INTERNATIONAL BUSINESS COMPANIES
The International Business Companies Act, 1990 is based on the British Virgin Islands model.
Regulation and administration. The office of the Attorney General assumes responsibility for overseeing the formation and administration of offshore companies and is assisted by a government-appointed Registrar. The Registrar of International Business Companies is, in turn, assisted by a Deputy Registrar who is authorised to perform Registrar services and to facilitate the growth of Belize's offshore business industry.
Advantages of an IBC
USES OF IBC'S
- Method of incorporation: A Memorandum and Articles of Association, along with the appropriate fee, is filed with the Registrar of International Business Companies.
- Incorporation is swift and simple: IBCs take approximately one hour to incorporate.
- Anonymity. No accounts or information pertaining to the identity of shareholder(s) or director(s) is required to be filed in the Registry. The Company's share register is not open to inspection other than by its shareholders or by order of the Court upon application of a shareholder.
- Who may incorporate? The company may be wholly owned by a single shareholder and the shareholder may be a corporation or an individual of any nationality. Bearer shares may be issued as well as shares with no par value.
- Incorporation costs and fees: For IBC incorporation (including government's and agent's fees), US$600. Annual fee for registered office and registered agent (including government fee) US$300. Nominee director's fee between approximately US$200-US$400.
- Capital requirements: There are no minimum paid-up capital requirements.
- Directors and secretary: IBCs must have a minimum of one director who may be an individual or corporation. A secretary is optional.
- Articles of Association: are widely drawn and can be adapted to the needs of the company.
- Taxation: Total exemption from all forms of local taxation.
- Exchange control: There are no exchange controls as IBCs are treated as non- residents for exchange control purposes.
- Registered office and registered agent: IBCs must have a registered office and registered agent in Belize.
- Meetings: For IBCs, member meetings are not required. Directors may meet when they choose and meetings may take place outside of Belize. IBCs may migrate, into and outside of Belize, depending on the particular planning needs of the company. A special note needs to be made here that in Belize there is the possibility of having an Offshore Company and a local company with the same name.
The IBC is designed to be formed easily, with no tax, a liberal administration and with the distinct advantage of being able to conduct its own desired business worldwide. It is used by a wide range of clients ranging from large multi-national groups to family owned businesses and private individuals.
Belize IBCs are commonly used in connection with the following types of activities: trading; offshore investment; holding companies; real property owning; intellectual property owning; and shipping. However, the reasons for setting up an IBC may vary entirely according to a person's objectives and the type of transaction.
Some recent examples of the use of Belize IBCs include operations like sales distribution, construction projects, management and consultancy services, hotel operations, importing and exporting, and the invoicing of goods from one country to another.
There are also external factors which may determine the use of a Belize IBC and they include the following:
- User's jurisdiction: The company law within the user's own jurisdiction may be far more rigid than the Belize IBC legislation or the incorporation costs may be much higher.
- Regional vehicle: A Belize IBC may provide a "local" vehicle to a non-resident through which he may make investments in other parts of Central, North or South America, without a significant increase in cost.
- Diversification: It enables a non-resident to diversify operations by utilizing different companies for different assets. For example, one company to hold each separate business unit owned.
- Business Transactions : A client may wish to have a low or no tax vehicle for transactions for a variety of reasons. He may wish to reduce the overall tax burden on a transaction or keep confidential his participation in the transaction.
These are some of the main uses of companies in the Offshore area. Specific requirements can be discussed with a view to identifying appropriate solutions.
By Act no.14 of 1995 there were several amendments to the IBC ACT including the ability of a company to have its authorized capital in several currencies.
Foreign currency bank accounts. The major local banks offer a full range of international banking services including foreign currency savings and checking accounts earning tax-free interest and operated for the purpose of exchange control on a non-resident basis. Such accounts are offered to IBCs, individuals and trustees.
International Visa cards. The banks operate a US dollar-based international Visa card with worldwide acceptance. This provides an effective and flexible link with a Belizean foreign currency account and can also be operated on a stand alone collateral-secured basis. All major service providers offer the opening of accounts in other jurisdictions (e.g. Panama) limited to Visa, Master Card and American Express.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.