Belize

*Updated July 2020*

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• Legal system
• Inheritance and succession
• Estate planning
• Taxation
• Residence and domicile
• Other relevant information

Legal system

English common law.

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Inheritance and succession

Succession

Legislation: Administration of Estates Act Chapter 197 of the Laws of Belize, Revised Edition 2003. These laws apply to Belize residents and foreign nationals who own property in Belize. Inheritance and succession matters are presided over by The Supreme Court of Belize – Probate Side.

Even though the law gives a testator free will to leave any part of their estate to anyone they wish in a will, the testator is required to make adequate provision for any dependents at the time of their death. A dependent can apply to the Supreme Court for relief should they feel that they are not adequately provided for, and the judge then has the discretion to reserve a portion of the estate for that dependent.

On intestacy, the rights of the surviving spouse and children are recognised first, followed by parents, then sisters and brothers, with whole blood ranking before half-blood.

Family law and defined inheritance rules

YES

Probate process

An executor may apply for grant of probate through the Belize Supreme Court by filing with the registry a petition for grant of probate; an affidavit verifying the petition; an affidavit of an attesting witness to the will; an oath; an appraisement reflecting the value of the estate; a bond; an inventory of the assets of the estate; and a statutory declaration. After issuance of grant, a notice to creditors is published in the government gazette and a local newspaper for two consecutive issues. The executor is then free to deal with the estate as directed by the will.

In intestacy, an administrator may petition to the court for administration of a deceased’s estate by filing letters of administration including a petition for administration, an affidavit verifying the petition, an oath, an appraisement, a bond supported by an affidavit of justification of surety, an inventory and a statutory declaration. A notice is required to be published in the government gazette for three consecutive issues reflecting the name of the person petitioning for grant of probate. Within two weeks after the last publishing, grant of administration is issued, if there are no contesters, and a notice to creditors is published in the government gazette and in one local newspaper for two consecutive issues. The administrator is then free to deal with the assets of the estate in accordance with Belize’s succession laws.

Mental capacity

There exists at law a presumption of sanity in favour of a testator, though the onus still falls on the person seeking to advocate a will to show that a testator was competent at the time of making the will. Therefore, the concept is recognised by the courts as is evident in the September 1990 Court of Appeal judgment in Robert Panton and Knox Arnold v Eric Defour and Marquis Defour, and the more recent March 2012 Supreme Court judgment in Glennis Glenda Godoy v Maria Bol and Noemi Dawson.

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Estate planning

Use of trusts in estate planning

The most frequently used trusts include discretionary, fixed, charitable, purpose and asset protection trusts. A disposition of property into a trust governed by Belize law may not be set aside to satisfy the claims of a divorced spouse, disinherited heirs or creditors in bankruptcy. International trusts registered in Belize are tax exempt in Belize.

Use of foundations in estate planning

International Foundations Act No. 2 of 2010 provides for the use of private foundations by non-residents in estate planning. The endowment of a foundation governed by Belize law is exempt from the claims of any creditors or, claimants of, or parties adverse to a founder or a beneficiary and shall be free from the interference of a spouse of a founder or a beneficiary or a parent of any minor beneficiary and from all foreign legal proceedings. International foundations governed by Belize law are exempt from taxes in Belize.

Types of entities

i. For international business:

• International business companies.
• International limited liability companies.
• International trusts.
• International foundations.
• Protected cell companies.
• Limited duration companies.
• Public investment companies.

ii. For local business:

• Local (Chapter 250) private limited companies.
• Companies limited by guarantee.
• Limited liability partnerships.
• Business names (trading as).

Intellectual property
What is considered intellectual property
Traditionally intellectual property is defined as a work or invention that is the result of creativity, such as a manuscript or a design, to which one has rights and for which one may legally apply those rights or protect ownership via a patent, copyright, trademark or any other similar medium. Legally applied property rights allow an owner to exercise exclusivity on the item for a designated period of time.

How the ownership of intellectual property has been affected in Belize
As of January 2019, Belize has amended its laws regarding the ownership of intellectual property by its international business companies. These companies, once granted approval by the International Financial Services Commission, may hold intellectual property up until 30 June 2021. Thereafter, the law requires mandatory disposal of the intellectual properties.

Service providers within this sector have been mandated with assisting their clients with amending memorandums and articles of association to reflect the changes to the Intellectual Property Act.

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Taxation

Income tax system

International financial entities are not subject to income tax, business tax, withholding tax, asset tax, gift tax, profits tax, capital gains tax, distributions tax, inheritance tax, estate duty or any other like tax based upon or measured by assets or income originating outside of Belize. International financial entities are regarded as not being resident in Belize and as such are not subject to exchange control regulations.

