User-Friendly and Cost-Effective: New Offshore Legislation Broadens Belize’s Appeal
Reprinted from International Living
When you think of Belize, you may think of its beaches, its rain forests, its spectacular diving, and its Mayan heritage... but you should add its offshore banking structures to your list.
This tiny country’s popularity among tax practitioners, estate planners, and international business people, has grown tremendously in the last decade, and enthusiasm has really piqued in the last year.
In fact, the number of registered corporations in Belize’s International Business Corporation (IBC) registry recently surpassed 10,000 - making it the third-largest domicile for offshore businesses in the Caribbean-Central American basin, behind the Cayman Islands and the British Virgin Islands.
New Government, New Laws
The PUP government, which in the early 1990s pioneered Belize's offshore legislation, was returned to power in the 1998 elections and has been writing laws over the past years with an eye to attracting foreign investment.
The IBC legislation, which allows you to operate your Belizean company tax-free, has been bolstered by new legislation that allows for the incorporation and licensing of offshore banks, insurance companies, and mutual funds. These structures encourage the efficient and free flow of an organization’s capital without consideration of tax consequences, which means that the offshore capital grows much more quickly than it would in comparable on-shore jurisdictions.
To illustrate this point, consider that Lloyds Insurance Bermuda, which spun off from Lloyds at London some twenty years ago, now provides re-insurance services to the London office because its financial strength has surpassed that of its famous parent. Belize now offers these same types of advantages at relatively low costs, compared to other “tax-haven” jurisdictions.
In addition, Belize remains one of the world’s best venues for offshore asset-protection trusts. Furthermore, its English-style legal system will be familiar to you as a North American, making it that much easier to do business here.
New “retiree” legislation has been designed with the investor in mind as well. Under the new law, you’ll be able to bank here offshore and live here full time, perpetually maintaining your “tourist” status. It used to be that if you lived here you needed “resident” status and once you had that, you could no longer make use of the offshore structures. The new law provides a useful loophole.
No Heavy-Handed Regulations
To be fair, the new offshore-banking laws do provide for a certain amount of regulatory oversight designed to protect consumers. But in an age when many jurisdictions are adding cumbersome controls to their banking legislation, Belize has done just the opposite. The system here is user-friendly and free from the heavy-handed regulations that are commonplace in industrialized countries. That means you can bring capital here and have it operate very efficiently.
As a professional who deals with a multitude of offshore jurisdictions, I find that Belize ranks high when you consider its efficiency, low costs, and easy-to-use legal system.
The jurisdiction still lags behind the most sophisticated venues, such as the Cayman Islands, in terms of the availability of offshore financial products and in-country support professionals. However, that is rapidly changing.
In my view, Belize is the most user-friendly, tax-efficient business center in the world.
Copyright 2002 Nagel & Associates, LLC