Navigating Belize's Evolving Tax Landscape

Belize's Evolving Tax Landscape

Offshore company registration has become one of the significant business investment routes in the ground of Belize. The jurisdiction is one of the most opted offshore destinations among international business investors.

The International Business Company (IBC) is one of the most widely business entities or structures preferred in the destination.

Over the years, the jurisdiction has been implementing necessary tax reforms. In response to the demand from EU Council and OECD, significant changes were made in the tax treatment for IBC. The IBTA amendment that was released in the year 2018 came into effect in January 2019.

Offshore Company Formation in Belize

Offshoring has been one of the most opted business options that have flourished the national and global economy. Three core acts, namely define the offshoring framework in Belize:

  • The International Business Companies Act
  • The Income and Business Tax Act
  • The Stamp Duties Act

These three acts have helped Belize to gain the title of a tax-haven jurisdiction. Let’s have a look at the changes that will help you to understand the overall impact.

The Changes to Belize Tax Laws

The new amendments have been made to the IBC Act, Chapter 270 of the Laws of Belize, the Revised Edition of 2011. The core grounds where the changes have been documented includes:

1. Abolishment of tax regime

The new tax territorial system mandates the Belize International Business Company, whether held by a resident or a non-resident, to become liable for income tax for carrying out the business operations within Belize.

A Belize IBC held by a non-resident has got specific characteristics that involve:

  • The business structure is not present in Belize
  • The income-generating activities are conducted outside the jurisdiction

2. IBCs are subjected to annual reporting and auditing

With the implementation of the new changes, a registered offshore business unit in Belize are obliged to file annual tax returns and accounting records.

Many offshore tax-havens have got flexible laws when it comes to maintenance of the accounting records. Still, after implementing the rules, IBCs physically present in the jurisdiction need to abide by the Income and Business Tax Act requirement.

An auditing report is to be filled by an entity that holds the following requirements:

  • Listed in the stock exchange
  • Exceeding an annual income of US$6 million
  • Restructuring or proceeding for liquidation
  • If the IFSC regulates the entity

3. Wider scope for IBCs

The new tax regime also has a broader scope of business entering the international market and conducting operations globally.

As compared to the earlier business laws, now a business unit can:

  • Acquire real estate anywhere in Belize
  • Can acquire and hold interest in any Belizan company
  • Business operations can be conducted smoothly with a Belize resident company
  • Offshore banking operations can be performed smoothly
  • Can directly engage into investment trade

4. Abolishment of IP laws

Under the new regime, the Belize IBCs need to abandon all the International Property Assets, and compared to the earlier status; now the IP prohibition is immediately available. The business structures registered before June 2018 are required to submit a record of the intellectual properties that they hold by the end of June 2021.

Implications of the Rules

The new taxation regime has got specific implications that include:

  • A strong international recognition
  • Comply with the global business rules
  • Low taxation scenario
  • The residents can form their IBCs
  • The foreign investors get an exemption on the company incorporated

These amendments will widen up the business opportunities for both national and international investors. The country now once was overlooked, now has numerous benefits in its arena to offer. The taxation laws turn out to be a lucrative option for the investors to step ahead, start an offshore business in Belize, and uplift their future investment portfolio.

If you hold a plan to proceed ahead or want to know more about the same, feel free to discuss the same with our business advisors. Contact us today-we’d be glad to assist!

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