Belize Companies

On August 5, 2022, the Belize Companies Act, 2022 (“the Act”), was passed into law. The Act streamlines, clarifies, and enhances the management of the affairs of Belize Companies and Corporate Affairs Registry and repeals and replaces the International Business Companies Act, Cap. 270, and the Companies Act, Cap. 250. The adoption of this law is a crucial milestone in the reform and strengthening of Belize’s corporate law regime, enhancing investor confidence and competitiveness while fostering a culture of certainty, digitization, and innovation. It also strengthens conformity with international standards. Some other advantages of the new Act are

• the Act is one comprehensive document; so, its easier to navigate through and interpret
• the introduction of purpose companies (such as Private Trust Companies and Segregated Portfolio Companies)
• Articles of Incorporation (which has replaced the Memorandum of Association and Articles of Association) gives the company more flexibility to tailor the nature of its business activity without needing to amend its constitution.

The OBRS also boasts some of its own advantages, including

• quicker turnaround time on transactions
• less paperwork (the Certificate of Registration can also be verified by way of a QR Code)
• the possible elimination of courier fees (since physical copies will no longer be facilitated unless upon special request).

Some of the key provisions within The Act are:

Re-registration

All companies formed under the International Business Companies Act, the Companies Act Cap. 250, and the Business Names Act, CAP 247 will need to reregister with the Online Business Registration System (OBRS) under the Business Companies Act, 2022. Companies have 12 months to register with no registration fees. After November 28, 2023 re-registration will have an accompanying cost.  

Business Entity Re-Registration Form

Transfer In Form

Annual Returns

Companies will be required to file their Annual Returns once annually.  The purpose of the Annual Return is to confirm the structure of the company for the previous year for the period of 1^st January to 31^st December; hence, renewing the company. The Annual Return is due by the 30^th of June each year. The concept of the Annual Return is the same as the annual renewal concept – except that the registered agent will also be confirming the company’s structure with the registry and its economic substance position on an annual basis.

Financial Records

The new Act makes modifications to the paperwork and records that companies must keep on file at the registered office. While some want to maintain their financial records outside, others keep them in Belize. The new Act makes it obligatory to preserve copies of specific documents within Belize.

A written record of the physical location of records kept outside of Belize must also be kept at the registered office. The other is to have copies of every transaction that may be used to correctly determine the financial health of the business.

Liquidation

The new Act has put forward a more simplified process of liquidation, removing the 30-day waiting period. While this does not mean that the process will have no compliance oversight it does facilitate easier debt repayment and recovery for business owners.

Tax Requirements

Statutory annual tax filing deadline is 31 March, unless otherwise approved by the Director General of BTS. Each company has between January to 31^st March to report on its tax filing for the preceding fiscal year from January to December 31^st.

When completing the annual tax filing (BTS 290 form) all necessary information including your TIN must be inputted.

Enter annual revenue per revenue type and compute the tax payable for respective revenue type using the applicable rates. Compute Total Revenue/Tax Payable by totaling revenues and tax payable.

Rates are as follows:

Overdue payments/filings are subject to fines as per the below:

Late or non-filing: 10% of the tax due for every month or part of the month that the return remains outstanding, minimum of $10.00. For maximum of 24 months.

Late or non-payment: 1.5% interest per month on all unpaid balance from the time it was due up to the date of payment.

 *Adjustments can be made by offsetting Tax Payable with credit against tax paid on foreign sourced income. Provide a summary of Revenue Type, Revenue Amount and Taxes paid in a foreign jurisdiction. Proof of payment must also be provided.

 All annual tax filings must be accompanied by a copy of Financial Statements. Audited Financials are required for some companies in accordance with Section 32A (1) of the Income and Business Tax (Amendment) Act, 2018.

Companies which require audited financials include:

• Companies with receipts of at least $6,000,000US
• Companies operating in a designated processing area with receipt of at least $500,000
• Any other appropriate entity which meets at least two of the below
• Entities listed on approved stock exchange
• Entities undergoing restructure and liquidation or proposing to sell all of its assets through an auction
• Entities regulated by the Financial Services Commission
• Entities and organization subject to preparing consolidated financial statements or
• Any other business entities

A corporation that is subject to taxation in another country may apply to the tax department for a tax exemption certificate, which can only be granted with the FSC’s approval and must be renewed annually. If the tax exemption is approved, the business will file an annual information return rather than a tax return to confirm the status of the company.

