BELIZE ECONOMIC SUBSTANCE 2019
The Belize International Business Companies (Amendment) Act, 2018 came into force on 1st January 2019 and its provisions are almost identical to provisions of the BVI ECONOMIC SUBSTANCE (COMPANIES AND LIMITED PARTNERSHIPS) ACT, 2018
The most important details of the new legislation are:
1. An offshore company's affairs must be managed from Belize (meaning that the majority of directors must reside in Belize, board meetings must be held in Belize and all of the company's documents must be kept in Belize).
2. An offshore company should maintain its office and employ qualified personnel in Belize, unless the company can prove its tax residency in another jurisdiction and if the company is able to supply satisfactory evidence to the Minister responsible for Finance that -
(a) it is not physically present in Belize;
(b) its core income generating activities are conducted in a country where taxes under the Income and Business Tax Act would become applicable had it been located in Belize; and
(c) it is paying the rate of taxes payable in that country.
3. The international business company that is a person resident in Belize is now able to carry on business in Belize, own real estate property and conduct core income generating activities in Belizes, but shall be liable to pay income tax and levy, file an annual tax return based on the requirements of the Income and Business Tax Act, and be subject to the Stamp Duties Act including the payment of stamp duty in relation to an instrument -
(i) to transfer property to or by such company;
(ii) on transactions in respect of the shares, debt obligations or other securities of such company; and
(iii) relating to the assets or activities of a company.
4. For companies incorporated before October 16, 2017 (inclusive), the so-called "Grandfathering policy" will be applicable until June 30, 2021 (that is, by this time the company must comply with all the above requirements).
5. As for companies incorporated in the period of 10/17/2017 - 12/31/2018 and for new companies (2019-) the new amendments are applicable immediately.
We expect the guidelines to be issued by the Belize authorities in the coming weeks, explaining more in depth the scope of the new legislation.
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