Belize is one of the most underrated jurisdictions in the Americas. It has a trustworthy, well-established banking business, fantastic trust, and foundation options for asset protection, tax optimization opportunities for foreigners, and offers a stable political and economic frame. A Belize company can improve your offshore business.
Belize is way more than sandy beaches, spicy sun, and crystalline water.
It offers terrific benefits for business people and investors.
It has one of the best tax regimes for foreigners in the Americas, with reduced business regulations and a good deal of anonymity. Still, it has a solid regulatory framework, especially for an offshore jurisdiction, and is a safe and stable place from which to create and run a business.
You may ask yourself: well, I’m not a touristic investor, why should I be interested in opening a business in Belize?
The answer is simple: the country has had the IBC (International Business Company) figure for years, which has been its star on corporate structures.
And the IBC is an entirely tax-free corporate structure in Belize.
What if you’re looking for something even less regulated? Well, you can still establish an LLC that can serve as an asset protection vehicle.
And we can help you with both in Privatus Maximus.
The International Business Company (IBC)
In December 2018, the National Assembly of Belize passed amendments of its IBC, Income and Business Tax, and Stamp Duties tax.
The law changed many features, meaning that today, IBCs can:
- Be incorporated by residents and non-residents
- Can conduct business locally and with Belizean residents
- They can own land in Belize
- They can hold shares in Belizean businesses
As usual, if IBCs in Belize don’t do business with local companies and individuals (the only exception is doing business with another IBC that doesn’t do business with local companies and individuals), the don’t pay any Belizean taxes. You read that right, IBCs are entirely tax-free in Belize.
You may also ask: well, what if IBCs do business with locals or other IBCs that also do business with locals? They must file a tax return and pay taxes in US Dollars. However, they pay microscopic taxes.
Still, their capital gains, dividends, and interests are tax-exempt, and payment to non-residents is exempt from withholding taxes, which means that if you are interested in dealing directly in Belize, you still may obtain significant benefits from doing so.
Yet, the IBC law is currently under review. This means taxes may increase to somewhere between 10 and 15% and there might be an increase over substance requirements.
The incorporation process is reasonably simple. The main requirement is having a registered office in Belize with a certain degree of physical operations (more on that ahead).
In general, they don’t have trading restrictions as most of their business is international. Until not so long ago, they were forbidden from trading with Belizean persons. However, as we explained, that has changed, and now they can do it as long as they file a tax return and pay a meager corporate tax rate.
The physical presence requirement also changed recently. It can be satisfied in the following manner:
- A sufficient number of qualified persons conducting the core income-generating activities of the company from Belize
- Expenditures harmonized with the size of the business
- Bookkeeping in Belize
- Control and management from Belize
However, pure equity holding companies are exempted from the physical presence provision.
IBCs are simple to incorporate, and practically any business can be incorporated as an IBC in Belize. The fact that they only require one director and one shareholder means that a sole trader can establish an IBC for tax optimization purposes.
The IBC is ideal for a wide array of businesses:
- Companies providing services or trading products with affiliates
- Holding companies
- Companies obtaining revenues from intellectual property
- Inheritance management
- IT companies
The process to establish an IBC in Belize is simple:
- You must choose a name for your company.
- Afterwards, you must complete the official documentation required for establishing the IBC. This includes details regarding shareholders and directors.
- Send a formal property statement with information that confirms your identity, address, and your ownership over the company (all documents must be notarized and translated).
- Once you submit all the documentation, you must pay the service fee, which depends on the size of the IBC, but it is quite fair.
- Wait for the confirmation of the registry. In general, it takes a bit more than 24 hours.
The Limited Liability Company (LLC)
As you may know, Belize has a variety of corporate structures:
- Private company
- Limited liability company
- Limited life company
- Joint venture and cooperative
- Sole proprietor
- Public investment company
- International business company
- Trust fund
The last two are the ones used the most by international investors. We have already discussed the IBC, and we talk about the trust fund in this fantastic article about the Belizean trusts.
However, we want to focus here on the Limited Liability Company (LLC). Why? Because this business structure is ideal for those that want to protect their assets without using funds or foundations.
Further, it will give you all the benefits you’d expect from a typical offshore corporate structure while the LLC law is not under review and will not likely be in the short term.
As you know, LLCs as a corporate structure originated in the US a while ago and are usually available in most offshore jurisdictions. However, Belize came somewhat late to the party, as its LLC legislation was finally established in 2011. Still, the Belizean laws provide incredible asset protection possibilities through LLC, which isn’t generally common in most jurisdictions.
LLCs are a hybrid between a corporation and a partnership. Corporations generally avoid unlimited personal liability of shareholders but lead to taxation over multiple levels of the earnings of the corporation. A limited liability partnership avoids multiple taxation but requires unlimited liability of at least one general partner.
LLCs, at the same time, avoid multiple-level taxation and limits the liability of its members only to the extent they’ve made to the company. The members of an LLC don’t have any personal responsibility for the company’s debts unless it has been previously arranged.
Part IV of the LLC Act provides most of the elements of asset protection:
- Only Belizean courts’ judgments are enforceable against LLC and its managers.