Amendments to the Income and Business Tax Act were implemented to make provision for a tax regime for companies engaged in certain business activities; to set the rate of tax for IBCs, designated processing area companies; to exempt from tax the interests and dividends from certain trade or business; and to provide for matters connected therewith or incidental thereto.

Personal income tax rates

Income tax applies to worldwide income including gains or profits from trade, business, profession or vocation and employment, and is charged at a flat rate of 25 per cent applicable to both resident individuals and companies with a threshold of BLZ20,000 (USD10,000).

Deductions allowed are in respect of basic personal relief of BLZ19,600 (USD9,800), charitable contributions of not less than BLZ250 (USD125) and not more than one-sixth of the chargeable income after basic personal relief and education relief.

Belize residents domiciled elsewhere are not liable to tax in Belize on income earned outside of Belize unless that income is remitted to Belize.

Non-residents are liable to tax only on income derived from Belize, and they are not entitled to the allowance of the BLZ20,000 per annum threshold, basic personal relief allowance or statutory tax exemption of BLZ100 (USD50) for income tax purposes.

Corporate income tax rates

Business tax is the prevalent tax for corporations and refers to a tax on all gross receipts as per below:

• Taxable persons: self-employed persons, firms, partnerships or company.
• Taxable receipts: all revenues, whether in cash or in kind, or whether received or accrued, of a person or entity carrying on a trade or business, or practising his or her profession or vocation in Belize.
• Trade or business carries a threshold of BLZ75,000 per annum in cases where it forms the sole source of livelihood of the person.
• Profession or vocation has a threshold of BLZ20,000 per annum where it forms the sole source of livelihood of the person.
• Rental receipts from property carry a threshold of BLZ800 monthly where it forms the sole source of livelihood of the person.
• Deductions allowed include charitable contributions and credits generated through trade losses and excluded receipts include revenue replacement duty on fuel, excise duty, hotel accommodation tax, sales tax and funds received as an agent.

The business tax rate varies but follows below:

i.   Receipts from radio, on-air television and newspaper business: 0.75 per cent.

ii.  Receipts from domestic airline business: 1.75 per cent.

iii. (a) Receipts of service stations from the sale of (a) fuel: 0.75 per cent. (b) all other items: 0.75 per cent.

iv. Receipts from other trade or business: 1.75 per cent.

v.   Rents, royalties, premiums and any other receipts from real property (excluding the receipts from real estate business): 3 per cent.

vi.  Receipts from a profession, vocation or occupation: 6 per cent.

vii. Receipts of an insurance company licensed under the Insurance Act: 1.75 per cent.

viii. Commissions, royalties, discounts, dividends, winnings from lotteries, slot machines and table games: 15 per cent. Provided that in the case of commissions of less than BLZ25,000 per annum, the rate shall be: 5 per cent.

ix.  Interest on loans paid to non-residents: 15 per cent.

x.   Receipts of a financial institution licensed under the Banks and Financial Institutions Act: 15 per cent. Provided that in the case of a financial institution which falls within a ‘PIC Group’, as defined in the International Business Companies Act, the rate shall be: 12 per cent. Provided further that in the case of a unit trust governed by the Banks and Financial Institutions (Unit Trusts) Regulations, the rate shall be: 6 per cent.

xi.  Management fees, rental of plant and equipment and charges for technical services: if paid to (a) a non-resident: 25 per cent. (b) a resident: the rate applicable to the particular trade, business, profession, vocation or occupation of the payee.

xii. Receipts of entities licensed to provide telecommunication services that offer real-time voice services: 19 per cent.

xiii. Gross earnings from casinos or licensed gaming premises or premises where the number of gaming machines is more than 50: 8 per cent.

xiv. Gross earnings from real estate business as follows:

(a) Real estate brokers and agents, earning commissions: 15 per cent.

(b) Real estate sales, developers, condominium owners and fractional interests: 1.75 per cent.

(c) Long-term leases: 1.75 per cent.

(d) Time-share operators: 1.75 per cent.

(e) Share transfer sales: 1.75 per cent.

xv. Receipts of entities providing electricity supply services: 1.75 per cent.

xvi. Receipts of building contractors: 6 per cent on the first 40 per cent of the total contract price and 1.75 per cent on the remaining 60 per cent of the contract price.

xvii. Receipts of persons licensed by the International Financial Services Commission of Belize to provide international financial services: 3 per cent. Provided that if there is a commingling of receipts from international financial services with those from domestic services, the entire receipts shall be taxed at 6 per cent.

