Belize International Limited Liability Companies (Amendment) Act, 2023

Key highlights of the Amendment

The primary objectives of the Amendment are threefold:

Change of name for Belize LLC

The primary objective of this amendment is the renaming of the “International Limited Liability Companies Act” to the “Limited Liability Companies Act,” simplifying the terminology to enhance clarity and understanding.

Residency restrictions lifted

Previously, the establishment of a Belize LLC was exclusively accessible to non-residents, Belize residents were excluded from forming this particular entity.

However, due to the effect of the Amendment Act, adjustments have been introduced, leading to the removal of this restriction. This significant change serves as a driving force for local entrepreneurship and underscores Belize’s dedication to nurturing a vibrant and inclusive business environment.

Operational restrictions removed

The Amendment Act also tackles the operational restriction that was previously imposed on Belize LLCs.

Specifically, LLCs were previously prohibited from engaging in several activities within Belize, such as owning real estate and conducting trade with Belize residents.

This Amendment Act, however, lifts these limitations, granting Belize LLCs the freedom to conduct business within the country.

Tax exemptions once granted to LLCs are removed

The Amendment removes the exemptions once granted to limited liability companies.

This change is aimed at establishing fairness and equal contributions to the country’s financial resources.

Currency transition

Another notable change is the transition of the currency for fees payable to the Registrar.

The currency for these fees has been changed from USD to Belizean Dollars (BZ), streamlining administrative processes and promoting local financial transactions.

Legal consequences

The penalties associated with violating the provisions of this Act have also undergone modification.

The penalties for prohibited actions have transitioned from “summary conviction to a fine not exceeding five thousand dollars” (USD) to “indictment to a fine not exceeding five hundred thousand dollars” (BZ).

For a full version of the Amendment Act, please refer to the National Assembly of Belize’s website.

Details of taxation framework update for Belize LLC

The Amendment marks a paradigm shift in the taxation regime for LLCs.

The tax exemption privileges previously enjoyed by LLCs have been removed, placing them under the purview of Belize’s comprehensive tax laws.

Under the Income and Business Tax Act, an LLC is now classified as a “disregarded entity.” This implies that its income and receipts are attributed to its members, unless the LLC formally chooses, in accordance with prescribed procedures, to be taxed as a separate corporate entity.

For Belize companies, stamp duty on transactions involving the company’s property, shares, membership interest, or other securities is not applicable if the company does not engage in relevant activities as defined in the ES Act and only owns stock, shares, membership interest, or other securities in another Belize company.

What does this mean for existing LLCs?

Existing LLCs must transition to the new taxation framework outlined in the Amendment and comply with regulations. This entails the following obligations:

• Paying taxes and filing annual tax returns;
• Following the Amendment Act, all LLCs are now subject to the Economic Substance Act similar to a Belize company; and
• May need to obtain a TIN (Tax Identification Number).

Conclusion

The Belize International Limited Liability Companies (Amendment) Act, 2023 signifies a milestone in aligning business regulations with modern economic realities.

With its emphasis on clarity, inclusivity, and adherence to taxation norms, this amendment reinforces Belize’s commitment to fostering a vibrant and dynamic business ecosystem.

If you have any questions regarding the Belize LLC Amendment, or if you would like more information about setting up a business in Belize, please feel free to reach out to us via service@bbcincorp.com.

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