- Offshore Financial Services in Belize
- August 6, 2012
- Law Firm: Morgan Morgan - Panama Office
Geography, History & Economy
The country of Belize is located on the Caribbean coast of northern Central America. Bordered to the North by Mexico, South and West by Guatemala and East by the Caribbean Sea, Belize forms part of Central America and the Caribbean. Belize is geographically distinct from the Caribbean as it is a mainland nation rather than an island and as part of Central America, Belize is the only nation in the region with English as its primary language and with a common law legal system. These two features put Belize in an advantageous position for trade and industry. Historically Belize’s economy was dependent on the agriculture and marine industry. Currently, Belize’s industry portfolio retains such traditional industries but also includes Ecotourism, Oil and the International Financial Services Industry. Belize sought to diversify its economy by becoming an International Financial Services Center.
With now over 20 years’ experience in the industry, in 2010 Belize was included in the OECD “White List” of jurisdictions that have substantially implemented the internationally agreed tax standard in transparency and tax information exchange.
Belize offers a range of investment options and products which seek to facilitate tax planning, asset protection and estate planning and is continuously keeping up with the increasing demands of the industry. Belize’s main services offered includes the International Business Company (or the Belize IBC as it is widely known), the International Trusts, International Foundations, LLCs, as well as Ship Registration.
Offshore Corporate Structure: The International Business Company (IBC)
The Belize IBC was created with the enactment of the IBC International Business Companies Act in 1990. The Belize IBC is an ideal international corporate vehicle for investors to engage in many financial activities from asset protection to operating bank accounts and entering into commercial transactions. The Belize IBC is granted full tax exemption in Belize.
The IBC has full capabilities to conduct an array of transactions just like a regular company with the added bonus of asset protection, savings on taxation as well as a high level of confidentiality. Unlike a local company, the IBC offers a flexible corporate structure exempt from all forms of local taxation and free from the requirements to file annual reports and audits.
International Financial Services practitioners (IFSP) have a duty to follow certain procedures set in place which include conducting the proper due diligence to ensure that IBCs are properly formed under internationally acceptable rules of compliance.
The incorporation process for a Belize IBC is fairly straightforward. Through a local IFSP, IBC’s can be incorporated quickly and via simply an email or a fax outlining the client’s needs. Incorporation involves the IFSP submitting the Memorandum and Articles of Association (M&AAs), tailored to meet the client’s needs, and submitting the required fees to the Registry. Within a day the company is incorporated. The company may be incorporated in any language, so long as an English translation is attached. This provides accessibility to clients all over the world who do not have English as their first language.
The Belize IBC has no minimum paid up capital and the minimum number of shareholders and directors is one none of which are required to be Belizean. Shares may be registered or issued to bearer. Bearer share certificates must be held by the Registered Agent of the IBC or the Registered Agent’s professional intermediary (usually located in another country outside of Belize).
The Belize IBC can be used for entering into international commercial transactions, securing loans and facilities or for use as a special purpose vehicle or holding company. The registration of mortgages, charges or encumbrances is not mandatory, but doing so will secure priority of debt in the event of contested enforcement.
The ease of incorporation and wide capabilities of commercial use have resulted in the Belize IBC as a preferred choice for corporate structuring of international clients. Since 1990, the quantity of incorporations per year has been steadily increasing, with now over 119,000 IBC’s incorporated to date and still rising.
International Financial Services Commission and the Ministry of Finance
In Belize, all International Financial Services practitioners must be vetted and licensed by the International Financial Services Commission (IFSC), which is the government agency responsible for the daily regulation of the sector.
The IFSC is the regulatory body of International Financial Services which “seeks to promote, protect and enhance Belize as an International Financial Services center and to regulate the provision of International Financial Services”.
The IFSC was established in 1999 and regulates all non-banking International Financial Services and forms part of the portfolio of the Ministry of Finance.
The private practitioners are represented by the Belize International Financial Services Association (previously the Belize Offshore Practitioner’s Association), a statutory body with an elected executive comprised from among IFS practitioners.
The Belize IBC Registry supervises and manages the incorporation of IBC’s providing fast, efficient and reliable service with a commitment to incorporate standard IBCs within a 24 hour period.
The IBC Registry has been in existence since 1990 and is headed by a Registrar General, who is also the Director General of the IFSC. There is a Deputy Registrar based at the Registry who is in charge of daily operations of the authority and there is full time trilingual staff fluent in English, Spanish and Mandarin.
All official fees relating to Belize IBCs must be paid to the IBC Registry, including annual license fees which must be paid by all Belize IBCs in order to keep them in good standing and prevent striking off from the register (which would lead to eventual compulsory dissolution if not rectified).
Flying the Belizean Flag: Vessel Registration
Belize enacted the Registration of Merchant Ships Act in 1989 in order to facilitate international ship registrations. The relevant government authority for this is the International Merchant Marine Registry of Belize (IMMARBE).
There are no restrictions on who can apply for registration and there is no requirement that the crew must be local. Any type of vessel can be registered despite the class, type or size. Registration of bareboat charter and dual/parallel registrations is permissible. The registration process is fast and efficient with applications allowed to be submitted via fax and can be processed the same day. Vessels registered with Belize have the advantage of being exempt from all forms of local income tax and stamp duties.
Belize is globally recognized for its excellent standards in safety having signed on to several maritime conventions such as Safety of Life at Sea, International Regulations for Preventing Collisions at Sea, Civil Liability for Oil Pollution Damage, Tonnage Measurement of Ships, and the International Convention on Load Lines. Belize has been placed on the IMO STCW White List since November of 2001, and received confirmation from the IMO’s Maritime Safety Committee that it is in full compliance of the STCW 1978 Convention.
To date over 7 thousand vessels have been registered since the Registry first opened its doors.
International Merchant Marine Registry of Belize (IMMARBE)
The Registration of vessels is supervised and regulated through IMMARBE, which is recognized as one of the world’s most modern shipping registries, with many offices all over the world. The Registry provides efficient and reliable service at competitive rates. It facilitates and controls all registrations and ascertains that all vessels flying the Belizean flag are in full compliance with the relevant regulations and conventions. Belize has been included in the IMO White List and the Registry has attained ISO 9001-2000 Certification by ANSI-ASQ National Accreditation Board (USA). The Registry imposes quality criteria for the registration of vessels and continuously monitors and inspects its vessels to ensure that they are not being utilized for illicit activities.
Belize’s International Financial Services sector continues to grow and is now benefitting from an increasing effort on both the private and public sector to continue to improve the level and quality of services offered in this special country that forms the bridge between Central America and the Caribbean.