another company) is expressly allowed.
Apart from the director, the company is not obliged to appoint any other officers, however it may certainly do so, if needed.
The shareholder`s or director`s meetings need not be held in the Belize and there is no requirement for a regular Annual General Meeting. If necessary, meetings of the board of directors, or shareholders, of a Belize BC may be held by telephone or other electronic means. Directors, as well as shareholders, may vote by proxy.
The directors of a Belize BC may appoint any officers or agents to represent the Company. Subject to the Memorandum and Articles of Association of the BC, such agent has such powers and authority as the directors may prescribe, except that no agent shall have no authority to amend the Memorandum or Articles of the BC; to appoint directors or agents; to approve a plan of merger, consolidation or arrangement; or to make a declaration of solvency or approve a liquidation plan for the BC.
The internal corporate structure of the Belize Business Company can be designed in accordance with the widest variety of requirements. It may be well designed to suit an one-man business operation, or to accommodate a complex, multiple-shareholder structure with an elaborate system of internal controls and management systems.
A Belize BC may issue registered shares which may be designated into classes as voting shares, non-voting shares, shares having more or less than one vote per share, shares that may be voted only on certain matters or upon the occurrence of certain events, shares that may be voted only when held by persons who meet specified requirements, no par value shares, common shares, preferred shares, redeemable shares and shares that entitle participation only in certain assets. The Business Companies of Belize are prohibited to issue bearer shares.
Minimum requirements to books and records
According to the Accounting Records (Maintenance) Act, revised edition 2020, every entity shall keep its accounting records within Belize at its registered office or at the office of its registered agent in Belize, or at such other place within or outside Belize as may be determined by its directors or other competent persons provided that where the accounting records of an entity are kept outside Belize, such entity shall provide its registered agent in Belize, with a written record of the physical address of the place(s) where the accounting records are kept.
“Accounting records” include financial statements, general and subsidiary ledgers, sales slips, contracts and invoices, and records and documentation relating to – (a) an entity’s assets and liabilities, (b) all sums of money received and expended and the matters in respect of which the receipt and expenditure take place, (c) all sales and purchases, and (d) all financial transactions.
In practice it means that the Business Companies registered in Belize are required to keep all the documents that show and explain the transactions of the company so that the financial position of the company can be determined at any time. These records do not have to be kept in Belize, the location for keeping such records can be determined by the owners of the Belize BC by signing a document that indicates the address where the records are kept.
Belize annual business tax return requirements and payment of taxes
Pursuant to the Belize Income and Business Tax Act Chapter 55 (IBTA), revised edition 2011, all Belize BC’s are required to file annual tax return.
Belize BC’s are subject to tax on all “receipts” (all revenues whether in cash or any kind, or whether received or accrued without any deduction), whether received in Belize or outside, therefore Belize BC’s are required to file Annual Business Tax Returns, even the BC’s that benefit form 0% tax rate (pure equity holding companies and holding companies not engaged in active trade or business or in any of the relevant activities for the purpose of the Economic Substance Act, even when the estimated tax due is nil.
- All Belize BC’s must obtain a Tax Identification Number (TIN), which we provide upon incorporation. Please feel free to download Belize Tax Registration Form, for your information.
- All Belize BC’s must file Annual Business Tax Return (BTS 290) with the Belize Tax Service Department. Along with the tax return all BC’s will be required to submit internally generated Financial Statements. (BTS requires BC’s with receipts of at least 6 million US dollars or companies in accordance with Section 32A (1) of the Income and Business Tax (Amendment) Act, 2018, to submit financial statements audited in accordance with the International Financial Reporting Standards (IFRS). For more information refer to the Guide to the Completion of the International Business Company Annual Business Tax Form.
- Non-included entities that are tax residents in other jurisdiction will be required to file Annual Information Return Form (AIR, BTS 1501 form). After initial, AIR Form will need to be filed annually, only if there is a change in circumstances, that is, a change of status.
Statutory annual tax filing deadline is 31 March, unless otherwise approved by the Director General of BTS. Each company has between January to 31st of March to report on its tax filing for the preceding fiscal year from January to December 31st.
Tax rates for Belize BC’s apply as per the ninth schedule of the Income and Business Tax Act, as amended. Guidelines and tax rates can be found in the Belize Business and Income Tax Guide.
