Belize Summary

Belize is a small Sovereign Nation on the eastern coast of Central America, on the Caribbean Sea bordered by Mexico to the northwest and Guatemala to the west and south. The country is a parliamentary democracy and constitutional monarchy which recognizes Queen Elizabeth II. The nation of Honduras lies 75 km away (47 mi) across the Gulf of Honduras to the east. The name is derived from a Mayan word for the Belize River as 'muddy color', after which Belize City, the former capital and largest city, is also named.

The only English-speaking country in Central America, Belize was a British colony for more than a century and was known as British Honduras until 1973. It became an independent nation in 1981. Belize is a member of Caribbean Community (CARICOM) and the Sistema de Integracion Centro Americana (SICA) and considers itself to be culturally both Caribbean, and Central American.

Belize Tax Haven Companies

Belizean laws allow for the following categories of business ownership:

• International Business Companies - IBC
• Limited Liability Partnership - LLP
• Limited Life Companies - LDC
• Joint Ventures and Cooperatives
• Partnership
• Sole Proprietor
• Public Investment Companies
• Private Companies
• Trust Funds

However, almost all offshore or foreign businesses use the International Business Company or Trust forms, sometimes in combination.

International Business Company

An International Business Company (IBC) is formed under the International Business Company Act 1990. An IBC is formed by filing Articles and Memorandum of Association along with the required fees. The following are the main characteristics of an IBC:

• There is no minimum paid up capital requirement, and capital may be expressed in foreign currency;
• An IBC may issue bearer shares and shares of no par value;
• but bearer shares must be held in the custody of a local registered agent;
• Subscribers may include an individual, a corporation or a Trust;
• A company may have nominee shareholders using local licensed registered agents;
• There is a minimum of one director, who can be an individual or a corporation;
• A secretary is not required (but can be useful);
• Each company must maintain a Registered Agent and a Local Registered Office using licensed individuals or companies - these are the only details about an IBC that are available on the public file;
• There are no requirements for an IBC to file details related to shareholders or directors or for the filing of audits or accounting reports;
• No meetings are required of directors or members;
• There are no exchange controls for an IBC;
• Foreign companies may continue (re-domicile) as Belizean IBCs, and vice versa.

The IBC act prohibits an IBC from:

• Carrying on business with persons resident in Belize;
• Owning an interest in real property situated in Belize, except lease property for office purposes;
• Carrying on banking business;
• Carrying on insurance or reinsurance business;
• Carrying on the business of providing registered agents/offices for companies.

Otherwise, a Belize IBC may engage in any activity that is not unlawful in Belize.

Belizean IBCs are specifically exempted from any form of income tax, capital gains or transaction tax. Any IBC can conduct its business in any foreign currency it may choose free of the Belizean government regulation or restriction.

Among the many uses of IBCs are:

• to establish securities trading accounts in the United States, Canada and Europe, either directly or through Belizean intermediaries;
• to hold title to real estate in jurisdictions other than Belize;
• to collect commissions, royalties or dividends or to re-invoice trade transactions.

Trusts established under Belize law (see below) often incorporate a Belize IBC which serves as an asset-holding device for the trust. This provides an added layer of insulation, allowing the trust to withhold details of its existence and beneficiaries from third parties such as bankers or brokers dealing with the IBC.

The Belizean IBC is a comparatively cost-effective vehicle - first year costs for incorporation and management may be as little as US$1500, with ongoing costs of only $900.

In addition, Belize's legislation facilitates speedy and simple incorporation, and its modern and computerized IBC Registry is capable of incorporating a company within one hour.

Belize Offshore Trusts

Belizean trusts are governed by the Trusts Act, 1992, which was designed to incorporate modern and flexible asset protection provisions. A validly set up Belize trust may not be set aside on the basis of claims from creditors in another jurisdiction, or the order of a foreign court on account of divorce, bankruptcy, etc.

The Act provides for the creation of a trust (other than a unit trust) by oral declaration, an instrument in writing (including a will or codicil), conduct, operation of law, or in any other manner whatsoever. A unit trust, however, may only be created by an instrument in writing. A trust (other than a constructive trust) over land situated in Belize is not enforceable unless evidenced in writing.

Registration of trusts is optional. Either the settlor or a trustee may apply to the Registrar. If a trust is registered, a certified copy of the instrument creating the trust (if any) needs to be submitted along with a fee of US $200. The Register is not open for inspection except when the trustee of a trust (in writing) authorises a person to inspect the entry of that trust on the Register.

The maximum duration of a trust (other than charitable trusts) under Belize law is 120 years from the date of its creation. Trust income may be accumulated for a period not exceeding the maximum duration of the trust.