There are a dozen questions I am frequently asked, with the number one being “Why do you promote offshoring?” There are two reasons behind this question. First, people don’t know about offshoring so they are curious to learn about it. Second, they think offshoring is illegal so they’re probably judging me for endorsing it.
Some influential names from across the globe have been offshoring for all the wrong reasons that have created a negative buzz around it. While these cases involved money laundering, corruption, and fraud; offshoring in itself is a legal and ethical process.
According to a HuffPost article, asset protection, investment diversification, and navigating inheritance laws are some legitimate reasons why people turn to offshoring. According to the Telegraph, offshore financial activity is legal and necessary for efficiency in global business.
Now that I’ve maintained the legitimacy of offshoring, let’s turn our attention to our topic of the day: Belize.
Belize, At A Glance
Belize is a lesser-known tax haven located on the east of the Caribbean shore in Central America. It offers tax advantages to individuals and businesses who want to establish an offshore company for personal and commercial use.
It’s a former British colony that has its legal system based on the English Common Law. The country has a long history of peace and tolerance. Despite having one of the smallest populations in the world, Belize has rich cultural diversity with people from different ethnic backgrounds including Spanish, Chinese, Indians, Syrians, Koreans, Americans, Taiwanese, and Lebanese.
The economy of Belize is very stable, based on various sectors like agriculture, tourism, banking, and construction. A major proportion of the country’s earnings come from the offshore industry so the government and the general public are supportive for developing Belize as an offshore financial centre.
The Belize International Business Companies Act of 1990
An IBC, or an International Business Company, is an offshore company formed in a tax neutral setting so the company is not liable to pay the taxes under the jurisdiction of the country it’s incorporated in. The names of owners, investors, and shareholders are kept confidential.
The offshore companies in Belize are incorporated under the Belize International Business Companies Act of 1990. This act was adopted in 1990 and expanded further in 2000 to make Belize a friendlier location for corporations by eliminating barriers and creating different investment opportunities. Belize IBC Act is considered one of the most comprehensive and modern legislation for offshore companies.
Advantages Of Belize IBC
Belize IBC offers a number of advantages to the offshore companies. They’re explained below:
Belize IBCs are exempt from all kinds of taxes including taxes on dividends, income, capital gains on shares, debt or other securities. They’re also not required to file an annual tax return.
The Company is not required to declare the names of owners, directors, and shareholders at the time of registration. Furthermore, there’s no requirement to publish any kind of public declaration about sources of income. The only document kept for a public record is the Memorandum of Understanding.
Belize has the simplest and fastest registry process for offshore companies. It’s based on a computerized system that allows incorporation of a company in less than 24 hours.
The costs for incorporation are among the lowest in the world. The first year incorporation and management fee can be as low as $1200 and $600 from the year after. The government license fee is also fixed. An IBC with a minimum capital of $50,000 is required to pay $100 annual fee in the first year and $150 from the year after. IBCs whose capital exceeds $50,000 are required to pay a $1000 annual fee. IBCs whose shares have no par value are required to pay only $350 in annual fees.
Requirement For Directors:
Only one director is required to incorporate the company and doesn’t have to be a resident of Belize.
No Minimum Capital Requirements:
The owner of the company can write any amount in the incorporation documents and there’s no timeframe within which the shareholders are required to pay this capital. The capital of the company can be expressed in any currency.
IBCs can open bank accounts in Belize and anywhere in the world in any currency. Banks in Belize set can up an account without the owner being physically present in the country. They also offer high-risk merchant accounts for industries like pharmaceuticals and gambling.
IBCs can conduct its business activities in Belize or choose to have no physical presence in the country and conduct its business anywhere in the world. The meetings of the company can be held in any country and may be attended by a proxy.
Transfer Of Funds:
A Belize IBC is not required to obtain the approval for transfer of profits, interest, dividends, and royalties when the company has no physical presence in Belize. Offshore companies are exempt from the transfer of funds controls and currency exchange in Belize
Banking Laws In Belize For Offshore Companies
Belize has an excellent international banking system for investors and offshore companies. Some of the features are listed below.
Belize Banking Is The Safest In The World:
The investments are closely monitored by the Central Bank and audited once a year to ensure compliance with the regulations. Banks in Belize are required to keep a set liquidity ratio of 24%, which is far higher than in many other countries. The banks are also required to maintain a set percentage of cash reserves, which gives the customers confidence that they can withdraw their money even during a global financial crisis.
The account owner doesn’t have to conduct business in Belize to open international business accounts and the banks are required by the law to keep the information of account holders confidential.
The banks in Belize offer a wide range of international banking services and asset protection features. The Belize banking system doesn’t recognize any foreign judgments against the Limited Liability Companies that would order to freeze the owner’s assets.
Legislations like the Money Laundering and Terrorism (Prevention) Act ensures that the investors are in line with the jurisdiction and the offshoring process remains legitimate in Belize. All in all, Belize is undoubtedly a premier location for financial offshoring.
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