Taxable threshold applies where BC has only one source of income. Thresholds as follows:
- Trade and Business – BZ $ 75,000
- Professional Services – BZ $20,000
- Rental Receipts – BZ $9,600
Penalties and interest charges for not complying with the filing requirements and payment deadlines are as follows:
- Late or non-filing: 10% of the tax due for every month or part of the month that the return remains outstanding, minimum of BZ $10.00. For maximum of 24 months.
- Late or non-payment: 1.5% interest per month on all unpaid balance from the time it was due up to the date of payment.
Exemption from Belize business tax is granted to the BC’s that satisfy all of the below requirements and such can apply for Tax Exemption Certificate:
- The company is a non-included entity pursuant to the Economic Substance Act.
- The company must be in good standing with the Belize Companies and Corporate Affairs Registry (BCCAR).
- The company is tax resident in another jurisdiction other than a blacklisted jurisdiction.
- The business entity has no central management and control of the Company in Belize.
- The business entity has no permanent establishment or relevant activities in Belize.
- The business entity has no UBO’s resident in Belize.
- The business company has met the conditions under Section 106 of the Income and Business Tax (Amendment) Act, 2019 (No. 25 of 2019).
- The company has obtained a TIN number in Belize from the BTS.
BELIZE ECONOMIC SUBSTANCE REQUIREMENTS
All Belize entities are required to prepare, report and file economic substance declaration about their business annually. The ESA Requirements were introduced in 2019 the Belize with the Economic Substance Act, (revised edition 2020).
Relevant activities include:
- Banking Business
- Distribution and Service Centre Business
- Insurance Business
- Fund Management Business
- Finance and Leasing Business
- Headquarters Business
- Shipping Business
- Holding Business (holding company, engaged, or where one or more of its subsidiaries is engaged in one of the activities listed above)
- all Regulated Entities under the FSC Act
All Belize Companies conducting business in the scope of relevant activity or not (both – included and non-included entities) must submit a fully completed, dated and signed ESA Declaration form to us via email annually within 9 months of the Company’s financial year end.
Included Entity in Belize is required to meet economic substance two main requirements: company must be undertaking core income-generating activities (CIGA) and the company must demonstrate substantial economic presence in Belize.
CIGA: The Act provides a list of the core income generating activities that an included entity undertaking such relevant activity may carry on. The Act identifies certain activities that may qualify as CIGA. The assessment of whether the entity meets the substance requirement in Belize will include a careful analysis of which CIGA elements the included entity is conducting in Belize. The following criteria will be considered:
- Amounts of annual operating expenditure;
- Number of qualified full-time employees; and
- Physical offices;
SUBSTANTIAL ECONOMIC PRESENCE: An included entity must demonstrate substantial economic presence in Belize (s.8 of the Economic Substance Act), by following criteria relating to Board management and control:
(a) An adequate number of meetings of the Board of Directors are conducted in Belize;
(b) There is a quorum of the Board of Directors present for meetings in Belize;
(c) Strategic decisions of the included entity made at the meetings specified
inparagraph (a) must be recorded in the minutes of the meetings;
(d) All records and minutes of the included entity are kept in Belize; and
(e) The Board of Directors has the necessary knowledge and expertise to discharge its duties.
REDUCED SUBSTANCE REQUIREMENTS FOR PURE EQUITY HOLDING COMPANIES:
- the company must comply with all applicable laws and regulations of Belize; and
- the company must have adequate human resources and premises in Belize for holding equity participation in other entities and where it manages those equity participations in other entities, have adequate human resources and premises in Belize for carrying out the management.
For the purposes of the Act, the meaning of “adequate” is: “as much or as good as necessary and sufficient for a specific need or requirement”.
Name requirements for Belize BC's
A Belize BC may not be registered under a name that is identical to the name of an existing Belize company. The registration of a new BC in Belize may also be refused if its name so nearly resembles the name of another company as to be calculated to deceive, except where the other company gives its express consent.
The name of a Belize BC may not contain the words “Building Society”, “Chamber of Commerce”, “Chartered”, “Cooperative”, “Imperial”, “Municipal”, “Royal”, or any word conveying a similar meaning, or any other word that, in the opinion of the Registrar, suggests or is calculated to suggest the patronage of Her Majesty Queen of England or that of a member of the British Royal Family. Similarly, the name of a Belize BC must not suggest any connection with the Government of Belize or any of its departments.
