Beforis experts tell about the peculiarities of company registration and advantages of such a decision.
When an entrepreneur wants to register a company in offshore zone, setting up a company in Belize is often considered among the countries traditionally attractive for this purpose. We will tell you how to quickly execute the necessary documents and get the most out of working in this jurisdiction.
Features and advantages of the jurisdiction
This country consistently attracts those who want to set up an international business. The country is located in Central America and English is considered the official language here.
The country is politically and economically stable. The state gives its full support for those who start a business, so registration of a company in Belize is a good decision, especially for those planning to do business in developing countries. The most comfortable form of business registration is International Business Corporation (IBC).
Advantages of the jurisdiction
- Absence of foreign exchange control.
- Maximum loyal tax system: corporate income tax is not imposed on company profit. Only business tax is paid.
- Affordable cost of paperwork and further service of the company.
- The owner does not need to travel personally to Belize to register a business.
- Minimum reporting. Belizean legislation is very loyal to this item. The important thing is that all IBCs annually submit reports to the International Financial Services Commission of Belize. This is done through a registered agent. Report forms are available on the official website of IFSC.
- The register of directors and shareholders of companies in Belize is restricted. In other words, third parties will not be able to watch it without a good reason. Only the Articles of Association and Memorandum of Association are publicly available but they do not have truly significant information about the owners of the company and its shareholders. Registers must be kept by authorized agent of the company. He can provide access to them only at the request of inspection and law enforcement authorities.
- Nominee service is allowed in the country.
- There are no obligations to exchange tax information with many states, including Ukraine.
- In Belize, you can register IBC companies without authorized capital. Also, the authorized capital can actually not be contributed. In this case, the capital is said to be nominal.
- Both an individual person and legal entity can be the director of IBC. No residency requirements.
- Director can also act as a sole shareholder.
- If desired, you can open an account and/or deposit in any bank in the country. In this case, it is better to refuse to use nominee services.
- As for the format of holding meetings, it can be of any kind (for example, by telephone).
Important! In accordance with the requirements of the OECD (Organization for Economic Co-operation and Development), some financial documentation (e.g. receipts, invoices) must be kept in Belize. At the same time, it is not necessary to have all this within the country. In practice, you can simply send a letter to your agent, which contains the address of document storage.
Disadvantages of registration in Belize
One of the main disadvantages of this incorporation is that the country is included in the lists of offshore zones (the Ukrainian list also has the country). This may be alarming for some potential partners.
You should also know the following peculiarities related, mainly, to IBC activities:
- double tax treaties can’t be used;
- Belize is on the list of countries under control over transfer pricing (that is, some transactions of companies of this jurisdiction are inspected by tax authorities to avoid underreporting profits and, accordingly, income tax);
- non-resident companies registered in the country cannot provide services to the local population;
- IBCs cannot buy movable and immovable property;
- your registration address cannot be transferred to other legal entities.
Who is registration of offshore in Belize for?
Companies doing the following kinds of business are often registered in this country:
- outsourcing services;
- various startups;
- call centers;
- holding companies;
- advertising (especially the one working on PPC or CPA model);
- registration of ships;
- games and applications (including online casinos).
Restrictions by types of activities
In this country, it is forbidden to engage in certain types of business without a license. For example:
- legal and accounting services;
- insurance and reinsurance;
- real estate;
- banking sector;
- travel and transport services.
Available business legal structures
Entrepreneurs have an opportunity to register an active company in one of the following formats:
- Limited Liability Company (LLC). In In this case, shareholders are liable for debts and obligations in proportion to their contributions to the authorized capital. In practice, a director, a shareholder and a paid-in capital of USD 1 are sufficient to register LLC. Usually this option is chosen if they want to work with residents of Belize.
- Limited partnership. In this case only one person bears unlimited responsibility - the general partner. He must necessarily be a resident of Belize. Limited partners are liable for their contribution to the capital of the company.
- Trust. Citizens of other countries can organize such a form in Belize. The assets of an organization of this form must necessarily be moved out of the country, and there cannot be residents of Belize among the beneficiaries. This option is suitable for investment, capital management.
- Branch. This form is selected by enterprises already existing in other countries. An indispensable condition is hiring a permanent agent.
- International fund. To formalize your activities in this way, you need a founder. He selects and appoints a management board and an authorized agent. The international fund is convenient for management of capital.
- Representation. In Belize, such firms may conduct research or promote the parent company. But nothing can be produced or sold. A representative office also needs an authorized agent to operate.
