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Belize Company Formation
- Offshore Company Formation
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double taxation agreements
(DTA) |
NO |
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Corporate
tax Offshore Companies |
NO |
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Corporate
tax Onshore Companies
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Yes, No
for job creation
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tax free receipt of foreign dividends |
Yes |
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EU Parent-Subsidiary Directive applicable |
No |
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Holding company privileges |
Yes |
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Banking secrecy |
High |
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Nominee relationships allowed |
Yes |
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 Belize is a Central South American Country
which borders the Caribbean Sea between Guatemala and Mexico. Formerly
known as The British Honduras the official name was changed to Belize in
1973 with full independence granted within the Commonwealth on 21
September 1981, although this was not accepted by Guatemala until 1992
because of its historical disputes over the territory with the United
Kingdom.
As with many former British colonies, Belize has adopted English law and
its traditions and models for business formations, which take the form of:
sole proprietor, partnerships, limited liability partnerships, Trust
Funds, private companies, limited life companies, investment companies,
Joint Venture and Cooperatives partnerships and International Business
Companies (IBC).
Services provided by our Law Firm – or our Partner Network:
-Formation of
the company, Apostille, upon request certified translation of the
formation documents
-Certificate of Incorporation:
The certificate of incorporation is an official document that confirms
the name of a registered company, as well as the registration number.
-Certificate
of Good Standing
-Ranging from
Registered Office to maintaining a business office
- Upon request:
Nominee Director (attorney acts as a trustee and acts as the Director of
the company during the formation phase) and / or Nominee Shareholder
(natural person or legal entity – Law firm acts as a trustee in the form
of the shareholder of the company)
- Upon
request:
Permanent Nominee Director (Attorney acts
as trustee in the capacity of Director of the company during the entire
term of the agreement)
Clarification:
A production site, a site for the exploitation of mineral
resources or construction works whose duration is greater than 12 months
always constitutes the establishment of a place of business in the
country of the company's seat
(for
example: Belize, BVI, Cayman Islands, Nevis etc….), independent „of the
place of managerial supervision” (analogous to Article 5 OECD_Model
Convention). Otherwise the taxable permanent establishment is defined
via the „place of managerial supervision”.
As a rule this implies, that a person who
maintains his ordinary residence in the country of the company's seat
must act as the Director of the company.
Either the client or an agent relocates his ordinary residence to the
country of the company’s seat and he, himself, acts as the Director of
the company or our Law Firm in the country of the company’s seat
provides a Nominee Director.
Alternative: For example: The Danish client / founder acts as the
Director of the company and establishes credibility that he is present
in the country of the company’s seat within the course of carrying out
the required managerial supervision. Due to the fact that as a rule tax
havens (Belize, BVI Cayman Islands, Nevis etc…) do not maintain a public
commercial register, the installation of a “Nominee Director in the
formation phase” is possible and not necessarily a "permanently present
Nominee Director”.
- Upon request:
Bearer shares
- Upon request:
Liechtenstein Institute as the shareholder of the company
Clarification:
The shareholder or the shareholders are the „Owner”
of the company. It can be individuals or companies.
Bearer shares, nominee shareholder or for
example a Liechtenstein Institute as a shareholder serve to conceal the
true ownership relationships.
Which constellation is best suited, is
dependent upon different prerequisites. We would welcome the opportunity
to discuss this with you in a personal setting.
- Opening of an
account in the name of the company, incl. Online banking and VisaCard
(in the case of bearer shares the opening of an account is often only
possible, if the client / founder is not present at the opening of the
account)
- Upon request:
Investment account in Switzerland (Minimum deposit 10,000 CHF)
- To the extent
it is a requirement of domestic law: Provision of proof of the exempt
status to the authorities (most tax havens differentiate between
offshore and onshore companies. Onshore companies are taxed normally,
offshore companies – i.e. companies which transact business outside of
the country are not taxed. The Cayman Islands is the exception: Real
zero-tax haven)
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There are over
25,000 international business companies registered in Belize, many
of which have been formed to hold legal title to real property in
jurisdictions outside Belize or to create securities trading
accounts in Europe, Canada or the United States. One of the major
advantages of the Belizean IBC is the exemption from income tax,
capital gains or transaction tax.
The jurisdiction is highly rated for its banking secrecy;
corporations do not have to disclose beneficial ownership;, and
Trusts need not disclose the names of their beneficiaries. The
regulatory restrictions are minimal and foreign investment is
actively encouraged and facilitated by the Commercial Free Zone
Act 1994 which provides for the development of designated
commercial free Zones and Export Processing Zones which allow
trading in areas such as manufacturing, processing, and the
distribution of goods and services. These zones are exempted from
foreign exchange restrictions and have other attractive benefits.
