Offshore Company Formation - Belize

Background

Located in Central America, bordering the Caribbean Sea, between Guatemala and Mexico, Belize was the site of several Mayan city states until their decline at the end of the first millennium A.D. The British and Spanish disputed the region in the 17th and 18th centuries; it formally became the colony of British Honduras in 1854. Territorial disputes between the UK and Guatemala delayed the independence of Belize until 1981. Guatemala refused to recognize the new nation until 1992.

In this small, essentially private-enterprise economy, tourism is the number one foreign exchange earner followed by exports of marine products, citrus, cane sugar, bananas, and garments. The government's expansionary monetary and fiscal policies, initiated in September 1998, led to sturdy GDP growth averaging nearly 4% in 1999-2007. Oil discoveries in 2006 bolstered the economic growth in 2006 and 2007. Major concerns continue to be the sizable trade deficit and unsustainable foreign debt. In February 2007, the government restructured nearly all of its public external commercial debt, which will reduce interest payments and relieve liquidity concerns. A key short-term objective remains the reduction of poverty with the help of international donors.

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The Offshore Company or International Business Company (IBC) as it is called in Belize is a liability company which is tax-free and exchange-control-free incorporated under the Law of Belize but conducting all its profit-earning activities outside Belize.

Why you May Need an Offshore Company

The IBC is an ideal tax planning vehicle which can be used for a wide range of commercial activities such as trading, share ownership in other companies, financial management, investment holding, corporate trustee, leasing of other assets, property ownership and ownership of intellectual property.

I. Why Incorporate in Belize?

a. Cost-Saving Factors:

The provisions of the IBC law in Belize are specifically designed to save you costs. This is accomplished firstly by ensuring that the registration fee is the most competitive in the offshore world. Secondly, by ensuring that the costs of maintaining your IBC are kept to a minimum. Here’s how this is accomplished.

1. No minimum capital requirement
2. No requirement for audited accounts therefore no need for an auditor
3. No need for annual returns thereby saving legal fees
4. No requirements for a local director or secretary thereby saving significant fees
5. No requirements for an Annual General Meeting. Directors can participate in a meeting anywhere in the world by telephone.

b. Confidentiality Factors

In an age of increasing regulation by the State – and increasing taxes –Belize’s IBC law has as its tour de force a number of provisions to ensure the freedom of the individual and the sanctity of private commercial transactions:

1. The share register kept by the company may only be inspected by a shareholder
2. There is no restriction on nominee shareholders and bearer shares may be issued
3. No filing of Accounts or Annual Returns
4. No public filing requirements except memorandum and articles of association.

c. Special Features

Mindful of the need for flexibility to enable our investors to respond to new investment opportunities as they arise, Belize added the following special features to its law.

1. Only one shareholder required
2. Only one Director required which may be a company
3. Shares may be denominated in any currency and may be bearer or registered shares, voting and non-voting, with or without par value
4. Your IBC be able to purchase its own shares and redeem its own shares.

Requirements

Since an IBC essentially for offshore activities, your IBC cannot own land in Belize nor carry on banking business as an insurance or re-insurance company or business as a registered office for companies in Belize. Neither can the IBC carry on business with residents of Belize. Your IBC must have a registered office and registered agent in Belize.

Permissible Activities

Note, however, that your IBC can engage in any of the following activities in Belize:

1. Operating an account with a local bank
2. Using the services of Belizean professionals and trust companies
3. Keeping company records and holding meetings in Belize
4. Holding shares in other IBC’s or local companies
5. Owning a vessel registered in Belize.