Belize Forms of Offshore Operation
Offshore entities may take the following forms:
•
International Business Corporation
•
Trust
•
International Bank
Licenses are required only for financial institutions. Corporations do not have to disclose beneficial ownership, and Trusts need not disclose the names of their beneficiaries.
Belize Tax Treatment of Offshore Operations
International Business Companies
Under the International Business Company Act of 1990, IBC’s are exempt from most types of taxation. Exemptions include:
•
all income of an IBC;
•
all dividends paid by an IBC to persons resident in Belize or elsewhere;
•
all interests, rent, royalties, compensations and other amounts paid by an IBC to persons who are not residents in Belize;
•
capital gains realized on any shares, debt obligations or other securities of an IBC by persons who are not residents in Belize.
IBC’s are exempt from the payment of stamp duty on:
•
all instruments relating to transfer of any property to or by an IBC;
•
all instruments relating to transactions in respect of the shares, debt obligations or other securities of an IBC;
•
all instruments relating in any way to the assets or activities of an IBC.
Trusts
Provided that the settlor is not resident in Belize during a tax year, that none of the beneficiaries are resident in Belize during that year, and that the trust property does not include any land situated in Belize, exemptions include:
•
the income of the trust for that year from all provisions of the Income Tax Act;
•
no estate, inheritance, succession or gift tax or duty is payable with respect to the trust property by reason of any death occurring during that year; and
•
no stamp duty is payable on all instruments executed in that year and relating to the trust property or to transactions carried out by the trustee on behalf of the trust.
For the purposes of the Exchange Control Regulations, 1976, with regard to the trust property and to all transactions carried out by the trustee on behalf of the trust, a trustee of an exempt trust is considered non-resident.
International Banks
A Belize International Bank is exempt from all forms of taxation on its profits or gains, or upon any interest or dividends earned in respect of banking business carried on from within Belize; also there is no stamp duty on Bills of Exchange or promissory notes or any other document, instrument or certificate executed by or in connection with an offshore banking business. At the time of writing:
The annual license fee for a Class A (Unrestricted) Banking License is $20,000; the annual license fee for a Class B (Restricted) Banking License is $15,000.
Shipping Registration
The annual tax is calculated at US $0.10 per net ton or fraction thereof. Most other government fees vary depending on the gross tonnage of the vessels, for example:
Registration Fees US $200 – US $3,000
Annual Service Tax US $200 – US $3,000
Annual Inspection Tax US $500 – US $1,500
There are also other miscellaneous documentary fees and taxes:
Ownership documents US $300
Ship mortgages US $750
Mortgage supplements, addenda or assignments US $300
Discharge deeds US $200
According to the International Merchant Marin Registry of Belize (IMMARBE), the annual tax for a small yacht (less than 24 metres) used for non-commercial purposes is $300. The registration fee is also $300.
Belize Export Processing Zones
The rules and regulations governing the EPZ Programme are contained in the EPZ Act 1990 and Export Processing Zone Regulations 1992.
Various incentives to investors under the EPZ Act include:
•
full import and export duty exemptions, extending to capital equipment, intermediate goods, spare parts and service vehicles utilized inside the EPZ;
•
exemptions from capital gains, property and land tax, excise, sales, and consumption tax, trade turnovers, foreign exchange, and transfer tax;
•
a guaranteed income tax holiday of 20 years with an option to extend and deduct losses from profits following the tax holiday period;
•
divided tax exemption in perpetuity;
•
opportunity to open foreign currency bank accounts in Belize and abroad;
•
opportunity to sell, lease or transfer items, goods and services within an EPZ;
•
customs inspection at the zone for expediency;
•
work permits at no cost for all professionals and technical staff;
•
exemption from the Supplies Control Act and its regulations;
•
no raw material import restrictions;
•
no import or export- licensing requirement;
•
no trade licensing for business to operate;
•
no licensing requirement for domestic suppliers who sell to EPZ business.
Belize Commercial Free Zone
The Commercial Free Zone Act 1994 established a Commercial Free Zone at Corozal to attract foreign investment. The Zone provides facilities for various activities including manufacturing, processing, packaging, warehousing and distribution of goods and services.
Benefits and exemptions available to companies in the Commercial Free Zone include:
•
No restrictions on foreign exchange including the sale of foreign currency or the transfer of foreign exchange into, out of or within a CFZ by CFZ businesses;
•
No Government charges and taxes on the use of foreign currency within a CFZ;
•
CFZ businesses are allowed to open an account in any currency with a duly registered bank of its choice which is located in the CFZ;
•
All merchandise, articles, or goods entering a CFZ for commercial purposes are exempt from import duties, stamp duties and revenue replacement duties;
•
All fuel and goods including buildings materials, furniture, equipment, supplies and parts required for the proper functioning of a CFZ business are exempt from all duties and taxes;
•
NB: A ‘Social Fee’ of 1.5% is charged on all goods and services imported into the CFZ, except for fuel; the fee on fuel is 10%;
•
No quotas apply to imports or exports of a CFZ business;
•
Imports or exports of a CFZ business do not require an import or export license;
•
With some exceptions, all imports and exports of a CFZ are exempt from all custom duties, consumption taxes, excise taxes, and export duties.
