Belize has long been recognized as one of the most premium tax-free jurisdictions for offshore businesses. In recent years, Belize has had further improvements in creating a much more favorable business environment for businesses. One of the highlighted events that you must have known is that Belize has latterly been removed from the EU list of non-cooperative tax jurisdictions thanks to many of its important reforms regarding the tax regime for IBCs.
In order to help foreign investors and new start-ups easier to operate their business, this article will shed light on a comprehensive guide to doing business in Belize for 2020. Let’s find out!
1. Belize At A Glance: A Good Option For Foreign Entrepreneurs
For those who are new start-ups and in mind of doing business in Belize, it is crucial to get a picture of Belize’s most fundamental factors that can have a big influence on offshore businesses.
Situated on the eastern coast of Central America, Belize has a stable and healthy economy. In fact, Belize also has the second highest per capita income in Central Americas. The country’s economy is based mainly on tourism, agriculture and service. The offshore services industry, remarkably, has made a major contribution to Belize’s GDP.
Despite the fact that Belize ranked 135/190 economies for the ease of doing business in 2019, which is not as competitive as that of many other jurisdictions, this tax haven is highly appreciated by its efforts in changing its acts, plus keeping to develop its business-friendly environment for foreign investments.
1.2. Language and currency
Belize is among the two nations in Central and South America that use English as an official language. Therefore, you can feel secure that a language barrier will not be a matter of concern at any point.
The official currency in Belize is BZD (the Belize dollar), and it has been pegged to the US dollar since 1978. Generally, the pegged rate is 1 USD = 2 BZD.
It is the Central Bank of Belize, referred to as a monetary authority in some places, which will administer and monitor the country’s foreign reserves and currency issuance.
1.3. Investment policy
Doing business in Belize can also bring offshore seekers various opportunities to grow their business. The force behind is that the Belizean government strongly welcomes new investments to their country.
In addition to a diversity of tax benefits for international business companies, there are also many supportive policies to give assistance to new offshore business. For example, BELTRAIDE, which is a statutory body of trade promotion groups in Belize, will entice, facilitate and monitor new investments by providing them information and endeavoring to simplify and make it easier for business start-ups.
There are some certain incentives to attract foreign investors to Belize, such as EPZ – Export Processing Zones Program, Fiscal Incentives Program, Commercial Free Zones, Repatriation of Profits and Dividends and more.
However, it is also noteworthy that those to establish a business in Belize will meet no restrictions on their investments providing that their business operation is in accordance with the law of Belize. Take a Belize IBC for instance, they are given free rein to conduct its trading activities, but prohibited from doing business within the territory of Belize.
1.4. Banking system
Belize is a well-established banking jurisdiction. You can explore popular kinds of financial institutions available in Belize, such as Government savings banks or the commercial banks. Offshore banking service is outstandingly very robust.
The banking system in Belize follows a two-tiered regime that offers a diversity of services for various types of depositors and different levels of demand.
Many individuals and corporations often come to one big concern which is banking stability. Fortunately, Belize is excellent in its liquidity rates. As mentioned earlier, most banks in Belize have over 24% liquidity rates, which is comparatively higher than those in North America, staying at around 4 % liquidity.
Financial institutions in Belize are more likely to offer higher interest rates on certain accounts. By its corporate-friendly environment, Belize also imposes no exchange control on offshore businesses, which means there are no limits on currency movements that come in and come out of the country.
Belize workforce was estimated at more than 190,000 as of September 2019. The country’s minimum wage rate which is the lowest amount legally must be paid for workers is still quite low, at BZ$3.30 an hour ($1.65). Notwithstanding, the living cost in Belize is comparatively lower than that in the US and many other countries. In fact, real estate property is fairly cheap for rental or purchase compared to those in developed nations.
Despite the fact that Belize is not a wealthy country, but it has been doing very well in creating a much attractive enterprise-friendly environment, making it one of the most recommended destinations for foreign investors, entrepreneurs and new start-ups to operate their prospective businesses.
2. Popular types of businesses in Belize for 2020
There are a wide range of options for investors and corporations who intend to carry out their business in Belize. Below we list out some of the most popular business types that you can consider:
- Private company
- Limited liability partnership
- Limited life company
- Joint venture and cooperative
- Sole proprietor
- Public investment company
- International business company
- Trust fund
It is also noteworthy that the International Business Company (IBC) and Limited Liability Company (LLC) is considered to be the most widely-chosen type of business entity in Belize for foreigners. Below are related blogs where you can find out more about these prominent business types:
- From A to Z: Belize international business company (IBC)
- Belize Limited Liability Company (LLC): Why you should consider
To help you well visualize the requirements of doing business in Belize, below is the outline of some basic steps for a business setup in Belize that you need to know. Keep reading!
3. How to set up a business in Belize
Standardized business setup in Belize should be closely tied with a 6-step process as the following:
- Step 1: Register business name with Belize Companies & Corporate Affairs Registry
- Step 2: Submit required documents for the incorporation & Get the certificate.
- Step 3: Acquire a business license or permit, if the business activities that you are intending to operate are required to apply for business licenses as per the laws of Belize.
- Step 4: Register Income Tax and General Sales Tax with relevant departments. NOTE: For offshore company formation in Belize – i.e., you establish a Belize IBC, then you can skip this step as the government will grant the exemption for any form of tax in Belize providing that the company does not conduct business within Belize.
- Step 5: Register with the Belize Social Security Board. This is a must for any business which employs one or more persons.
- Step 6: Register Intellectual Property (Optional). This is not mandatory but it is highly recommended for companies to do so, as it is a good way to protect your business identity.
In fact, business registration in Belize is fairly simple and straightforward. Offshore company formation in Belize is tax-free, no reporting requirements and has guaranteed privacy for directors and shareholders. Only one shareholder and director are required to establish an offshore company, your director and shareholder can be of any nationality. Note, however, that you must have a registered office in Belize and have a local registered agent.
In order to make it easier, you can consult trusted incorporation service providers like BBCIncorp Limited to help you register your offshore company through a transparent and affordable process. Through simplified online steps, what you need to do is to collect the required documents and send them to us. You can feel free of hassles as we will make everything done swiftly. Wish to explore more about our service? Read here.
4. Open an offshore bank account in Belize
Regardless of large or small companies, having a corporate bank account is of vital significance when it comes to doing business in Belize. Being well recognized as a premier financial offshore center, Belize has a very robust and well-regulated banking system, resulting in a large number of wealthy individuals and corporations to keep their funds in Belize banks.
One of the key benefits of opening bank accounts in Belize for foreigners is remote registration. Unlike some banking jurisdictions which require an in-person visit as a pre-requisite condition to open a bank account, you do not need to be physically present in Belize.
Belize is also a more preferred option for offshore bank accounts as it offers a high degree of financial privacy. Evidentially, registered information of companies, foundations and trusts who can be the bank’s corporate account holders would be kept completely confidential and secured, unless there is a request from a court order.
As mentioned earlier, all banks in Belize are required to maintain a 24 percent liquidity at all times. Therefore, you can feel secure with offshore bank accounts in Belize which allows your money to be available at any time.
Opening an offshore bank account is a very good idea, and it should be the very first step along with your investment plan for doing business in Belize.
Need more information about the procedure? You can read our blog: How To Open A Business Bank Account In Belize
It is our hope that the above article can help you to get a comprehensive picture of how you should start your business in Belize. Whether to expand the business internationally or to go offshore with a completely new setup, Belize is relatively a top of choice for foreign entrepreneurs and investors. Feel free to contact us if you need more advice on how to set up the best-suited bank account for your business!