Annual Tax Return Form

Tax Identification Number (TIN)

Every company must obtain a TIN. To obtain a TIN the company must be in good standing in the year of application, the completed TIN form along with the necessary fee is submitted to the Belize Companies and Corporate Affairs Registry (BCCAR). If the company has a corporate shareholder/director the application must be accompanied by the Certificate of Incorporation for that shareholder/director. 

*At this time BCCAR is not facilitating new TIN applications as it is in the process of updating the system, once completed we will resume the service.

Tin Application Form

Economic Substance Requirements and Procedures

Each company is required to report its economic substance position once annually. In the context of business companies, “economic substance” means that companies must have adequate presence and/or carry-on economic activities in the jurisdiction in which they are tax resident. Numerous jurisdictions worldwide have now introduced broadly similar economic substance requirements in response to European Union and OECD initiatives to prevent harmful tax practices and profit shifting.

In the case of Belize, the government passed the Economic Substance Act, 2019 (ESA) which came into force on the 11 October 2019.

Any entity considered an included entity shall have substantial economic presence in Belize. that is not taxed in a jurisdiction other than Belize and is a regulated entity.

Included entities are entities engaged in the follow relevant activity 

1. Banking business
2. Insurance business
3. Fund management business
4. Financing and leasing business
5. Headquarters business
6. Distribution and service centre business
7. Shipping business
8. As a holding company engaged, or where one or more of its subsidiaries is engaged in one of the activities listed above
9. All Regulated Entities under the FSC Act

*An included entity shall conduct its core income generating activities in Belize. Core income generating activities (CIGA) can be found listed below. The CIGA listed below are not all-inclusive. What constitutes the CIGA of a specific activity depends on the circumstances and may be unique to a specific firm.

Banking Business

“Banking business” means accepting deposits of money that may be withdrawn or repaid on demand or after either a fixed period or notice, by cheque or otherwise, and the employment of such deposits, either in whole or in part: – In making or giving loans, advances, overdrafts, guarantees or similar facilities, or – In the making of investments for the account and at the risk of the person accepting such deposits.

Core Income Generating Activities

1. Raising funds, managing risk including credit, currency and interest risk
2. Taking hedging positions
3. Providing loans, credit or other financial services to customers
4. Managing regulatory capital
5. Preparing regulatory reports and returns

Insurance Business

 “Insurance business” means the business of taking on liability under a contract of insurance to indemnify or compensate a person in respect of loss or damage, including the liability to pay damages or compensation contingent upon the occurrence of a specified event. It includes life insurance business and reinsurance business.

Core Income Generating Activities

1. predicting and calculating risk
2. Insuring or re-insuring against risk
3. Providing insurance business services to clients

Fund Management Business

“Fund management business” means conducting an activity that requires the legal entity to hold an investment business license pursuant to section 4 of the Securities and Investment Business Act, 2010 in relation to managing mutual funds, segregated portfolios, pension schemes, insurance products or other types of investments.

Core Income Generating Activities

1. Making decisions on the holding and selling of investments
2. Calculating risks and reserves
3. Taking decisions on currency or interest fluctuations and hedging positions
4. Preparing relevant regulatory or other reports for government authorities and investors

Finance and Leasing Business

“Finance and leasing business” means providing credit facilities of any kind for consideration, where consideration includes interest or the provision of credit by way of instalments for which a separate charge is made and disclosed to the customer in connection with any of the following:

1. The supply of goods by hire purchase
2. Leasing other than any lease granting an exclusive right to occupy land
3. Conditional sale or credit sale

Core Income Generating Activities

1. Agreeing on funding terms
2. Identifying and acquiring assets to be leased (in the case of leasing)
3. Setting the terms and duration of any financing or leasing
4. Monitoring and revising any agreements
5. Managing any risks

Headquarters Business

“Headquarters business” means providing any of the following services to an entity in the same group: 

1. The provision of senior management
2. The assumption or control of material risk for activities carried out by any of those entities in the same group
3. The provision of substantive advice in connection with the assumption or control of material risk for activities carried out by any of those entities in the same group, but does not include banking business, financing and leasing business, or insurance business

Core Income Generating Activities

1. Taking relevant management decisions
2. Incurring expenditures on behalf of affiliates
3. Co-ordinating group activities