The IBC formation costs are very competitive, the Belizean IBC
Registry is modern and computerized and incorporation can be
completed within one hour
Offshore Company Formation
Formalities
Belize offshore entities can take one of three forms: the
International Business Corporation, the Trust and the Offshore
Bank.
The International Business Corporation is the most common offshore
company formation and as with most jurisdictions the trading
activities of a Belizean IBC are restricted by statute.
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The international Business Act 1990
specifically prohibits an IBC from:
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- A registered office and
registered agent must be maintained in Belize and the
registered agent appropriately licensed with the necessary
professional qualifications. The information about the office
and agent are the only details that will appear on the public
record. Details of shares and beneficial ownership are
protected from public scrutiny;.
- There are no minimum
capitalization requirements, the nominal authorized share
capital is usually US$50,000.00 divided into shares with or
without par value but capital can be expressed in any currency;
- Bearer shares can be issued
with or without par value. Registered shares, preference
shares with or without voting rights can also be issued;.
- Only one director and share
holder are required and a company secretary is optional. There
are no nationality requirements;.
- The company name must end in:
Limited, Ltd, Corporation, Inc, Sociedade Anonima, SA or a
similar ending which will identify it as having limited
liability;
- Transfer of Jurisdiction: IBC
legislation permits foreign companies to be re-domiciled in
Belize;.
- There are no requirement for
meeting of members and Directors;
- There is no requirement to
file annual returns with the exception of franchise tax;
- Company Incorporation
formalities can be completed within 24 hours.
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Trusts
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Belizean Trusts are regulated by the
Trusts Act 1992. The intention of the statute was to integrate
both modern and flexible asset protection provisions. Trusts can
be created (other than a unit trust) by oral declaration or by a
written document including a will or codicil. A unit Trust can
only be created by a document.
A Trust other than a constructive Trust over land situated in
Belize is not enforceable unless evidenced in writing.
Registration of Trusts is optional. The maximum duration of a
Trust other than charitable Trust is 120 years from the date of
its creation.
Once validly created, a Belizean Trust is impenetrable and
cannot be set aside or varied by a Belizean Court; nor can a
court adjudicate in favour of any claim against Trust property
arising from the Order of a foreign court in Divorce or
Insolvency/Bankruptcy proceedings. It is a common feature that
the Trust is used in conjunction with an IBC to facilitate the
anonymity of beneficiaries from IBC’s officers.
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Taxation
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Incorporated Belizean local
businesses pay Corporation Tax of up 25% on turnover and
employees pay up to 45% tax on income in addition to social
contributions. There is also Sales Tax up to 12% on the
production of goods and services, stamp duty, Inheritance and
Capital Gains taxes.
IBC's, offshore Banks and Trusts (provided that the Settlor and
Beneficiaries are not resident during the tax year and Trust
property does not include any land situated in Belize) are
exempt from income tax, taxation on the payment of dividends and
interest, gifts, stamp duty, Inheritance and Capital Gains taxes.
However, Withholding tax of 25% is levied against non resident
companies and individuals in relation to management fee,
mortgage and debenture interest, insurance premiums and rental
of plant and machinery.
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Banking
The major local banks provide a full range of international
banking services including foreign currency savings and checking
accounts earning tax-free interest and operated for the purpose
of exchange control on a non-resident basis.
Belizean Offshore Bank can establish, maintain and operate a
business office in Belize; transact offshore banking business
through its business office in Belize without restrictions; and
transact offshore banking business with a local entity in Belize
licensed under the Banks and Financial Institutions Act, 1995.
Belize Offshore Banks are not subject to exchange control
regulations.
The Central Bank of Belize was established pursuant to the
Central Bank Act of 1982, the Bank Act. The Central Bank has a
statutory obligation under the Bank Act to foster monetary
stability and promote credit and exchange conditions conducive
to economic growth within the context of the government's
economic policy. One of the most favourable benefits, subject to
references, is that all Belizean companies can open up a bank
account with the Bank of Belize without additional verification
making it one of the most competitive jurisdictions.
Employment law
Under Belizean law employees are entitled to a minimum wage.
Contractually the first two weeks of employment is the probation
period. Between 2 weeks and 6 months, three days notice of
termination must be given; between 6 months and one year, one
weeks notice; and after that 2 weeks notice. Employees are
entitled to 2 working weeks annual leave, and to 16 days sick
leave at their basic rate of pay providing they have worked an
aggregate period of not less than 60 days within the previous 12
months.
The Labour Department is responsible for the regulation of trade
unions, personnel management and policies, the security of
workers, management responsibilities including the collective
bargaining process and grievance and disciplinary procedures.
