Is Belize a Tax Haven? Offshore Jurisdiction Review

Belize continues to be one of Central America’s premier tax havens and destinations for offshore company formations opportunities. The country offers many tax advantages to both businesses and individuals looking to form an offshore company in Belize for either personal or commercial use.

Belize, a former British colony has a parliamentary democracy, similar to Canada, with a long history of tolerance as well as political and financial stability.  The country’s legal system is founded upon English Common Law with English as the official language. The Belize government, the International Financial Services Commission and the country’s financial institutions both continue to offer attractive financial packages to foreign investors looking to invest offshore or form a company or open a Belize offshore bank account.

Those seeking offshore banking and corporate infrastructure in a stable, affordable jurisdiction close to the United States will find Belize a perfect location that will satisfy all their financial and offshore needs. It offers visitors and residents a great climate, a vibrant and inclusive culture as well as a high level of political and economic freedom.

*UPDATE

There have been a number of recent changes to the Belize Corporate Law, no longer is it a tax-free jurisdiction, and due to the numerous changes to the law some of which can be found here. The jurisdiction and the offshore industry no longer holds the same allure as it did before, and only is attractive now for certain situations and individuals.

Benefits of Belize as a Tax Haven

• Speedy and simple incorporation for fast reaction to financial planning needs (one-hour incorporation)
• Total exemption from all forms of local taxation including Stamp Duty
• IBC's headquartered in Belize pay no taxes on profits earned outside the country
• Only one Shareholder is required – there is no public record of the Shareholder
• IBCs require only one Director who could be a corporation
• No residency or citizenship requirements for Directors of offshore companies
• Meetings of Shareholders and/or Directors may be held in any country, at any time and they may attend meetings by proxy
• No requirement to file accounts or to have accounts audited; public filing limited to certificate of incorporation, memorandum and articles of association, registered office and name and address of registered agent; companies in Belize are not required to have publicly accessible records.
• Capital may be expressed in any currency
• No minimum paid-up capital requirements
• Offshore business activities are exempted from exchange control in Belize.
• IBCs may be used for financial management, investment holding, ship or property ownership, share ownership of other companies, leasing of assets, copyrighting and/or licensing, as well as general commercial trading
• Ease of transfer of companies to and from Belize
• Modern, flexible legislation for mutual funds, insurance and trusts
• No double taxation treaties with any other country
• Companies are not required to file an annual tax return
• The US dollar is widely accepted for business purposes in Belize; there is a flat rate of exchange for the US and Belize dollars: US$1 for $2 Belize
• English is the official language in Belize, though it is possible to incorporate an International Business Corporation (IBC) in any language in the nation; many Chinese language IBCs are incorporated in Belize
• Incorporated companies in Belize have the same legal powers as an individual
• The legal system in Belize is based on English Common Law and simple for anglo-based countries to understand
• Companies in Belize can maintain bank accounts in other popular tax havens
• Traditionally very welcoming for expatriates
• Under Belize's retired persons' incentive program, foreigners who are over 45 years old and have a monthly income of at least US$2,000 are exempt from Belize's income tax.
• Real estate is still very affordable in Belize; a person can buy a lot in a planned community in Belize's Cayo District for just US$25,000; a home with all the modern amenities can be built in such a community for just US$100,000
• Belize has one of the world's most pleasant climates; the average low temperature in the nation is 75° Fahrenheit in January and the average high temperature is 80° Fahrenheit in July
• Belize is a popular destination for yachting and water sports; in addition to 450 offshore islands and the Belize Barrier Reef, the country is a popular destination for scuba diving and deep-sea fishing

Taxation

A Belize based IBC is not required to pay any tax on all operations conducted outside the country. Though there is a Business Tax on any enterprise that earns more than US$75,000 a year, but this tax does not apply to IBCs if all income earned is generated outside the country.

Similarly, self-employed individuals that earn more than US$20,000 a year are subject to pay the Business Tax if that revenue comes from activities within Belize; however, the Business Tax does not apply to all foreign-sourced income.

All firms that generate income from business activities in Belize have to get a Certificate of Clearance from the Income Tax Department. The Certificate is not required for IBCs as long as the company’s business activities are offshore.