CFZ businesses pay an income tax at the following rates:
•
Up to BZ$15,000 of total chargeable income, 2%;
•
Over BZ$15,000 and up to BZ$30,000 of total chargeable income, 4%;
•
Over BZ$30,000 and up to $100,000 of total chargeable income, 6%;
•
Over BZ$100,000 of total chargeable income, 8%.
A credit of up to 2% is available to companies which employ Belizean workers as follows:
•
From 10 to 30 Belizean workers employed, 1% of taxable income;
•
Over 30 and up to 50 Belizean workers employed, 1.5% of taxable income;
•
Over 50 Belizean workers employed, 2% of taxable income.
During the first ten years of its operation, a CFZ business is exempt from income tax or capital gains tax or any new corporate tax levied by the Government of Belize, and any dividends paid by a CFZ business are exempt from tax for the first twenty years of its operation.
Where a CFZ business incurs a total net loss over the five years’ tax holiday, that loss may be carried forward and deducted against profits in the three years following the tax holiday period.
Any proceeds from the sale of stock or other partial or complete ownership interest in a CFZ business are exempt from the tax described above.
Belize Taxation of Foreign Employees of Offshore Operations
This section refers to the taxation of foreign employees of offshore operations, see Domestic Personal Taxes for the general principles of individual taxation in Belize, which also apply to the resident employees of offshore entities.
There is no distinction between foreign and Belizean employees, whether or not the business is ‘offshore’. Tax is deducted under the ‘PAYE’ system, and there are compulsory social insurance contributions.
Belize Exchange Control
Under the Exchange Control Regulations, Chapter 43 of the Laws of Belize (1980) only the Central Bank, authorized dealers and authorized depositories may deal in foreign currency, and a foreign exchange permit must be obtained from an authorized dealer or the Central Bank. The permission of the Central Bank is also required in order to secure a loan from outside Belize which involves a foreign currency, and also to service repayment of foreign debt.
The necessary approvals, however, can be easily secured in the case of genuine, approved enterprises. Foreign investors are required to register any investments made in Belize with the Central Bank to facilitate the repatriation of profits, dividends, etc.
Belize Offshore Activities
The IBC act prohibits an IBC from:
•
Carrying on business with persons resident in Belize;
•
Owning an interest in real property situated in Belize, except lease property for office purposes;
•
Carrying on banking business;
•
Carrying on insurance or reinsurance business;
•
Carrying on the business of providing registered agents/offices for companies.
Otherwise, a Belize IBC may engage in any activity that is not unlawful in Belize.
A Belize International Bank can carry on the following activities within Belize:
•
establish, maintain, and operate a business office in Belize;
•
transact international banking business through its business office in Belize without restrictions;
•
transact international banking business with a local entity in Belize licenced under the Banks and Financial Institutions Act, 1995.
Belize Employment and Residence
Any individual can apply for permanent residence after one year of legal residence in Belize on a continuous basis. At the time of writing, the permanent residence fee is $100.00 and a deposit is needed which can range from $187.50 to $1562.50 depending on the nationality of the applicant. This deposit may be refunded three years after residency is granted.
To acquire nationality status an applicant should have permanent residence or have resided legally in Belize for at least 5 years.
The Retired Persons Incentive Act passed by the Belize legislature in early 1999 is now in force and being implemented by the Belize Tourism Board. The program, which resembles the formerly popular but now defunct pensionado program in Costa Rica, is designed to attract more retirees to Belize. Qualified retirees are able to live full time tax-free in Belize and bank there, under a ‘permanent’ tourist visa.
Application forms for work permits are available at any Labour Department Office free of cost. There are two types of forms- one for self employment, the other for hiring a foreign worker.
Belize Banking Law
Offshore banking in Belize began when the outdated 1977 Banking Act, which did not adequately provide for a sound regulatory and supervisory authority, was repealed and replaced by the enactment of the Banks and Financial Institutions Act, 1995, and the introduction of the Offshore Banking Act, 1996, and the Money Laundering (Prevention) Act, 1996, which incorporated the best features of offshore banking legislation in Panama, Cayman and the British Virgin Islands.
The Offshore Banking Act was amended in 2002 to change the name of the Offshore Banking Act and offshore banks to International Banking Act (IBA) and international banks, respectively. The amendments also strengthen the supervisory and investigative powers of the CBB to meet international standards, to provide better transparency and exchange of information with respect to international banking and to empower the CBB to grant licenses for international banking.
A Belize International Bank can carry on the following activities within Belize:
* establish, maintain, and operate a business office in Belize;
* transact offshore banking business through its business office in Belize without restrictions;
* transact offshore banking business with a local entity in Belize licenced under the Banks and Financial Institutions Act, 1995.
The major local banks offer 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. Such accounts are offered to IBCs, individuals and trustees. Credit card services are also available.
Belize International Banks are not subject to exchange control regulations.
The Central Bank of Belize, the financial sector’s regulatory and supervisory body, says that although many applications for international banking licences have been received since the introduction of the new legislation, only five had successfully met its requirements by mid-2003.
Two categories of Belize International Banks are currently available, “A” Class – Unrestricted and “B” Class – Restricted. A “B” Class bank is restricted to carrying on such business as is specified in its license.
The holder of an “A” Class international banking licence needs to establish, maintain, and operate a business office (physical presence) in Belize. This type of Belize International Bank is permitted to transact international banking business through its business office in Belize without restrictions on that business.
Authorised and paid up capital of not less than US $500,000 must be maintained if the licence is for a local company, or US $25,000,000 in the case of a foreign bank.