Industrial and employment disputes are handled by the Labour
Commissioner who will instruct a Labour Officer to apply
conciliation procedures.
The Constitution prohibits antiunion discrimination both before
and after a union is registered.
Geography, people
and culture
Belize is the most sparsely populated nation in Central America.
Slightly more than half of the population lives in rural areas.
About 25% live in Belize City, the principal port, commercial
centre, and former capital.
Most Belizeans are of multiracial descent. About 46.4% of the
population is of mixed Mayan and European descent (Mestizo);
27.7% are of African and Afro-European (Creole) ancestry; about
10% are Mayan; and about 6.4% are Afro-Amerindian (Garifuna).
The remainder, about 9.5%, includes European, East Indian,
Chinese, Middle Eastern, and North American groups.
English, the official language, is spoken by virtually all
except the refugees who arrived during the past decade. Spanish
is the native tongue of about 50% of the people and is spoken as
a second language by another 20%. The various Mayan groups still
speak their indigenous languages, and an English Creole dialect
(or "Kriol" in the new orthography), similar to the Creole
dialects of the English-speaking Caribbean Islands, is spoken by
most.
The rate of functional literacy is 76%. About 60% of the
population is Roman Catholic; the Anglican Church and other
Protestant Christian groups account for most of the remaining
40%. Mennonite settlers number about 7,160.
Immigration and
Residency
An application for permanent residence can be made after one year
of legal residence in Belize on a continuous basis. To acquire
nationality status an applicant should have permanent residence or
have resided legally in Belize for at least 5 years.
There are also incentives for permanent residence for Investors
and Belizeans living overseas.
Legal and Political System
Belize is a parliamentary democracy based on the Westminster model
and Queen Elizabeth II is head of state and is represented by a
Governor General. The primary executive organ of government is the
cabinet, led by a Prime Minister (head of government). Cabinet
ministers are members of the majority political party in
parliament and usually hold elected seats in the National Assembly
concurrently with their cabinet positions.
The National Assembly consists of a House of Representatives and a
Senate of 12 members. The 29 members of the House are elected to a
maximum 5 year term. The Governor General appoints the Senate. Six
are appointed on the recommendation of the Prime Minister, and 3
with the advice of the leader of the opposition. The Belize
Council of Churches and the Evangelical Association of Churches,
the Belize Chamber of Commerce and Industry and the Belize
Business Bureau, and the National Trade Union Congress and the
Civil Society Steering Committee each advise the Governor General
on the appointment of one senator each. The Senate is headed by a
president, who is a non voting member appointed by the governing
party.
Members of the independent judiciary are appointed. The judicial
system includes local magistrates, the Supreme Court, and the
Court of Appeal. Cases may, under certain circumstances, be
appealed to the Privy Council in London
The current Belizean Government is headed by the People's United
Party (PUP), which was elected to a second consecutive term in
office on March 5, 2003. The opposition party is the United
Democratic Party.
Economy
The currency is the Belizean dollar, fixed at BZ$2 = US$1.
Forestry was the only economic activity of any consequence in
Belize until well into the 20th century when the supply of
accessible timber began to dwindle. Cane sugar then became the
principal export. Exports have recently been augmented by expanded
production of citrus, bananas, seafood, and apparel.
Domestic industry is limited, constrained by relatively high-cost
labour and energy and a small domestic market.
A major constraint on the economic development of Belize continues
to be the scarcity of infrastructure investments. Although
electricity, telephone, and water utilities are all relatively
good, Belize has the most expensive electricity in the region,
despite recent cuts in commercial and industrial rates.
Belize continues to rely heavily on foreign trade, with the United
States as its number-one trading partner. Other partners include
the United Kingdom, European Union, Canada, Mexico, and Caribbean
Common Market (CARICOM) member states.
Legislation affecting
offshore and non resident business
If you require more information on any aspect of company
formations please contact us.
Belizean
Nationality Act 1981
Commercial Free Zone (CFZ) Act 1994
Computer Wagering Licensing Act 1995
Exchange Control Regulations 1980
Export Processing Zone (EPZ) Act 1990
Fiscal Incentive Act No 6 Of 1990
IBC Act, 1990
Income Tax Amendment Act 1998
International Insurance Act, 1999
Limited Liability Partnerships Act, 1999
Limited Life Companies Act, 1999
Money Laundering (Prevention) Act, 1996
Mutual Funds Act, 1999
Offshore Banking Act, 1996
Protected Cell Companies Act, 1999
Registration Of Merchants Ships Act 1989
Retired Persons Incentive Act 1999
Trade Unions and Employers Organizations Act of 2000
Trust Act 1992
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