- Any creditor that wants to bring action against an LLC property must deposit an amount equal to half the amount claimed or $50k, whichever is greater. This protects LLCs as it imposes a severe financial burden on any person trying to bring action against the property of a Belize LLC.
- LLCs can be managed by their shareholders or by separate managers. If the LLC is managed by individuals located in a different place than the shareholders, its asset protection increases.
The law is frontally directed towards discouraging litigation against LLCs and protecting the company and its beneficiaries. However, you must know that International LLC has similar limitations that IBCs regarding doing business in Belize.
As with the IBC, LLCs are exempted from taxes, duties, and exchange control in Belize, excepting transfer of property in Belize and shares in local companies, which aren’t exempted from stamp duty.
Other corporate structures
However, you may actually do business in Belize, and not mainly from Belize, but internationally.
Belize has a ton of touristic and agro-industrial potential, and investors know that.
But you have to know that establishing such businesses in Belize takes a while longer. Opening a business that can operate in Belize and buy or sell products and services to citizens and local residents may take about six weeks. Still, the process is transparent, and the country has a developing, stable economy that can bring significant benefits for investors. It’s also a fantastic option for foreigners wishing to retire in Belize but still want to operate a small business.
The process has ten steps:
- Find a place for your business
- Verify the available names in the Business Registry
- Register the company statutes, memorandums, and articles of association
- Get a trade license. Its cost is linked to what you’re paying for the commercial space.
- Receive an inspection from the city council
- Get a working permit (unless you’re already a permanent resident)
- Open the corporate bank account
- Register on the Social Service
- Register for a tax identification number
- Register for the business and general sales tax
Why Belize? Six Reasons to Start a Business in Belize
Privacy to operate your business
This is one of the main drivers of foreign investors to Belize. The country respects individuals and corporate privacy. That means owners and board members don’t have to disclose their identity, and they can reserve the discloser of financial information such as profits, losses, and major transactions.
Setting up an offshore structure or a local business in Belize is cost-conscious. In particular, establishing an IBC or an International LLC is a fantastic possibility because of its affordability, especially when compared to other offshore jurisdictions. That means Belize is a good target for mid-level investors and business people, as they wouldn’t have to break the bank to achieve a fair level of asset protection and tax planning.
Top tax regime
Capital gains on any income, whether it is generated out of Belize or in Belize is entirely tax-exempt. All income generated outside of Belize is tax-free.
Furthermore, the participants of the QRP program don’t pay income tax or customs duties.
If you establish an IBC or an LLC in Belize, your company is fully tax-exempt in Belize, which is a fantastic tax planning opportunity as long as you comply with the physical presence requirements.
The LLC was established mainly for asset protection purposes. It protects the company and its shareholders from actions against the properties of the company. Individuals can manage them from a different jurisdiction than the shareholders, and only Belizean court judgments are enforceable against LLCs. All this means that Belizean International LLCs offer top asset protection for their beneficiaries and are a terrific option for those wanting to protect their assets without establishing trusts or foundations.
Fantastic for Americans
Belize is in Central America, which means it’s ideal for American investors and business people. Panama is probably the first jurisdiction on this side of the world that comes to your mind. However, Panama is generally a way more costly jurisdiction, and opening a bank account is fairly tougher than in Belize.
Furthermore, Panamanian banks and corporate services are somewhat restricted to Venezuelans and Cubans, even if they show they are legit business people and not linked with organized crime, which is a fallback of the sanctions imposed over their governments. That’s not the case with Belize. As long as you show you are legit, you can enjoy all the legal, economic, and tax benefits of establishing a corporate structure in Belize.
Terrific banking business
Banks in Belize are obliged to keep a 24 % liquidity ratio, which is way higher than in most countries. This helps the banking industry to be amazingly stable. This fact, the tax optimization opportunities, the banking secrecy, and the top services the country offers through different bank accounts and investment vehicles, make the banking industry in Belize one of the most underrated in the Americas.
Who are we, and what can we do for you?
Many financial experts have been forecasting the end of offshore services for decades.
And they’ve always gotten it wrong.
Yes, to be sure, in today’s world, there are lesser and lesser places where investors, high net worth individuals, and businesspeople can protect their assets and distribute dividends.
But there are still freedom havens such as Belize that gives you plenty of flexibility and asset protection possibilities.
And that’s where we come in.
In Privatus Maximus, we have 25 years helping our clients protect their assets.
Belize is one of our favorite jurisdictions. Quietly, it has created a legal and economic framework that is perfect for investors. A Belize company will take your tax planning strategy to the next level.
We can help you open an IBC, and international LLC, and a business that operates from Belize.
Want top-level tax planning? Let’s work with an IBC. Want the best asset protection? You have an international LLC. Want to reap amazing benefits from Belize’s touristic and agro-industrial potential? We can help you open a company in Belize!
In all this time, we’ve built an unparalleled network of experts and partners. Aside from helping you open and operate your business in Belize, we can also help you open a bank account with the top offshore bank in Belize.
Do you want to know more about our banking services? Check our banking article right here!
Whatever your priorities are, in Privatus Maximus, we can help you open a business in Belize, and we have the experience and connections to do so swiftly and without problems for you.