“B” Class – Restricted
The holder of a “B” Class international banking licence also needs to establish, maintain, and operate a business office (physical presence) in Belize, but they are limited to transacting only such international banking business as is specified in its licence. A “B” Class Belize International Bank is prohibited from soliciting or accepting monetary deposits or any other valuable property from the general public, as well as from issuing cheque books or providing any current deposits or chequing account facilities to depositors.
Authorised and paid up capital of not less than US$1,000,000 must be maintained if the licence is for a local company, or US $15,000,000 in the case of a foreign bank.
Belize’s International Banking legislation stipulates that an entity is eligible to apply for an international banking licence if:
* it is incorporated or registered under the Companies Act or the International Business Companies Act as a company limited by shares, or if it is a foreign bank;
* its shares are in registered form and not in bearer form;
its memorandum and articles of association are acceptable to the Central Bank; and
* its authorized and paid up capital are in compliance with statutory requirements (see above).
Upon application, eligible companies must furnish the following documentation, along with a non-refundable fee of US $500 (at the time of writing):
* name and address of directors and principal shareholders;
* the ultimate beneficial ownership of the company or proposed company where shareholders of record are, or are to be, corporations, trusts or other legal entities or organizations, or where the shareholders of record are acting as nominees for or under the direction of any other person;
* the shareholding structure, management, and financial standing of the company;
* detailed business and financial plans;
* particulars of referees, guarantors and other third parties;
* details of any subsidiary or affiliated company;
* details of any overseas office which the company has or proposes to open;
* names and addresses of the external auditors including the experience of the auditors in auditing banks;
* if a foreign bank, a written statement confirming that there is no objection to the application from banking supervisory authorities in its country of incorporation and in the country where its principal office is located;
* signed application by the directors of the eligible company; and
* any other information that the Central Bank may require.
The Central Bank of Belize submits its recommendation to the Minister of Finance within sixty days of receiving a completed application. After which, a decision is rendered within four weeks by the Minister.
Belize Fiscal Incentives Act
The Fiscal Incentives Act 1990 (FIA) superseded and incorporated previous investment incentive legislation.
A company that meets the necessary criteria set by the Ministry of Economic Development is granted an “Approved Enterprise Order” (locally referred to as a “Development Concession”) and is considered an “Approved Enterprise” under the FIA.
Normally tax holidays are given for a period of five years commencing from the date of production, but upon application the tax holiday period may be renewed for a further term not exceeding ten years. As an additional incentive, however, companies that will engage in Agriculture, Agro-industry, Food-processing, Mariculture or Manufacturing and whose operations are highly labour intensive and whose productions are strictly for export, can be granted tax holidays for up to twenty five years.
During the tax holiday period, an approved enterprise is partially exempt from the payment of income tax on all profits and gains accruing to the approved enterprise and arising from the production of the approved product or service under the Income and Business Tax Act, at the specified annual percentage rates.
In addition, any dividends or other profits arising out of such an enterprise during the tax holiday period and paid to shareholders during such period shall not be taken into account when the chargeable income of the shareholders is being ascertained. This benefit, however, shall not apply:
* where the total amount of the dividends or profits paid to the shareholder exceeds an amount which is equivalent to the total amount invested by the shareholder in the said enterprise during its tax holiday period; and
* where the shareholder is likely to become liable by the laws of his country of residence to pay additional tax owing to the fact that the dividend he received hereunder was not subject to income tax in Belize.
A duty exemption period is normally not more than fifteen years duration commencing from the date of the approved enterprise order, but in the case of an export enterprise this period may be extended for an additional ten years. And, for those companies engaged in Agriculture, Agro-industry, Food- processing, Mariculture or Manufacturing whose operations are highly labour intensive and whose productions are strictly for export, the duty exemption period can be up to twenty five years.
Upon production to the Comptroller of a certificate issued by the Permanent Secretary in the Ministry of Economic Development (such a certificate specifies under what terms and conditions certain articles or materials may be imported, e.g,. being that they are necessary for the establishment or expansion and conduct of the approved enterprise) an approved enterprise may import the following items into Belize, free of customs duty and stamp duty during the duty exemption period:
* all building materials, plant, machinery, equipment, tools including specialist hand tools (but not including other hand tools), utility and transport vehicles, fixtures and fittings, office equipment and appliances, spare parts on plant and plant related machinery and agricultural machinery;
* any raw materials or other items imported for use in the approved enterprise.
However, in the case of an export enterprise exporting to non-CARICOM countries, no duty exemption will be granted for any raw materials or articles which are available in Belize or in any Member State provided that they are of comparable quality and price.
All the rights, privileges, benefits, immunities, duties and obligations conferred or imposed by or under the FIA on an approved enterprise can be transferred to another company where:
* the approved enterprise merges with or is taken over by another company, or forms part of another company’s reconstruction, and/or
* in the opinion of the Minister of Economic Development it is equitable or in the public interest to do so.
In addition, an approved enterprise can also benefit from Belize’s access to a number of preferential markets. These include the USA under the Caribbean Basin Initiative, Canada under CARIBCAN, the Caribbean under CARICOM and Europe under LOME IV.
Belize Internet Gambling Law
Belize is one of the few countries that has enacted legislation allowing for the establishment of online wagering. Its Computer Wagering Licensing Act, 1995, which came into force on May 28, 1996, provides for the proper conduct and regulation of gambling via the Internet.
