By Dr. Andreas Riszner
Offshore Investors are considering the International Business Company of Belize
One of the most outstanding innovations in the Belize economy in the nineties has been the introduction of the Offshore Finance Industry followed by the first Offshore Legislation coming into effect in 1991. Especially the commonly called "IBC", International Business Companies, these corporate vehicles are easily incorporated, infinitely flexible, inexpensive, tax free and very private.
The IBC is designed with the offshore investor in mind. It is the ideal corporate vehicle for international financial transactions and makes the diversification of assets to a secure offshore jurisdiction accessible to individuals where ever in the world they may reside.
Among the key features of the IBC, which makes this type of company attractive, are the following: incorporation can be completed in one or two days at a very reasonable cost especially compared to other jurisdictions with similar features such as the British Virgin Islands and the Bahamas; the ultra vires doctrine does not apply to such companies.
A Belize IBC may engage in any activity that is not unlawful in Belize. The only restriction which apply to such companies are that they may not own real estate in Belize nor carry out any domestic business within the country. There is no restriction on IBC's engaging professional services such as lawyers, accountants, or establishing or maintaining bank accounts in Belize or even applying for a banking licence themselves. Share capital can be expressed in US$ and shares may be in the form of registered shares or bearer shares at the option of the company and those who control it.
The corporate records and dealings of an IBC are not open to the public or any authority. Documents filed on incorporation disclose only the location of the company's registered offices and the identity of its registered agent (usually an attorney or an accountant or specialized offshore consulting firm, members of the Offshore Association of Central America and the Caribbean). There is no requirement at any time to file or to disclose publicly the identity of the beneficiary owners of the company or share holders or the names of its officers and directors.
Belizean IBCs are specifically exempted from any form of income tax, capital gains or transaction tax. Any IBC can conduct its business in any foreign currency it may choose free of the Beelizean government regulation or restriction. Meetings of directors can be held at any place in the world, participation can be by telephone or any other electronic link. An IBC requires a minimum of one (1) director and this may be an individual or a corporate entity. A foreign corporation may be "continued" (re-domiciled) as an IBC and the corporate domicile of an IBC can be changed from Belize to any other jurisdiction.
IBCs are often used to establish trading accounts with Securities Brokers in the United States, Canada and Europe, either directly or through Belizean intermediaries, such as offshore consultants or banks. IBCs may also be used to hold title to real estate in jurisdictions other than Belize.
Trusts established under Belize law will often incorporate a Belize IBC which serves as an asset holding device for the trust. This provides an added layer of insulation because in many circumstances this negates the need to reveal the existence and details of the trust itself to third parties such as bankers or brokers dealing with the IBC.
IBCs can be used as a vehicle to collect commissions or for re-invoicing forward transactions in international trading, which enables corporation in high tax jurisdictions to minimize their tax liabilities at home.
One of the features of a Belizean IBC, which is frequently overlooked, is its cost effectiveness in comparison with similar types of companies in other jurisdiction. For example a Belize company with an authorized capital of up to US$50,000 can generally be incorporated and managed in its first year for an all inclusive fee of less than US$1200. In subsequent years the cost including the government licence fee and ongoing management fees can be as little as $600. Where authorized capital requirements are greater or where Belizean practitioners are asked to provide directors, additional costs may apply. However the point is that individuals who choose to diversified their assets to protect themselves in an uncertain world can establish themselves in a secure reputable jurisdiction by means of a Belize IBC at a very reasonable cost.
To establish a Belize IBC, offshore investors engage a Belizean practitioner to attend to the incorporating procedure (The Offshore Association of Central America and the Caribbean can recommend qualified practitioners).
To prepare the corporate documents the Belizean practitioner will need to know the proposed name of the company, its authorized capital, names of the director and related details. As mentioned above the identity of the directors and beneficiary ownership is strictly private information for the company's records. Once approval has been given for the proposed name of the company incorporation can be achieved within a day. The Belize IBC permits the offshore investor to engage in a wide variety of activities ranging from operating banking and brokerage account to profit sharing, commission arrangements, acquiring options, contracts, handling royalty rights and other commercial transactions. The Belize IBC allows the offshore investor to take advantage of the hundred percent (100%) tax free status of Belize and to diversify their assets at a reasonable cost with considerable privacy.
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.