- International Business Company (IBC). Such companies can conduct international activities, but they can be organized by non-residents. The requirements for incorporation are maximally simple: a director and a shareholder are enough (these can be individual persons and legal entities), as well as paid-in capital in the amount of 1 USD.
To register an office, you will need to hire an agent. But a secretary is not required. IBCs in Belize do not pay taxes on profits earned outside the country, and if the company is a tax resident of another state, then there is no need to pay Business tax. Therefore, many entrepreneurs choose this form to register a company.
One of the arguments in favour of registration of offshore in Belize is local principles of tax calculation. They are regulated by the Income and Business Tax Act (IBTA) — Law on Income and Taxes.
The country maintains a double taxation system where businesses pay Corporate income tax (CIT) and Business tax.
Corporate income tax (CIT)
The basis for calculation is the entire taxable income of the company, general rate is 25%.
This type of tax applies only to oil companies, the rate is 40%.
The basis for calculation is gross income or turnover of the company. The rate varies from 0.75% to 25% and depends on the source of income.
It is levied on the income of individual persons and legal entities, regardless of whether the funds were received in Belize or outside of it. This rule is valid from January 1, 2020.
Business tax is exempt from:
- Oil and gas companies;
- Business operating within Designated Processing Area, — national program to support specific activities;
- Tax residents of other jurisdictions.
Based on the points described above, it turns out as follows: IBC may not pay Business tax only if it proves that it is a taxpayer of another country. However, it is worth noting that while Belize does not have a clear guide on the procedure and period of confirmation of foreign tax residency.
- GST is similar to VAT. The rate is 12.5%;
- There is no capital gains tax;
- Tax on dividends that IBC receives from residents - rate is 15%.
Reporting and audit
Both residents and non-residents of the country must maintain accounting records. Despite the loyalty of the requirements, this should not be neglected. Such documents will help if in another country you need to prove that the money was earned in a fair way.
In addition, Belizean legislation provides for audits. The tax commission of the country initiates them in several cases:
- IBC earns income, the amount of which is more than 6 000 000 USD;
- Profits of the company, which is operating in the technical zone of Belize, for the year exceeded 250 000 USD.
Business can also be checked, if the legal entity:
- must file consolidated financial statements;
- conducts activities that are subject to licensing;
- is registered on the stock exchange;
- is in the process of liquidation, restructuring or sale of assets at auction.
Features of company registration
When registering a company in Belize, as in other jurisdictions, it is important to choose a unique name: it should not repeat or strongly resemble the existing name. It is also not allowed to use words that imply patronage of the Government of Belize. If desired, name can be changed at any time.
The name can be in any language. The words Limited, Corporation, Incorporation, Société Anonyme and abbreviations Ltd, Corp, Inc., S.A., AG are allowed in the name.
Application for a name registration is filed with the Companies Register.
- Variants of names. You can have them as many as you want and they should be listed in priority order.
- Description of the activities of the future company.
- Notarized colour scans of passports for travel abroad (it is very important that the certification is in English) of the director and/or shareholders who are individual persons.
- Bank statement or utility bill. Both documents must be issued no later than 3 months before submitting, certified and translated into English.
- Apostilled corporate documents, if the director and/or shareholders are legal entities:
- Memorandum of Association and Charter (approved in the Register of Companies);
- Documents of final beneficiary and shareholders (notarized colour scans of passports for travel abroad and a bank statement or utility bill issued within the last 3 months (in English).
Registration cost and terms
Registration usually takes no more than 7 business days. The total cost will depend on whether you need delivery of documents, apostille, nominee services, printing, bank account, general power of attorney and other additional services.
The sum to be paid depends on the amount of authorized capital:
- 100 USD shall be paid, if the authorized capital is no more than 50 000 USD, while only nominal value of all shares is allowed;
- 350 USD shall be paid, if all issued shares (or part of them) have no nominal value and the authorized capital does not exceed 50 000 USD; the same amount is paid if there is actually no authorized capital, and all shares have no nominal value;
- 1000 USD shall be paid, if the amount of authorized capital is over 50 000 USD;
- 4000 USD shall be paid by the companies registered as public investment company.
Services of Beforis
If you need to register a company in Belize, but do not have time to prepare all necessary documents and get into the details of registration, we can do all this for you.
We accompany the entire process and take care of communication with government authorities. We will also help you with checking uniqueness of the name, prepare a package of necessary documents, translate and certify them with a notary. In addition, our company provides customers with a registration address and services of registration agent.
So, you’ll need a minimum of effort. Do you have any questions about registering a company in Belize? Please leave a request through the form below and our manager will contact you.