Besides legalising wagering on the Internet, the Act also provides for the licensing of computer services operators who provide Internet users with the facility to wager against each other on sporting events or other games of chance.
‘Computer Internet’ is defined in the Act as being any publicly accessible data transmission network, or any privately-owned data transmission network which is authorised to transmit such data. And, computer wagering service is defined as being a computer service which allows computer users to wager on sporting events or other games of chance against each other through the Computer Internet.
The Belize Computer Wagering Licensing Board vets all applications for licences to provide computer wagering services and, with the prior approval of the Minister of Home Affairs (Minister), can grant exclusive licences. They are also responsible for the control and regulation of all persons who provide computer wagering services.
The Board is comprised of the Accountant General, the Auditor General, the Permanent Secretary of the Ministry of Home Affairs, and three other persons appointed by the Minister, one of whom is appointed on the recommendation of the Leader of the Opposition.
Application for a licence to provide computer wagering services should be accompanied by the prescribed licence fee of US$15,000 (at the time of writing) for a non-exclusive licence. If an application is refused, the licence fee is refundable subject to an administrative charge.
If a licensee breaches any provision of the Act, or any regulations made thereunder, or any of the conditions attached to the licence, the Board may at any time revoke the licence without compensation and without prejudice to any other penalties imposed by or under the Act. Revocations may be appealed to the Minister whose decision is final. Regardless of the time of issue, an annual licence expires on March 31st next following.
The following documentation need to be submitted upon application for a licence to provide computer wagering services:
* Application letter – including corporate name, website address and a brief description of the activities of the business;
* Description of project – including methodology, operational procedures, etc.;
* Business background of the Company as related to Wagering on the Internet;
* Memorandum and Articles of Association;
* Certificate of Incorporation or registration in Belize;
* Names and personal employment record of the beneficial owner(s), officers and principal employees;
* Character references of the beneficial owner(s), officers, and principal employees;
* Police/criminal history record of the beneficial owner(s), officers and principal employees;
* Names of all holding, intermediary and subsidiary companies;
* Financial background of the Company;
* Financial resources of the Company – including statement of assets, liabilities, net worth;
* Bankers/financial references of the Company.
As a security for the performance of obligations under the licence and for the payment of any fine, licensees were required under the original legislation to make a cash deposit of US $500,000. This requirement was later substantially modified.
Other regulatory requirements include:
* The maintenance of a separate bank account for processing wager transactions. Licensees may charge a processing fee not exceeding 5% of each transaction, or the sum of US $20, whichever is greater.
* A copy of the daily transactions and the bank account balance of each computer user may be required by the Board.
Belize Trust Law
Belize established a modern Belize Trust Act in 1992 which incorporated the best features of similar laws prevailing in other major offshore jurisdictions such as Cayman, Panama and Bermuda.
Trusts can be established either by oral declaration or by written instrument. However, unit trusts must be formal written documents and trusts over property in Belize are unenforceable unless they are written.
Non-charitable Belize Trusts have a maximum life of 120 years. Charitable trusts may be established with unlimited duration.
Trusts formed under Belize law are highly secure since a Belizean court cannot set aside or vary a Belizean trust. No Belize Trust has ever been compromised. A Belize court cannot entertain any claim against the trust property emanating from the order of a foreign court regarding marriage or divorce, or succession or claims by creditors in an insolvency.
The law provides for the creation of spendthrift trusts and allows a settlor to be the beneficiary of a spendthrift trust. Settlors and beneficiaries may give to trustees memoranda of wishes to guide the trustees.
The law allows for a protector who may also be a settlor, trustee or beneficiary. In carrying out his duties, a protector has a fiduciary obligation to the beneficiaries of the trust. However, he or she is not considered a trustee.
A trust can have a minimum number of one or a maximum number of four trustees (except for charitable trusts). A trustee may also be a beneficiary and a settlor. Liberal powers are given to trustees to advance moneys for maintenance and education of children and beneficiaries.
Individuals serving as Trustees are personally liable at law for any losses as a consequence of a breach of trust. However, in the case of a corporate trustee the directors are not personally liable.
Trusts may be registered with the Belize Registrar at the option of the settlor for a fee of US$100 (at the time of writing). The Registrar is required to issue a certificate of registration. An entry in the register of trusts cannot be opened for inspection without the written consent of the trustee.
On June 15, 2007, the Trusts (Amendment) Act 2007 came into force. This provides for compulsory registration of international (offshore) trusts. For this purpose, an International Trusts Registry has been established in the Office of the International Financial Services Commission.
The law provides that all offshore trusts governed by Belize law must have a Trust Agent resident in Belize whose office would serve as the Office of the Trust. A list of licensed Trust Agents is available on the International Financial Services Commission’s website at www.ifsc.gov.bz.
Only a limited information needs to be provided to the Trusts Registry, e.g., Name of the Trust, Date of Settlement of the Trust, Name of the Trustee and Name of the Trust Agent. All other information is kept by the Trust Agent. No confidential or private information needs to be disclosed to the Registry and it is not necessary that a copy of the Trust Deed be filed with the Registry.
The fee for registration is US$100.00 which is a one-time fee. If a trust was previously registered with the General Registry, it will be re-registered by the International Trusts Registry without a fee. The International Trusts Registry is not open to the public.
