Owning Real Estate Through a Belize IBC: Basics That You Should Know
Owning Real Estate Through a Belize IBC: Basics That You Should Know
You already know that offshore investing is a smart move. What you may not know is that setting up an International Business Company (IBC) in Belize provides quite a number of benefits. The ability to own and maintain real estate is one of them.
Whether you’re seeking ways to amass wealth to use in the short-term or preparing a nest egg for retirement, this is a strategy that you should consider carefully. Here are some of the basics about establishing an IBC in Belize and what it could do for you.
What is an International Business Company?
Before getting into the merits associated with a Belize IBC, it’s a good idea to gain an understanding of what constitutes an International Business Company. An IBC is a corporation that is established for the purpose of conducting business that’s primarily located outside the country of incorporation. Within the nation where the IBC is incorporated, it’s possible to establish offices that manage operations based in other countries.
Over time, some nations have made changes in what sort of business operations an IBC can conduct domestically. Belize happens to be among them. For that reason, it’s important to be up to date on what sort of business activities are currently considered legal within the country.
Understanding the Basics of the International Business Companies Act
The formation and function of an IBC in Belize is laid out in the International Business Companies Act. Originally adopted in 1990, the Act has been amended a few times. The amendments typically had to do with allowing Belize to remain competitive in the offshore market, and to provide benefits that are in the best interests of the business owners and the citizens of the nation. Amendments dating from 2000 and 2011 helped to make Belize one of the most attractive options for incorporating an International Business Company.
As the government continues to refine and expand the benefits available to IBC owners, additional legislation is likely to be passed into law. The most recent changes during the calendar year of 2019 did away with some of the restrictions that IBC owners had to observe in the past.
The 2019 Changes to the International Business Companies Act
The 2019 Amendments to the IBC Act gave several key advantages to offshore business owners that are not found in many other offshore havens:
- IBC owners can now buy real property in whole within the country. That includes residential properties. The IBC owner can also secure partial interest in business and residential properties within the country.
- Through an IBC, the owner can now hold partial interest in any company that has a presence within the country. That includes international firms that are established in Belize as well as domestic businesses and may hold real estate and one of the holdings.
- The IBC can now conduct business with any resident of Belize.
- An IBC can now establish bank accounts with any bank based in the country, with the deposits counted as Belizean currency if they so choose.
- The owner can also pursue investment options that are based in Belize as well as investments that are based in other parts of the world. Those investments include domestic real estate, including undeveloped tracts of land.
Why Set Up the IBC in Belize?
While it’s possible to set up an IBC in several countries, Belize provides quite a few benefits that may or may not be found elsewhere. Along with the provisions found in the 2019 amendment, the reputation of Belize is a major draw. The country is known for establishing and holding all business owners to a high ethical standard.
It doesn’t hurt that the banking industry provides a great deal of transparency to those who have personal and business accounts at the domestic and international banks. You’ll find that understanding the laws that govern your investment accounts and even your personal savings and checking accounts is not difficult at all.
Along with the honesty factor, the fact that English remains the official language of the country makes communications much easier for offshore company owners. The country also conducts business using the U.S. Dollar as the standard. While some transactions, including those that have to do with domestic real estate, are ultimately transacted in Belizean currency, the process is more streamlined than you will find in many other countries.
Don’t overlook the low entry requirements and the fast incorporation process. Someone who wishes to establish an IBC can do so with a single director. That director may be a resident of Belize or a corporation. It’s possible to complete the incorporation process in a single business day, with a cost of around $100 USD.
Understanding the IBC Licensing Fee
Belize does assess a licensing fee. This is not to be confused with a tax. The fee is due annually and must be tendered by the registration owner.
One of the things that you should understand is that the fee is not fixed. Instead, the amount owed will vary based on the income generated by the business during the most recently completed business year. That’s good news if your real estate holdings do not perform at a consistent rate from year to year. This approach helps to alleviate undue financial stress on a company that did not generate a lot of revenue during the period under consideration.
How does the fee compare to other offshore havens? In Belize, it could be as low as $100 to 200 USD and by contrast, other jurisdictions may assess annual flat fees in the $400-500 USD range if not higher. Depending on the nature of the property and what you do with it, your obligation in Belize could trend toward the low end of the scale.
Can the Real Estate Investments Include Homes or Condos?
Current laws do allow IBC owners to acquire residential properties as well as commercial properties. You may think that the acquisitions must have to do with operating rental properties. While that may be true in some parts of the world, it’s not the case in Belize.
What would happen if you purchased a condo or a home with the intention of eventually retiring to Belize? Between the acquisition date and the retirement date, you could rent out the property and allow it to generate revenue on your behalf. Do block out dates when you want to use the property for vacations. Once you do retire, it’s easy enough to declare the residence to be your permanent address.
Get Your Dream Home Now
Belize offers a wide range of financial options that help you build wealth now and enjoy a comfortable retirement. Rather than having to wait to purchase your dream home, consider setting up an IBC and include real estate in the investments you choose to acquire.
You’ll find that real estate personnel, as well as investment brokers and bank managers, will help you understand how to comply with current laws and create a sound financial future.
I hope you got value from this article: Owning Real Estate Through a Belize IBC: Basics That You Should Know. Please reach out to Luigi HERE to open a bank account in Belize. Here are a few additonal articles on Belize and real estate, enjoy!
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank, a FinTech School Instructor and the published author of The Digital Banking Revolution – now in its third edition. You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege
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