Register a company in Belize
If you are looking for information on where it is best to register an offshore company, Belize is probably on your list of countries. In this article, we will take a closer look at why you should choose Belize for company registration, what taxes apply to businesses here, and learn more about this popular offshore jurisdiction.
Let’s start with the types of businesses that most often choose to register a company in Belize. In this case, the first that come to mind are companies engaged in:
- outsourcing services;
- launching startups;
- managing call centers;
- holdings and corporate management;
- internet advertising, particularly PPC and CPA models;
- game and mobile app development, including online casinos.
Why choose Belize?
The answer is simple: despite the fact that since 2019 Belize has introduced changes to the special IBC tax regime due to OECD requirements on combating money laundering, Belize is no longer on the EU list of non-cooperative tax jurisdictions and does not appear on the FATF black or grey lists.
In addition to the above, Belize has many other advantages:
- Belizean companies that do not conduct business within the country and are tax residents of another country are taxed at a 0% rate.
- Belize has no capital gains tax (CGT).
- The Belize company registry does not publish information about shareholders and directors. Therefore, such persons can remain anonymous.
- Company registration takes up to 2 business days.
- Only one shareholder and one director are required for registration.
- Low maintenance and operating costs.
However, alongside the advantages, you should also consider factors that may change your perception of Belize as a jurisdiction for your business. These changes are related to reforms introduced in 2019 and 2020, when Belize began updating its tax policy to meet OECD requirements.
One of the most important changes is the introduction of economic substance rules, which affect the taxation of IBC companies in Belize and are crucial for those considering registering a company in this jurisdiction.
Who is affected?
a) banking business;
b) insurance business;
c) fund management business;
d) financing and leasing business;
e) headquarters business;
f) distribution and service center business (only if engaging with foreign related parties);
g) shipping business;
h) as a holding company, engaged, or where one or more of its subsidiaries is engaged in one of the activities listed in a)–g).
So, if you fall under this law, what consequences should you expect? Is Belize still the right choice in such cases? It depends on your priorities, but overall, we recommend considering other jurisdictions.
Why? Because in such situations, a company must comply with the economic substance requirements regarding its activities in Belize, which include:
- Conducting core income-generating activities (CIGA) in Belize.
- Management and control at the board of directors level taking place in Belize.
- Having adequate operating expenditure, qualified employees, and physical offices consistent with the nature of the business.
If a company does not comply with economic substance requirements, it is given 90 days to remedy violations. If not resolved, fines of up to USD 75,000 may be imposed, or licenses/permits revoked. In cases of serious violations, fines can reach up to USD 150,000, or the company may be struck off the IBC register.
Overall, these requirements may be challenging for companies not prepared to comply, making it worth considering another jurisdiction with fewer economic substance obligations.
It is also important to understand that now income earned outside Belize cannot remain untaxed. Corporate income tax in Belize is based on gross revenue (not net profit), with rates varying, but most companies pay either 1.75% for commercial services or 6% for professional services (e.g., legal services). If you do not wish to pay taxes in Belize, you must confirm that you are a tax resident of another country and pay taxes there.
If a company chooses Belize as its tax residency jurisdiction, it must register for income and business tax; obtaining a tax number is also required. The tax rate depends on the type of activity. If you are interested, contact us, and we will provide a table with all applicable rates.
Withholding tax (WHT) in Belize is 15% for residents of non-CARICOM countries.
If you need assistance with company registration or choosing another jurisdiction, feel free to contact us — Fidustria will be happy to help!