Offshore entities may take the following forms:
•
International Business Corporation
•
Trust
•
International Bank
Licenses are required only for financial institutions. Corporations do not have to disclose beneficial ownership, and Trusts need not disclose the names of their beneficiaries.
Belize Tax Treatment of Offshore Operations
International Business Companies
Under the International Business Company Act of 1990, IBC’s are exempt from most types of taxation. Exemptions include:
•
all income of an IBC;
•
all dividends paid by an IBC to persons resident in Belize or elsewhere;
•
all interests, rent, royalties, compensations and other amounts paid by an IBC to persons who are not residents in Belize;
•
capital gains realized on any shares, debt obligations or other securities of an IBC by persons who are not residents in Belize.
IBC’s are exempt from the payment of stamp duty on:
•
all instruments relating to transfer of any property to or by an IBC;
•
all instruments relating to transactions in respect of the shares, debt obligations or other securities of an IBC;
•
all instruments relating in any way to the assets or activities of an IBC.
Trusts
Provided that the settlor is not resident in Belize during a tax year, that none of the beneficiaries are resident in Belize during that year, and that the trust property does not include any land situated in Belize, exemptions include:
•
the income of the trust for that year from all provisions of the Income Tax Act;
•
no estate, inheritance, succession or gift tax or duty is payable with respect to the trust property by reason of any death occurring during that year; and
•
no stamp duty is payable on all instruments executed in that year and relating to the trust property or to transactions carried out by the trustee on behalf of the trust.
For the purposes of the Exchange Control Regulations, 1976, with regard to the trust property and to all transactions carried out by the trustee on behalf of the trust, a trustee of an exempt trust is considered non-resident.
International Banks
A Belize International Bank is exempt from all forms of taxation on its profits or gains, or upon any interest or dividends earned in respect of banking business carried on from within Belize; also there is no stamp duty on Bills of Exchange or promissory notes or any other document, instrument or certificate executed by or in connection with an offshore banking business. At the time of writing:
The annual license fee for a Class A (Unrestricted) Banking License is $20,000; the annual license fee for a Class B (Restricted) Banking License is $15,000.
Shipping Registration
The annual tax is calculated at US $0.10 per net ton or fraction thereof. Most other government fees vary depending on the gross tonnage of the vessels, for example:
Registration Fees US $200 – US $3,000
Annual Service Tax US $200 – US $3,000
Annual Inspection Tax US $500 – US $1,500
There are also other miscellaneous documentary fees and taxes:
Ownership documents US $300
Ship mortgages US $750
Mortgage supplements, addenda or assignments US $300
Discharge deeds US $200
According to the International Merchant Marin Registry of Belize (IMMARBE), the annual tax for a small yacht (less than 24 metres) used for non-commercial purposes is $300. The registration fee is also $300.
Belize Export Processing Zones
The rules and regulations governing the EPZ Programme are contained in the EPZ Act 1990 and Export Processing Zone Regulations 1992.
Various incentives to investors under the EPZ Act include:
•
full import and export duty exemptions, extending to capital equipment, intermediate goods, spare parts and service vehicles utilized inside the EPZ;
•
exemptions from capital gains, property and land tax, excise, sales, and consumption tax, trade turnovers, foreign exchange, and transfer tax;
•
a guaranteed income tax holiday of 20 years with an option to extend and deduct losses from profits following the tax holiday period;
•
divided tax exemption in perpetuity;
•
opportunity to open foreign currency bank accounts in Belize and abroad;
•
opportunity to sell, lease or transfer items, goods and services within an EPZ;
•
customs inspection at the zone for expediency;
•
work permits at no cost for all professionals and technical staff;
•
exemption from the Supplies Control Act and its regulations;
•
no raw material import restrictions;
•
no import or export- licensing requirement;
•
no trade licensing for business to operate;
•
no licensing requirement for domestic suppliers who sell to EPZ business.
Belize Commercial Free Zone
The Commercial Free Zone Act 1994 established a Commercial Free Zone at Corozal to attract foreign investment. The Zone provides facilities for various activities including manufacturing, processing, packaging, warehousing and distribution of goods and services.
Benefits and exemptions available to companies in the Commercial Free Zone include:
•
No restrictions on foreign exchange including the sale of foreign currency or the transfer of foreign exchange into, out of or within a CFZ by CFZ businesses;
•
No Government charges and taxes on the use of foreign currency within a CFZ;
•
CFZ businesses are allowed to open an account in any currency with a duly registered bank of its choice which is located in the CFZ;
•
All merchandise, articles, or goods entering a CFZ for commercial purposes are exempt from import duties, stamp duties and revenue replacement duties;
•
All fuel and goods including buildings materials, furniture, equipment, supplies and parts required for the proper functioning of a CFZ business are exempt from all duties and taxes;
•
NB: A ‘Social Fee’ of 1.5% is charged on all goods and services imported into the CFZ, except for fuel; the fee on fuel is 10%;
•
No quotas apply to imports or exports of a CFZ business;
•
Imports or exports of a CFZ business do not require an import or export license;
•
With some exceptions, all imports and exports of a CFZ are exempt from all custom duties, consumption taxes, excise taxes, and export duties.
CFZ businesses pay an income tax at the following rates:
•
Up to BZ$15,000 of total chargeable income, 2%;
•
Over BZ$15,000 and up to BZ$30,000 of total chargeable income, 4%;
•
Over BZ$30,000 and up to $100,000 of total chargeable income, 6%;
•
Over BZ$100,000 of total chargeable income, 8%.
