Offshore business in Belize
Belize is a beautiful by nature, independent country located on the Caribbean coast of Central America. It offers the visitor myriad faces, from virgin rainforests teeming with wildlife, to fantastic white sandy beaches, the largest Barrier Reef in the New World, mysterious Mayan Ruins and Caves, hundreds of offshore islands and a relaxed Caribbean lifestyle. This young nation is in a dynamic process of development and has introduced the most modern legislation tailored at offering the very best and secure offshore financial services.
The total population is estimated at 250,000. Belmopan is the administrative capital and the seat of government. Belize City with a population of 60,000 is the major commercial centre. Belize's population is ethnically diverse. The single largest population group is Hispanic followed by Creoles (African-European), Maya Indians, Garifunas as well as many immigrants from North America, Europe, the Middle and Far East. The official language spoken is English but Spanish is widely spoken and many Belizeans are bilingual in English and Spanish. The Climate is sub-tropical with an average temperature of 80OF.
Belize enjoys a long history of peace, stability and democracy and is sometimes referred to as the Switzerland of Central America. It became a British Crown Colony in 1862 and achieved complete self rule in 1981. Belize is a member of the British Commonwealth, the United Nations, the Non-Aligned Movement, the IMF, the Organization of American States, and the World Bank.
The political system is based on the British Westminster Model with Queen Elizabeth II, represented by a Belizean Governor General, as titular Head of State. Executive authority is exercised by the cabinet under the leadership of the Prime Minister. Legislative authority vests in a 29 member House of Representatives elected by universal adult suffrage every five years. In addition there is an 8 member Senate with the majority appointed on the recommendation of the Prime Minister.
There are two main political parties, and in the most recent national elections in August 1998, the government changed to the Peoples United Party after fives years of rule by the United Democratic Party. Both parties are committed to the economic development of the country.
The law of Belize is derived from English common law, supplemented by local legislation. The court system is also similar to that in England, and contract and commercial is based on the English law model.
Currency and Banking
The local currency is Belize Dollar which is tied to the US Dollar with a fixed rate of BZ$2.00 = US$1.00.
Business and the Economy
The Belize Government promotes development by means of a mixed economy in which the public sector carefully utilises foreign borrowing, mainly on concessional terms, for infrastructure development as well as for private sector support. The GDP growth has averaged 8% per year over the last three years with tourism as the major economic activity followed by agriculture but with an increasing contribution from seafood exports.
Agricultural economic performance is based on sugar, citrus and bananas. Other significant exports are lobster, shrimp and garments.
Belize benefits from a number of preferential market access arrangements particularly with the US, Canada and the European Economic community through its British links.
The Ministry of Economic Development operates a comprehensive investment scheme which is available to Belizean and foreign investors alike. This provides for a tax holiday for up to 15 years and up to 100% exemption from trade taxes on import of capital equipment and raw materials. Under this investment scheme there are no restrictions on the repatriation of profits, dividends, fees, capital (including capital gains) arising from foreign investments in the country provided all such investments are registered with the Central Bank.
International Business Companies
The International Business Companies Act 1990 of Belize created a special category of company known as an International Business Company (IBC). The law was enacted to permit asset protection and tax minimization planning at competitive rates. Some of the attributes of the Act are:
- IBCâs have total exemption from all forms of local taxation including Stamp Duty.
- Speedy and simple registration.
- Only one subscriber is required; thereafter one shareholder and one director are required.
- There are limited filing requirements, mainly certificate of incorporation, memorandum and articles of association.
- No exchange control.
- Low registration fee for new incorporations.
- Low continuation fee.
- IBCâs can be registered in any language and company names may be registered in the language of origin.
- Limited Life Companies and much more.
The Belize Trusts Act of 1992 is based on the Guernsey Trusts Law of 1989 but with various amendments and innovations. The Act contains substantial "asset protection" provisions. Section 7 (6) provides that a disposition of property into a trust governed by the law of Belize may not be set aside to satisfy the claim of a divorced spouse, disinherited heir, or creditor in a bankruptcy.
Other benefits of a Belize Trust include exemption from all local taxation including duties charged on the death of the settlor or beneficiaries. Belize, with the protection provided by its modern Trust law, is the ideal jurisdiction to establish an offshore trust.
Foreign Currency bank accounts: A full range of international banking services including foreign currency deposit and checking accounts earning tax-free interest are available. Such accounts are offered to IBCs and trustees. International Visa Cards: U.S. dollar-based international Visa cards with worldwide acceptance are available. This provides an effective and flexible link into a foreign currency account and can also be operated on a stand alone collateral secured basis.
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