Located in Central America, bordered by Mexico and the Caribbean Sea, Belize is a country rich with biodiversity and culture. Although less widely known than its neighbours, Guatemala and Mexico, it has gained popularity to become one of the top choices for foreign investors due to its favourable tax conditions, leading to an increase in interest in offshore companies in Belize.
In this article, we will be covering
- Overview of Belize
- Benefits of Offshore business set-up
- Registration procedure
Overview of Belize
An independent nation that achieved independence on September 21, 1981, Belize is a member of the Commonwealth, still retaining its historical link with the United Kingdom. With a population of nearly 400 thousand people, Belize has the smallest population per square mile in Latin America. This tropical country, rich with flora and fauna is a popular destination among divers, tourists, and adventure-seekers that seek out to explore the land of mountains, swamps, and tropical jungle – bounded by Mexico in the North, Guatemala to the West and South, and the Caribbean Sea to the East. Dubbed as a melting pot of cultures, immigrants from Central America, and more recently, from China, Europe, and North America make up a significant portion of Belize’s population.
Known for being one of the best tax havens in South America for its tax policies that allow investors to reduce their tax liabilities, Belize is the preferred destination for entrepreneurs seeking to maximise the benefits and opportunities brought about by the growing and diverse South American Economy. Coupled with the ease of incorporating an offshore company, Belize has become a very popular place of consideration for investors who are looking into venturing into the South American market with their offshore set-ups.
Benefits of Offshore Business Set-Up
1. Easy Incorporation
Legislations by the Belize government to create a business-friendly environment has eased the incorporation process. The documents required are also minimal, needing only the certificate of incorporation, memorandum, and articles of association, registered office, and name and address of the registered agent.
There is also an opportunity of incorporating the business on the same day, and the cost of incorporation is relatively low as compared to other countries. Its low initial operations cost and low annual costs make it even more attractive for investors to consider Belize as a place for their offshore business operations.
2. Tax Exemption and Financial Privacy
One of the key features of setting up an International Business Company (IBC), an offshore business in Belize is zero-tax legislation of 1990 and amendments in 2000, which is the total exemption of tax duties that include stamp duties, the income of IBC, dividends paid and more. There is also an exemption of tax on business expenses, interests, rent, royalties, compensation, or anything else that might be an expense of a Belize IBC.
Belize has only a few treaties with other governments, and this is beneficial because it makes it easy for individuals and businesses to engage in banking without worrying about potential consequences. Belize also does not place restrictions on currency movement in and out of the country. This is because there is no currency exchange control which can limit currency movements in terms of the amount that is dealt with, ensuring financial privacy for offshore businesses.
3. English as the official language
Although the most used language in Belize is Kriol (Belizean Creole) along with Garifuna, Mandarin, Spanish, and Maya, English is still the official language of the country, and this provides convenience for investors that consider Belize to set up their offshore business, with English being the lingua franca of the world. This helps as there will not be any form of a language barrier to overcome, which is an attribute most sought out for by many foreign investors.
4. Stable Economy and Government
Belize’s vibrant economy thrives on two major industries, namely tourism, and agro-business. It also boasts of having the second-highest GDP per capita in Central America, which reflects the performance and stability of their economy. However, it should be noted that being a small country and dependent on imported goods; the economy is vulnerable to external shocks and threats.
In terms of political stability, Belize is governed by a stable parliamentary democracy, where political violence is uncommon. This gives assurance of the political scene for investors who need to have an environment as political conflicts would not be ideal and sustainable to carry out businesses.
5. Strategic Location
It is easy to travel to Belize by sea and air transportation from Central and North America, making it a geographically strategic and well-connected location in the region.
6. Wide range of flexibility of setting up a business
There is a greater range of flexibility in the IBC requirements. The offshore company is required to have only one director and one shareholder. However, the Directors need not be a resident in Belize. There are also no requirements for a local director or secretary for annual general meetings. The meetings of directors and/or shareholders may be held in any country, at any time, and the directors and/or shareholders may attend meetings by their proxy.
These flexible policies provide ease and convenience for directors as there are not many requirements and restrictions placed on the operations of the company, and this allows for more autonomy and control by the stakeholders of the company, which is something that many investors look for when choosing a suitable jurisdiction for their offshore business set-up.
Registration Process and Procedure
The following are documents and steps required for the set-up of an offshore company in Belize:
- A duly certified passport or national ID copy (alternatively, the original document can be presented at our office);
- Proof of address (a recent utility bill or bank statement);
- A completed and signed Company Order form
- Legal documents such as Memorandum of Association and Articles of Association
The incorporation process is as follows:
- Finding a suitable location for the business: an application should be sent to the Commissioner of Lands for approval to obtain the registered address for the company in Belize.
- Register the name of the business: there is a need to consider the restrictions placed on the name of the company.
- Submission of necessary documents for the incorporation certificate.
We understand that it can be challenging to ensure ta thorough analysis of the above documents. Hence it can be helpful to have an expert opinion to ease the process of registration and detailed analysis and legal compliance of the documentation.
Belize – a hidden paradise for many adventurous travellers, is also one of the most preferred destinations for investors to consider an offshore business set-up. With its tax-haven reputation, business-friendly environment, sound jurisdiction, ease of incorporation makes Belize an attractive option for investors seeking an offshore jurisdiction.
However, it is vital to take note of the restrictions and regulations concerning the incorporation of the business and also to be familiar with the business set-up process in the chosen jurisdiction.
At Desfran, our team of expert consultants is here to provide you with our professional expertise regarding offshore services. Led by one of the world’s leading management teams, our experts draw on their wealth of knowledge to offer comprehensive management advice. We are aware of the latest developments and trends in the financial markets and are equipped to guide you to expand your business.
Request for a consultation with Desfran today.