A credit of up to 2% is available to companies which employ Belizean workers as follows:
•
From 10 to 30 Belizean workers employed, 1% of taxable income;
•
Over 30 and up to 50 Belizean workers employed, 1.5% of taxable income;
•
Over 50 Belizean workers employed, 2% of taxable income.
During the first ten years of its operation, a CFZ business is exempt from income tax or capital gains tax or any new corporate tax levied by the Government of Belize, and any dividends paid by a CFZ business are exempt from tax for the first twenty years of its operation.
Where a CFZ business incurs a total net loss over the five years’ tax holiday, that loss may be carried forward and deducted against profits in the three years following the tax holiday period.
Any proceeds from the sale of stock or other partial or complete ownership interest in a CFZ business are exempt from the tax described above.
Belize Taxation of Foreign Employees of Offshore Operations
This section refers to the taxation of foreign employees of offshore operations, see Domestic Personal Taxes for the general principles of individual taxation in Belize, which also apply to the resident employees of offshore entities.
There is no distinction between foreign and Belizean employees, whether or not the business is ‘offshore’. Tax is deducted under the ‘PAYE’ system, and there are compulsory social insurance contributions.
Belize Exchange Control
Under the Exchange Control Regulations, Chapter 43 of the Laws of Belize (1980) only the Central Bank, authorized dealers and authorized depositories may deal in foreign currency, and a foreign exchange permit must be obtained from an authorized dealer or the Central Bank. The permission of the Central Bank is also required in order to secure a loan from outside Belize which involves a foreign currency, and also to service repayment of foreign debt.
The necessary approvals, however, can be easily secured in the case of genuine, approved enterprises. Foreign investors are required to register any investments made in Belize with the Central Bank to facilitate the repatriation of profits, dividends, etc.
Belize Offshore Activities
The IBC act prohibits an IBC from:
•
Carrying on business with persons resident in Belize;
•
Owning an interest in real property situated in Belize, except lease property for office purposes;
•
Carrying on banking business;
•
Carrying on insurance or reinsurance business;
•
Carrying on the business of providing registered agents/offices for companies.
Otherwise, a Belize IBC may engage in any activity that is not unlawful in Belize.
A Belize International Bank can carry on the following activities within Belize:
•
establish, maintain, and operate a business office in Belize;
•
transact international banking business through its business office in Belize without restrictions;
•
transact international banking business with a local entity in Belize licenced under the Banks and Financial Institutions Act, 1995.
Belize Employment and Residence
Any individual can apply for permanent residence after one year of legal residence in Belize on a continuous basis. At the time of writing, the permanent residence fee is $100.00 and a deposit is needed which can range from $187.50 to $1562.50 depending on the nationality of the applicant. This deposit may be refunded three years after residency is granted.
To acquire nationality status an applicant should have permanent residence or have resided legally in Belize for at least 5 years.
The Retired Persons Incentive Act passed by the Belize legislature in early 1999 is now in force and being implemented by the Belize Tourism Board. The program, which resembles the formerly popular but now defunct pensionado program in Costa Rica, is designed to attract more retirees to Belize. Qualified retirees are able to live full time tax-free in Belize and bank there, under a ‘permanent’ tourist visa.
Application forms for work permits are available at any Labour Department Office free of cost. There are two types of forms- one for self employment, the other for hiring a foreign worker.
Belize Banking Law
Offshore banking in Belize began when the outdated 1977 Banking Act, which did not adequately provide for a sound regulatory and supervisory authority, was repealed and replaced by the enactment of the Banks and Financial Institutions Act, 1995, and the introduction of the Offshore Banking Act, 1996, and the Money Laundering (Prevention) Act, 1996, which incorporated the best features of offshore banking legislation in Panama, Cayman and the British Virgin Islands.
The Offshore Banking Act was amended in 2002 to change the name of the Offshore Banking Act and offshore banks to International Banking Act (IBA) and international banks, respectively. The amendments also strengthen the supervisory and investigative powers of the CBB to meet international standards, to provide better transparency and exchange of information with respect to international banking and to empower the CBB to grant licenses for international banking.
A Belize International Bank can carry on the following activities within Belize:
* establish, maintain, and operate a business office in Belize;
* transact offshore banking business through its business office in Belize without restrictions;
* transact offshore banking business with a local entity in Belize licenced under the Banks and Financial Institutions Act, 1995.
The major local banks offer 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. Such accounts are offered to IBCs, individuals and trustees. Credit card services are also available.
Belize International Banks are not subject to exchange control regulations.
The Central Bank of Belize, the financial sector’s regulatory and supervisory body, says that although many applications for international banking licences have been received since the introduction of the new legislation, only five had successfully met its requirements by mid-2003.
Two categories of Belize International Banks are currently available, “A” Class – Unrestricted and “B” Class – Restricted. A “B” Class bank is restricted to carrying on such business as is specified in its license.
The holder of an “A” Class international banking licence needs to establish, maintain, and operate a business office (physical presence) in Belize. This type of Belize International Bank is permitted to transact international banking business through its business office in Belize without restrictions on that business.
Authorised and paid up capital of not less than US $500,000 must be maintained if the licence is for a local company, or US $25,000,000 in the case of a foreign bank.