Shipping Business

“Shipping business” means any of the following activities involving the operation of a ship anywhere in the world other than solely within Belize:

1. Transporting by sea, persons, animals, goods or mail
2. Renting or chartering ships for the business of transporting by sea, persons, animals, goods or mail
3. Sales of travel tickets or equivalent, and ancillary services connected with the operation of a ship
4. Use, maintenance or rental of containers, including trailers and other vehicles or equipment for the transport of containers, used for the transport of anything by sea
5. Managing the crew of a ship

Core Income Generating Activities

1. Managing the crew (including hiring, paying and overseeing crew members)
2. Hauling and maintaining ships
3. Overseeing and tracking deliveries
4. Determining what goods to order and when to deliver them
5. Organizing and overseeing voyage

Distribution and Service Centre Business Definition

“Distribution and service centre business” means either or both of the following:

1. Purchasing from foreign affiliates
2. component parts or materials for goods
3. Goods ready for sale
4. Reselling such component parts, materials or goods
5. Providing services to foreign affiliates in connection with the business, but does not include any activity included in any other relevant activity except holding business

Core Income Generating Activities

1. Transporting and storing goods
2. Managing stocks
3. Taking orders
4. Providing consulting or other administrative services

Holding Company

Holding company means a commercial entity which;

1. Is a holding body
2. Has a primary function the acquisition and holding of shares or equitable interest in other companies
3. Does not carry on any relevant activity as its primary function

Core Income Generating Activities

1. Earning dividends and capital gains

All companies must provide their Economic Substance form to their registered agent to facilitate provision to the FSC before the end of the entity’s filing deadline, i.e., nine months after the last day of its financial period. This should be done by the entity’s director(s) or, shareholder who is not a nominee. The registered agent will be responsible for ensuring the form is provided to the FSC.

Satisfying Economic Substance

An included entity demonstrates substantial economic presence in Belize if the following criteria relating to Board management and control are satisfied;

• an adequate number of meetings of the Board of Directors are conducted in Belize given the level of decision making required;
• there is a quorum of the Board of Directors present for meetings in Belize;
• strategic decisions of the included entity made at the meetings specified in paragraph (a) must be recorded in the minutes of the meetings;
• all records and minutes of the included entity are kept in Belize; and
• the Board of Directors has the necessary knowledge and expertise to discharge its duties

Essentially, an entity will have economic substance in Belize if all the following criteria are met:

• It is directed and managed in Belize
• It has adequate expenditure and employees, and appropriate premises in Belize
• Core income generating activities are executed in Belize

Outsourcing

An included entity may satisfy its substance requirements by outsourcing its CIGA in relation to that relevant activity to persons in Belize licensed by the IFSC as a Managing Agent. The included entity must monitor and control the execution of the CIGA performed by the Managing Agent. The outsourced CIGAs must take place in Belize, and that the supervision of the outsourced activities by the outsourcing entity must also take place in Belize.

Pure Equity Holding Companies (PEHC)

An included entity which engages in business as a pure equity holding company is subject to reduced substance requirements, as follows –

(a) It shall comply with all applicable laws and regulations of Belize; and

(b) It shall have adequate human resources and premises in Belize for holding equity participation in other entities and where it manages those equity participations in other entities, have adequate human resources and premises in Belize for carrying out the management.

Reduced substance is only applicable for passive PEHC. PEHC that may initiate the trading activities (active PEHC) will require more substance.

The substance requirements of the Act do not apply to any entity that does not conduct relevant activities in Belize. The substance requirements of the Act do not apply to a commercial entity that is controlled and managed outside of Belize and is tax resident in a jurisdiction other than Belize; however, such an entity must provide the Authority with sufficient proof that it is tax resident in the jurisdiction that it asserts

Economic Substance Guidance Notes

Included Entities Or Holding Companies Form

Pure Equity Holding Companies Form

Non-Included Entity form

Non-included Entities applying for a Certificate of Tax Exemption Form

Transfers

A resolution to change the location of a company’s Registered Agent may be passed by the directors or members of the company. A notice of change of Registered Agent shall be endorsed by the new Registered Agent with his agreement to act as Registered Agent. The Registrar shall; thence, send a copy of the notice endorsed by the Registrar with the time and date of registration to the company’s new Registered Agent.

Transfer In Form