Offshore Legislation In Belize

Belize offshore legislation is an integral part of the offshore financial sector. Belize began to develop strategies to improve its economy a few years after having gained independence from Great Britain. Belize offshore legislation was set in motion as was seen necessary for an offshore financial service sector. The foundations for the offshore financial sector were first laid in the early 90’s. Today Belize offshore financial sector is one of the best and most secure in the world. A much sought after tax haven, Belize encourages clients to invest their assets in the Belize’s offshore businesses by providing progressive offshore legislation that supports the interest of investors, provides a no tax environment and ensures that the services for offshore businesses are delivered with unsurpassed efficiency and quality.

Belize offshore companies or IBCs can be formed in less than one business day. Belize offers the following offshore services (and others) which all have the supporting laws to regulate their formation, administration, and functioning: International Business Belize companies formation, offshore banking, international insurance, limited liability partnerships and offshore trusts.
The International Business Companies (IBC) Act was passed in 1990 and regulates the development and management of IBCs in Belize as well as the interrelated areas of offshore financial services such as the registered agents etc. By definition a Belize offshore company is a company that is registered in Belize but conducts its business activities outside of Belize. Belize offshore legislation orders that offshore companies pay no duties or taxes of any kind on profits or assets. IBC’s in Belize are not authorized to engage in business activities with residents of Belize but can seek the help of professionals such as lawyers and accountants among others, to aid in the management of the company. According to offshore legislation in Belize, offshore companies can only lease office space for the functioning of its business. The shareholder and director of a Belize IBC can be the same person and there is no minimum share capital required.

Belize IBCs are not required to present accounting records to the government. Belize offshore legislation allows IBC owners to keep meetings pertaining to the business in any location they desire. International Business Companies are registered with the International Business Companies registry which is done in a few hours. According to Belize offshore legislation the registration of IBC’s in Belize must be done through and authorized registered agent. The names chosen for IBC must not include any word or phrases which will in any way suggest some link to the Royal Family of England or the Government of Belize.

The Trust Act of Belize, passed in 1992, is a critical piece of offshore legislation in Belize for the establishment of offshore trusts. Under the Act, trusts are regarded as offshore or exempt if for a year the beneficiaries of such trust do not reside in Belize, does not own land in Belize and the settler does not reside in Belize for the year. Belize offshore legislation for trusts provides exemption from all Income Taxes and Business Tax. Should death occur during any given time of the year, there are no estate taxes applied to the assets of a Belize offshore trust. Also, no stamp duties are paid for business conducted on behalf of an exempt trust.

Belize offshore trust legislation in Belize states that trusts can be of two types: Charitable and Non-Charitable trusts. Charitable trusts are those set up for the benefits of person both inside and outside of Belize and regards activities such as enhancement of education, the promotion of science or art, the alleviation of poverty among other activities and have an unlimited duration. Non-charitable trusts are formed on behalf of private individuals, families or corporations. This type of Belize offshore trust is used to safeguard assets, property or wealth. The Trust Act states the minimum number of trustees for a non-charitable trust is one person.

Belize offshore legislation does not obligate the registration of offshore trusts with the Registrar. Information regarding such trust must be filed with the Belize International Financial Services Commission. If a person wished to register a trust the fee is US$100. Information of a Belize trust cannot be given out without the permission of the trustee under Belize offshore legislation.

The offshore Bank Act is the piece of Belize offshore legislation which regulates the functioning of offshore banks in Belize. The Act was passed in 1996. The Belize offshore banking legislation stipulates that offshore banking refers to borrowing and receiving of money from non residents of Belize for interest on saving accounts or similar accounts which are paid based on agreements made between the bank and the client. In Belize, offshore banking is restricted from residents. The Offshore Bank Act states that no person shall engage in offshore banking or services without a license. Persons who do so are liable to a fine. Offshore banking licenses are issued by the Central Bank of Belize.

Under Belize offshore legislation for banking, there are two classes of banking license issued: Class A and Class B. Class A licenses are granted to banks with assets not less than US$ 50,000 and in case of a foreign bank assets no less than US$25,000,000. There are no restrictions on the activities of such banks that can operate an office in Belize. Class B License holders are restricted from conducting only the business specified in their license and cannot accept deposits or money from the public. These banks must maintain capital of US$2,000,000 and foreign banks with Class B License must maintain capital of no less than US$15,000,000. Capital for offshore banks can be in any currency according to the Offshore Bank Act. There is zero taxation on the assets, profits or shares of offshore banks in Belize.

The Offshore Bank Act states that offshore banks registered in Belize must submit at the end of the bank’s financial year the auditor’s report to the Central Bank. Failure to present the report in at least four months after the close of the financial year results in a fee of US$5,000. Offshore banks are guaranteed confidentiality and no individual can disclose information pertaining to the affairs of a licensed bank. Failure to do so results in a possible fine of US$5,000 and imprisonment of up to six months.

The International Insurance Act regards International Insurance as conducting insurance business from in or outside of Belize on behalf of persons who do not reside in Belize. This act was passed in 1999. International Insurance can only be carried out by license persons who hold a Certificate of Registration to. Application for a license must be made through the Supervisor of International Insurance in writing and must contain a Memorandum of association, Article of Association, the type of insurance business to be carried out, the financial status of the applicant, owners of stock or shares and a registered address in Belize.

The legislation stipulates that the paid up share capital for long term business( life insurance, accidents, personal injury, health insurance) is US$100,000, paid up capital for general business is US$100,000, for reinsurance is US$50,000 and captive insurance is US$ 25,000. There are no taxes applied the profits, gains or shares of International Insurance Companies in tax haven Belize. International Insurance Companies must maintain financial records at its registered office in Belize. The Company’s audited annual records must be forwarded to the Supervisor of International Insurance no later than three months after the close of the financial year. The insurer’s auditor must be approved by the Supervisor. Failure of the insurer to pay the annual renewal fees could result in the company having it’s licensed revoked. The license must be paid within one month of the date of expiration.

The different offshore legislation passed in Belize guarantees that the country becomes one of the most popular tax havens. The various laws ensure that the both the integrity of the country and clients is maintained.