“B” Class – Restricted
The holder of a “B” Class international banking licence also needs to establish, maintain, and operate a business office (physical presence) in Belize, but they are limited to transacting only such international banking business as is specified in its licence. A “B” Class Belize International Bank is prohibited from soliciting or accepting monetary deposits or any other valuable property from the general public, as well as from issuing cheque books or providing any current deposits or chequing account facilities to depositors.
Authorised and paid up capital of not less than US$1,000,000 must be maintained if the licence is for a local company, or US $15,000,000 in the case of a foreign bank.
Belize’s International Banking legislation stipulates that an entity is eligible to apply for an international banking licence if:
* it is incorporated or registered under the Companies Act or the International Business Companies Act as a company limited by shares, or if it is a foreign bank;
* its shares are in registered form and not in bearer form;
its memorandum and articles of association are acceptable to the Central Bank; and
* its authorized and paid up capital are in compliance with statutory requirements (see above).
Upon application, eligible companies must furnish the following documentation, along with a non-refundable fee of US $500 (at the time of writing):
* name and address of directors and principal shareholders;
* the ultimate beneficial ownership of the company or proposed company where shareholders of record are, or are to be, corporations, trusts or other legal entities or organizations, or where the shareholders of record are acting as nominees for or under the direction of any other person;
* the shareholding structure, management, and financial standing of the company;
* detailed business and financial plans;
* particulars of referees, guarantors and other third parties;
* details of any subsidiary or affiliated company;
* details of any overseas office which the company has or proposes to open;
* names and addresses of the external auditors including the experience of the auditors in auditing banks;
* if a foreign bank, a written statement confirming that there is no objection to the application from banking supervisory authorities in its country of incorporation and in the country where its principal office is located;
* signed application by the directors of the eligible company; and
* any other information that the Central Bank may require.
The Central Bank of Belize submits its recommendation to the Minister of Finance within sixty days of receiving a completed application. After which, a decision is rendered within four weeks by the Minister.
Belize Fiscal Incentives Act
The Fiscal Incentives Act 1990 (FIA) superseded and incorporated previous investment incentive legislation.
A company that meets the necessary criteria set by the Ministry of Economic Development is granted an “Approved Enterprise Order” (locally referred to as a “Development Concession”) and is considered an “Approved Enterprise” under the FIA.
Normally tax holidays are given for a period of five years commencing from the date of production, but upon application the tax holiday period may be renewed for a further term not exceeding ten years. As an additional incentive, however, companies that will engage in Agriculture, Agro-industry, Food-processing, Mariculture or Manufacturing and whose operations are highly labour intensive and whose productions are strictly for export, can be granted tax holidays for up to twenty five years.
During the tax holiday period, an approved enterprise is partially exempt from the payment of income tax on all profits and gains accruing to the approved enterprise and arising from the production of the approved product or service under the Income and Business Tax Act, at the specified annual percentage rates.
In addition, any dividends or other profits arising out of such an enterprise during the tax holiday period and paid to shareholders during such period shall not be taken into account when the chargeable income of the shareholders is being ascertained. This benefit, however, shall not apply:
* where the total amount of the dividends or profits paid to the shareholder exceeds an amount which is equivalent to the total amount invested by the shareholder in the said enterprise during its tax holiday period; and
* where the shareholder is likely to become liable by the laws of his country of residence to pay additional tax owing to the fact that the dividend he received hereunder was not subject to income tax in Belize.
A duty exemption period is normally not more than fifteen years duration commencing from the date of the approved enterprise order, but in the case of an export enterprise this period may be extended for an additional ten years. And, for those companies engaged in Agriculture, Agro-industry, Food- processing, Mariculture or Manufacturing whose operations are highly labour intensive and whose productions are strictly for export, the duty exemption period can be up to twenty five years.
Upon production to the Comptroller of a certificate issued by the Permanent Secretary in the Ministry of Economic Development (such a certificate specifies under what terms and conditions certain articles or materials may be imported, e.g,. being that they are necessary for the establishment or expansion and conduct of the approved enterprise) an approved enterprise may import the following items into Belize, free of customs duty and stamp duty during the duty exemption period:
* all building materials, plant, machinery, equipment, tools including specialist hand tools (but not including other hand tools), utility and transport vehicles, fixtures and fittings, office equipment and appliances, spare parts on plant and plant related machinery and agricultural machinery;
* any raw materials or other items imported for use in the approved enterprise.
However, in the case of an export enterprise exporting to non-CARICOM countries, no duty exemption will be granted for any raw materials or articles which are available in Belize or in any Member State provided that they are of comparable quality and price.
All the rights, privileges, benefits, immunities, duties and obligations conferred or imposed by or under the FIA on an approved enterprise can be transferred to another company where:
* the approved enterprise merges with or is taken over by another company, or forms part of another company’s reconstruction, and/or
* in the opinion of the Minister of Economic Development it is equitable or in the public interest to do so.
In addition, an approved enterprise can also benefit from Belize’s access to a number of preferential markets. These include the USA under the Caribbean Basin Initiative, Canada under CARIBCAN, the Caribbean under CARICOM and Europe under LOME IV.
Belize Internet Gambling Law
Belize is one of the few countries that has enacted legislation allowing for the establishment of online wagering. Its Computer Wagering Licensing Act, 1995, which came into force on May 28, 1996, provides for the proper conduct and regulation of gambling via the Internet.
