Belize is an independent state in Central America that earned international recognition in the 1990s when it became possible to register offshore companies there. The flexibility of the corporate legislation and the moderate cost of company registration and maintenance attract a great number of foreign entrepreneurs to Belize. Companies registered in the country trade in various goods, provide services, participate in investment projects and financial operations, open bank accounts in Belize and other countries, and own property. Belize is a jurisdiction with a vibrant business environment.
Registering an International Business Company in Belize
An International Business Company (IBC) in Belize is a powerful business instrument that allows engaging in various types of entrepreneurial activities. The standard package of documents required for registering an IBC in Belize includes the following documents:
- Certificate of Incorporation;
- Memorandum and Articles of Incorporation;
- Appointment of First Director;
- Apostilled Set of Corporate Documents;
- Intellectual Property Assets Grandfathering Program (IPAG);
- Director’s Resolution to Issue Shares;
- Director’s Resolution on the registered legal address (where the company documentation is going to be kept);
- Director’s Consent Letter;
- Director’s resignation letter with an open date (if nominee director services are used);
- Director Resolution to Appoint New Director with an open date (if nominee director services are used);
- Register of Company Directors;
- Register of Company Members;
- Share Certificate(s);
- Agreement for the Provision of Director Services (if nominee director services are used);
- Declaration of Trust (if nominee shareholder services are used);
- Power of Attorney.
The charter capital of the IBC has to be declared but it does not have to be deposited. No minimum charter capital is set in Belize but the amount of the annual duty will depend on the amount of the declared charter capital.
Shares may be paid for in cash, services, obligations (promissory notes), movable and immovable property, and objects of intellectual property.
Since June 2018, Belizean-registered IBCs are not allowed to issue bearer shares. The companies that did have bearer shares had an opportunity to convert them into registered shares. Bearer shares that had not been converted into registered shares are invalid now. You can learn more about the recent changes in the Belizean corporate legislation if you follow the link.
Annual state duty
The annual state duty depends on the amount of the declared charter capital:
· Companies with charter capital of up to 50,000 USD pay 150 USD per year.
· Companies with charter capital above 50,000 USD pay 1,000 USD per year.
If a company fails to pay the state duty on time, a 50% fine is imposed.
Legal types of business activities
Any type of business activity is legal in Belize if it is not prohibited by law.
A license is required if you would like to provide banking, insurance, and reinsurance services or create a trust.
In accordance with the amendments to the Belizean Act on IBCs made in 2018, International Business Companies are now allowed to enter business agreements with residents of Belize, own property in the country, and shares of locally-registered companies. Besides, citizens of Belize can be beneficial company owners too.
Taxes payable by IBCs in Belize
An IBC is almost totally tax-exempt in Belize if it does not perform business operations in the country. The annual state duty is the only payment to be made. If the company does perform business operations in Belize or enters business agreements with local residents, it is taxed at a standard rate. The tax rate depends on the business sphere that the company works in.
The process of company formation in Belize
Your personal presence is not required if you would like to form a company in Belize. A Registered Agent will file an application for company formation to the Registrar also supplying the Memorandum of Association and the Articles of Association. He or she will also pay the company registration duty on your behalf.
Requirements to the IBC name
The official name of the company has to be spelled in Latin letters. Its alternative name can be spelled in any way. The company name cannot be identical to the name of an existing company nor can it resemble such a name. A company name that is improper, degrading or offensive in the opinion of the Registrar cannot be used.
A postfix to the company name has to indicate that the company has limited liability. Any of the following postfixes is acceptable: Limited, Corporation, Incorporated, Société Anonyme, Sociedad Anonima, Gesellschaft mit beshränkter Haftung or the acronyms Ltd, Corp., Inc., SA, or GmbH. The company name cannot contain the following words unless it holds a corresponding license: Assurance, Bank, Building Society, Chamber of Commerce, Chartered, Cooperative, Imperial, Insurance, Municipal, Royal, Trust Company, Trustee Company.
Any company name that can be associated with royal or governmental patronage is unacceptable.
Requirements for forming a company in Belize
The Memorandum and Articles of Association, the name of the Registered Agent, and the company legal address in Belize have to be submitted to the Registrar to make company formation possible.
The company has to have at least one director be it a natural person or a legal entity. There are no restrictions as to the nationality or residence of the company director.
The first company director is appointed by the company founder and then the director appointment can be the prerogative of the shareholders or the Board of Directors depending on the conditions specified in the Articles of Association and/ or company By-laws.
The authorities if the company director are defined in the IBC By-laws. If the authorities are distributed between the shareholders and the directors, all undistributed authorities lie with the company director(s) by default.
As a rule, company directors have the right to convene a general meeting of shareholders. However, if shareholders who have more than 50% of the voting shares issue a letter to the directors calling them to convene a general meeting, the directors have to obey.
The scope of the directors’ authorities has to be clearly defined in the company’s corporate documents to avoid misunderstanding.
Shareholders and Board of Directors’ meetings have to be held annually but they can be held in any country, not necessarily in Belize.
A company registered in Belize has to have a registered legal address in the country.
Economic substance requirements
Since March 2019, all companies registered in Belize also have to have some ‘economic substance’ there. Holding companies are an exception from the rule. Economic substance in Belize includes the following items:
· A sufficient number of personnel. The minimum number of company workers in not specified in Belize. There are also no restrictions as to the place of their residence.
· Expenditures in Belize that correspond to the types of the company’s business activities.
· Company controlling and managing body has to be located in Belize.
· The company’s corporate documents, financial statements, and other records have to be kept in Belize. They have to be submitted to the authorities of the country on an official request.
· The company has to directly or indirectly use facilities and equipment located in the territory of Belize.
Admittedly, the economic substance requirements make Belize a less attractive jurisdiction for foreign entrepreneurs but such are the global policies: all offshore jurisdictions now put forward some economic substance requirements. As far as Belize is concerned, the timeframes of economic substance acquisition are not specified in the local corporate legislation, which leaves some space for maneuvers. In any case, the beneficial taxation regime in Belize is probably the most important advantage that the country boasts.