A Belize BC may not register the name containing the words “Assurance”, “Bank”, “Insurance” or “Trust”, or any or their derivatives or cognate expressions, unless it is specifically licensed in Belize to carry on the respective business or activities, as designated by such word.
Generally, the Registrar of Companies may refuse the registration of any particular name of a Belize BC if, in the opinion of the Registrar, such name is indecent, offensive or, in the opinion of the Registrar is otherwise objectionable. There is a general provision in the Belize BC Act allowing the Registrar to deny registration of any such “undesirable” name at the Registars` discretion.
The name of a Belize BC must be registered in Roman script, but an alternative name in any other script may be registered, if it represents an accurate translation of the name registered in Roman script.
The name-endings denoting the type of company
The name of the Belize BC must contain any of the words “Limited”, “Corporation”, “Incorporated”, “Société Anonyme” or “Sociedad Anonima” or “Aktiengesellschaft” or the abbreviations “Ltd.”, “Corp.”, “Inc.” or “S.A.” or “A.S.” or “A.G.” A company may use and may be legally designated by either the full or the abbreviated form of these limited liability designations.
MAIN CHARACTERISTICS OF THE BELIZE BUSINESS COMPANY
|Factor||With physical presence||No physical presence|
|Tax resident in Belize||Yes||No, if tax residency obtained in other jurisdiction|
|Residency and property ownership||Not restricted||Not restricted|
|Subject to Income and/or Business Tax||Yes||Subject to tax if income/receipts sourced from Belize, otherwise no subject to tax|
|Stamp duty||No, unless IBC owns property in Belize other than shares in another IBC||No, unless IBC owns property in Belize other than shares in another IBC|
|Conduct business internationally||Yes||Yes|
|Conduct business within Belize||Yes||No|
|Formally considered as tax-resident in Belize||Yes||No, if tax residency obtained in another jurisdiction|
|Physical presence||Mandatory for licensees of the Financial Service Commission (FSC)||Optional for others not having an FSC license|
|Official language/language of documents||English||English|
|Operational objects||Anything that is not expressly prohibited by law||Anything that is not expressly prohibited by law|
|Minimum authorized capital||No minimum required||No minimum required|
|Optimum authorized capital (minimum state duty)||$ 50’000||$ 50’000|
|Minimum paid-up capital||No minimum required||No minimum required|
|Capital currency||USD. With operational activities conducted in Belize subject to BZD||Any. USD is standard.|
|Exchange control permit||Yes||No|
|Registered Agent in Belize||Required||Required|
|Registered Address in Belize||Required||Required|
|Minimum number of directors||Two, resident in Belize||One|
|Register of Directors||To be kept by the Registered Agent||To be kept by the Registered Agent|
|Register of Directors filed for public record||No||No|
|Minimum number of Members (shareholders)||One, no restrictions||One, no restrictions|
|Register of Members filed for public record||No||No|
|Holding of Annual General Meeting||Yes||Not mandatory|
|Convention of Meetings of Directors/Members||Anywhere in the world, also by proxy||Anywhere in the world, also by proxy|
|Imprint of Corporate Seal||To be kept by the Registered Agent||To be kept by the Registered Agent|
|Corporate Minutes and Resolutions||To be kept by the Registered Agent||To be kept by the Registered Agent|
|Disclosure of beneficial owners to Registrar||No||No|
|Disclosure of beneficial owners to Agent||Yes (confidential due diligence)||Yes (confidential due diligence)|
|Filing requirement||File annual tax return, pay monthly business tax||File annual tax return if tax resident in Belize. If tax resident in other jurisdiction – file Annual Information Return Form|
|Audit requirements||Yes||May be required by the Commissioner of Income Tax if annual receipts are at least $ 6.000.000|
|Certificate of Good Standing (CGS) requires tax compliance||Yes||Yes|
|Redomicile a foreign company into Belize||Yes||Yes|
|Redomicile a Belize company abroad||Yes||Yes|
|Net time to incorporate||1-4 days||1-4 days|
|Ready-made (shelf) companies||Not Available||Not Available|
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