Besides legalising wagering on the Internet, the Act also provides for the licensing of computer services operators who provide Internet users with the facility to wager against each other on sporting events or other games of chance.
‘Computer Internet’ is defined in the Act as being any publicly accessible data transmission network, or any privately-owned data transmission network which is authorised to transmit such data. And, computer wagering service is defined as being a computer service which allows computer users to wager on sporting events or other games of chance against each other through the Computer Internet.
The Belize Computer Wagering Licensing Board vets all applications for licences to provide computer wagering services and, with the prior approval of the Minister of Home Affairs (Minister), can grant exclusive licences. They are also responsible for the control and regulation of all persons who provide computer wagering services.
The Board is comprised of the Accountant General, the Auditor General, the Permanent Secretary of the Ministry of Home Affairs, and three other persons appointed by the Minister, one of whom is appointed on the recommendation of the Leader of the Opposition.
Application for a licence to provide computer wagering services should be accompanied by the prescribed licence fee of US$15,000 (at the time of writing) for a non-exclusive licence. If an application is refused, the licence fee is refundable subject to an administrative charge.
If a licensee breaches any provision of the Act, or any regulations made thereunder, or any of the conditions attached to the licence, the Board may at any time revoke the licence without compensation and without prejudice to any other penalties imposed by or under the Act. Revocations may be appealed to the Minister whose decision is final. Regardless of the time of issue, an annual licence expires on March 31st next following.
The following documentation need to be submitted upon application for a licence to provide computer wagering services:
* Application letter – including corporate name, website address and a brief description of the activities of the business;
* Description of project – including methodology, operational procedures, etc.;
* Business background of the Company as related to Wagering on the Internet;
* Memorandum and Articles of Association;
* Certificate of Incorporation or registration in Belize;
* Names and personal employment record of the beneficial owner(s), officers and principal employees;
* Character references of the beneficial owner(s), officers, and principal employees;
* Police/criminal history record of the beneficial owner(s), officers and principal employees;
* Names of all holding, intermediary and subsidiary companies;
* Financial background of the Company;
* Financial resources of the Company – including statement of assets, liabilities, net worth;
* Bankers/financial references of the Company.
As a security for the performance of obligations under the licence and for the payment of any fine, licensees were required under the original legislation to make a cash deposit of US $500,000. This requirement was later substantially modified.
Other regulatory requirements include:
* The maintenance of a separate bank account for processing wager transactions. Licensees may charge a processing fee not exceeding 5% of each transaction, or the sum of US $20, whichever is greater.
* A copy of the daily transactions and the bank account balance of each computer user may be required by the Board.
Belize Trust Law
Belize established a modern Belize Trust Act in 1992 which incorporated the best features of similar laws prevailing in other major offshore jurisdictions such as Cayman, Panama and Bermuda.
Trusts can be established either by oral declaration or by written instrument. However, unit trusts must be formal written documents and trusts over property in Belize are unenforceable unless they are written.
Non-charitable Belize Trusts have a maximum life of 120 years. Charitable trusts may be established with unlimited duration.
Trusts formed under Belize law are highly secure since a Belizean court cannot set aside or vary a Belizean trust. No Belize Trust has ever been compromised. A Belize court cannot entertain any claim against the trust property emanating from the order of a foreign court regarding marriage or divorce, or succession or claims by creditors in an insolvency.
The law provides for the creation of spendthrift trusts and allows a settlor to be the beneficiary of a spendthrift trust. Settlors and beneficiaries may give to trustees memoranda of wishes to guide the trustees.
The law allows for a protector who may also be a settlor, trustee or beneficiary. In carrying out his duties, a protector has a fiduciary obligation to the beneficiaries of the trust. However, he or she is not considered a trustee.
A trust can have a minimum number of one or a maximum number of four trustees (except for charitable trusts). A trustee may also be a beneficiary and a settlor. Liberal powers are given to trustees to advance moneys for maintenance and education of children and beneficiaries.
Individuals serving as Trustees are personally liable at law for any losses as a consequence of a breach of trust. However, in the case of a corporate trustee the directors are not personally liable.
Trusts may be registered with the Belize Registrar at the option of the settlor for a fee of US$100 (at the time of writing). The Registrar is required to issue a certificate of registration. An entry in the register of trusts cannot be opened for inspection without the written consent of the trustee.
On June 15, 2007, the Trusts (Amendment) Act 2007 came into force. This provides for compulsory registration of international (offshore) trusts. For this purpose, an International Trusts Registry has been established in the Office of the International Financial Services Commission.
The law provides that all offshore trusts governed by Belize law must have a Trust Agent resident in Belize whose office would serve as the Office of the Trust. A list of licensed Trust Agents is available on the International Financial Services Commission’s website at www.ifsc.gov.bz.
Only a limited information needs to be provided to the Trusts Registry, e.g., Name of the Trust, Date of Settlement of the Trust, Name of the Trustee and Name of the Trust Agent. All other information is kept by the Trust Agent. No confidential or private information needs to be disclosed to the Registry and it is not necessary that a copy of the Trust Deed be filed with the Registry.
The fee for registration is US$100.00 which is a one-time fee. If a trust was previously registered with the General Registry, it will be re-registered by the International Trusts Registry without a fee. The International Trusts Registry is not open to the public.
No hay comentarios:
Publicar un comentario