In-Depth Information

Location

Belize is located on the Caribbean seaboard of Central America between Mexico and Guatemala. It has an area of approximately 9,000 square miles. The island is 174 miles at its longest point and 68 miles at its widest. Belmopan has been the capital of the country, since 1970.

Political Structure

Belize became a British colony in 1862 and by the early 1900's Belize had grown to nearly 40,000 inhabitants. A powerfully destructive hurricane hit the island in 1931 and destroyed much of the country’s infrastructure hurting the economy so badly that the residents began to become politically frustrated, which led to a call for independence.

In 1954 England gave the residents of Belize voting rights which were extended to all adults, and by 1961, they agreed to establish a timeframe to make Belize politically independent. In 1973, the colony's name was changed from British Honduras to Belize and on September 21, 1981, Belize's Independence was finally declared. 

Belize is now a parliamentary democracy similar to Canada or the UK and is one of the most stable nations in Latin America. It has never suffered a military coup, a revolution, or guerrilla warfare. Queen Elizabeth II is Belize's head of state which is retained largely for ceremonial purposes with much of the powers being deferred to the Prime Minister and his/her cabinet that are made up of the dominant political party in Parliament.

Economy and Infrastructure

Belize has a free and open economic system that has undergone a shift toward privatization of public industries. Belize’s government recently nationalized Belize Electric Limited (BEL), the nation's largest utility, and the telephone company, Belize Telemedia Limited (BTL).

Belize's economy is based on oil exports, fishing, agriculture, and tourism. There is a modern banking system and five large commercial banks that give customers access to all the modern financial and banking services.

There are several major commercial banks in Belize, which offer a full range of domestic and offshore services. The local currency is the Belize dollar which is tied to the US dollar at an exchange rate of BZ$2.00=US$1.00.

There are excellent telecommunications: cell phone service, international cellular roaming service, high-speed DSL, and full access to the Internet are widely available in Belize.

Airlines connect with major international routes through Miami, Houston and New Orleans. All major courier companies service Belize. Direct flights to Belize are available from several major U.S. cities, including Dallas, New York, Atlanta, Denver, and Los Angeles.

Language, Population and Culture

English is the official language of the country and all official documents and business transactions are conducted and written in English, as well as courts and government offices.

Though English is the official language, most people in Belize speak Spanish on a daily basis. The culture is a mix of Spanish together with British influences coming in the form of political and economic institutions. Most residents of Belize are of mixed Maya and Spanish ancestry as well as a large minority of Creoles (mixed African and European heritage). Similarly, there is now a substantial North American expatriate community that has developed in recent years due to the of ease of immigration from the United States and Canada.

With a population of 334,297 inhabitants, Belize has the lowest population density in Central America. Though the country's population growth rate is 2% which is one of the highest in the western hemisphere and is the second-highest in the region. 

Belize's legal system guarantees and protects basic individual rights such as freedom of speech and religion. Although the country is politically stable, it has suffered from a high rate of violent crime and drug trafficking in recent years, which the government is seeking to address.

Exchange Control

There are no exchange controls for any and all offshore business, banking and financial related activities in Belize.

Type of Law

As a former British colony, Belize’s legal system as well as their contract and commercial law is based on English Common Law, which is supplemented by local legislation. Similarly, the court system is also based on the English style together with the final Court of Appeal being the Privy Council in England.

Principal Corporate Legislation

Offshore corporations in Belize are regulated under the International Business Companies Act of 1990, which was amended in 2000

It normally takes one business day to incorporate an International Business Corporation (IBC) in Belize provided the name is available. There is no requirement to reveal beneficial ownership to government authorities, and no annual report is required, but companies are required to maintain a registered office in the country. Offshore business can be carried out in a tax-free environment though IBC’s cannot carry on business with residents of Belize or own local real estate. An IBC must have at least one shareholder and one director; though there is no requirement for these individuals to be residents.

Belize Offshore Structures from Offshore Protection

Visit the pages below for more information and/or to set up Belize-based offshore businesses:

• Belize International Business Company Formation

• Belize Forex Brokerage Licence

• Belize Trust