New amendments have been made to the International Business Companies Act, Chapter 270 of the Laws of Belize, Revised Edition 2011. The features, advantages of and restrictions on an International Business Company (IBC) have been substantially modified as of January 1, 2019. The table below summarizes critical elements in the existing vs. the new IBC Regime.
|FEATURES||BEFORE JANUARY 1, 2019 NOT REQUIRED||AS OF JANUARY, 2019 WITH PHYSICAL PRESENCE||AS OF JANUARY, 2019 WITH NO PHYSICAL PRESENCE|
|Residency and property ownership||Restricted – not to include land, shares, debt obligations and other assets in Belize||Not Restricted||Not Restricted|
|Shareholding Ownership||Restricted to non-residents of Belize||Not Restricted||Not Restricted|
|Subject to Income and/or Business Tax||NO||YES||Subject to tax if income/receipts sourced from Belize, otherwise not subject to tax|
|Filing requirement||NO||File annual tax return, pay monthly Business tax.||File annual tax return if income/receipts sourced from Belize. Otherwise, optional to file annual tax return.|
|Dividends (paid or received)||Tax exempt||Tax exempt||Tax exempt|
|Interest (paid or received) on bonds||Tax exempt||Tax exempt||Tax exempt|
|Standard currency||USD||USD with operational activities conducted in Belize subject to BZD||USD|
|Exchange control permit||NO||YES||NO|
|Stamp duty||No||No, unless IBC owns property in Belize other than shares in another IBC||No, unless IBC owns property in Belize other than shares in another IBC|
|Physical presence||Not required||Mandatory for licensees of the International Financial Services Commission (IFSC)||Optional for Others not having an IFSC license|
|Audit requirements||No||May be required by the Commissioner of Income Tax if annual receipts are at least US$6mn||May be required by the Commissioner of Income Tax if annual receipts are at least US$6mn|
|Tax resident in Belize||NO||YES||NO|
|Certificate of Good Standing (CGS) requires tax compliance||NO||YES||YES|
1. Grandfathering provisions:
- IP asset owners in existence at 30th June 2018, need to apply to the IFSC for determination on its status whether it can continue to exist under the prior regime. Once the status is determined, income may be subject to tax under the new regime;
- Requirement in (a) expires 30th June 2021 if allowed by the IFSC;
- Existing IBCs under an activity licensed by the IFSC, prior IBC regime expires 30th June, 2021 after which they are subject to tax.
- IBC incorporated on or before 16th October 2017 (provided there are not IP assets acquired from a related party), continue to benefit under the prior IBC regime up to 30th June 2021 only on the core income generating activities; all other income must be subject to taxes under the new regime.
- IBC incorporated on or after 17th October 2017, are captured under the new IBCAmendments and are subject to tax.
2. Transition Period
- A transition period of at least 12 months will be approved, prior to the full enforcement of some of the new requirements, such as tax compliance, audit requirements and physical presence requirements.
For further information, please feel free to contact Anju Gidwani, Director of the Belize Office at email@example.com / +501 223 1037