Provisions under the latest amendments for tax rates were made as follows for IBCs:

• (a) the rate of tax for persons engaged in petroleum operations shall be forty per centum of the amount of the surchargeable income derived from such operations, and such tax shall be payable in the currency of the US (USD);
• (b) the rate of tax for IBCs shall be as follows:
• (i) 1.75 per cent of the chargeable income amounting to a sum greater than BZD3 million derived from business operations, and such tax shall be payable in the currency of the US (USD);
• (ii) 3 per cent of the chargeable income amounting to the sum of BZD3 million of a lesser amount derived from business operations, and such tax shall be payable in the currency of the US (USD);
• (c) the rate of tax for companies operating in a designated processing area shall be the rates specified in paragraph (b).

However, where a company conducts its trade, business or profession where the revenue or income is derived outside of Belize, the company shall not be liable for payment of income tax in Belize.

Capital gains tax

There are no taxes on capital gains.

Non-residents

Non-residents are liable to tax only on income derived from Belize by the following means: payment of dividends, insurance premiums, loan interest, management fees, equipment rental fees, technical services, royalty and commission. Non-residents are also liable to stamp duty and land and property taxes in relation to property in Belize.

Withholding tax rate (non-treaty)

Every person who makes payments to a non-resident for the below listed is required to withhold tax at the specified rates. The tax withheld should be immediately paid over to the Income Tax Department.

• Dividends: 15 per cent.
• Insurance premiums: 25 per cent.
• Interest on loans: 15 per cent.
• Management fees: 25 per cent.
• Rental of plant and equipment: 25 per cent.
• Technical services: 25 per cent.
• Royalty: 15 per cent.
• Commission: 15 per cent.

Withholding tax rate (treaty)

Belize does not currently have any treaties in place with any other jurisdiction for withholding taxes.

Taxation at death

No inheritance tax in Belize and minimal probate fees.

Other taxes

Stamp duty, land and property taxes, customs and excise taxes, and general sales tax.

Tax treaties

Twelve double-tax treaties with the United Kingdom, Sweden, Denmark and CARICOM member states (www.eoi-tax.org/jurisdictions/BZ#agreements).

Tax information exchange agreements

Belize has signed 16 TIEAs (www.eoi-tax.org/jurisdictions/BZ#agreements).

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Residence and domicile

Special rules on becoming resident

Permanent residency may be applied for after being legally present in Belize for at least a year without leaving the country for more than 14 consecutive days. The applicant must prove financial sustainability and is allowed to work in Belize for a salary.

The Qualified Retired Persons Incentive Programme (QRP) is a residency incentive created for persons wishing to live in Belize and who can prove a ‘permanent and consistent income’ whether abroad or in Belize. Applicants must be 45 years of age or older but can include the spouse of the applicant and dependants under 18 years; persons up to 23 years can also be included in an application provided that person is enrolled in a university. Proper due-diligence documentation is required and each applicant is subject to a background check. All persons accepted into the programme are entitled to import their personal effects, including an approved means of transportation free of all import duties and taxes. There is a minimal application fee of USD150, a programme fee of USD1,000 upon acceptance, and USD200 for each accepted person for issuance of the QRP Residency Card. Applications are processed by the Belize Tourism Board in collaboration with the Ministry of National Security and the Department of Immigration and Nationality. The programme is governed by the Retired Persons (Incentives) (Amendment) Act, 2001.

Of special importance to note is that persons qualified under the QRP programme are deemed to be non-residents for the purposes of the Offshore Banking Act, the Exchange Control Regulation Act, the Belizean Nationality Act and any other Act that relates or may relate to international financial services whether directly or indirectly.

Special rules on ceasing residence

There are no special rules on ceasing residence.

Domicile concept for gifts and inheritance

Gifts and inheritance do not attract taxes upon transfer.

Taxation of holdings by non-residents on death and of gifts

• Gifts: none.
• Death: none.

Reporting/auditing requirements

Employees are required to file their income tax return annually with the due date to file being 31 March of each year. Companies are required to file and pay their business tax the 15th of every month. Income tax withheld by employers is due to be paid the 10th of every month.

IBCs are required to:

• (a) apply for a Tax Identification Number;
• (b) designate a fiscal year; and
• (c) file annual return within nine months after the end of the designated fiscal year.

Economic substance
The criteria for claiming economic substance within Belize.
Under the Economic Substance Act, Section 8 of 2019, an entity demonstrates substantial economic presence in Belize if the following criteria relating to board management and control are met:

• (a) an adequate number of meetings of the Board of Directors are conducted in Belize given the level of decision making required;
• (b) there is a quorum of the board of directors present for meetings in Belize;
• (c) strategic decisions of the included entity made at the meetings specified in paragraph (a) must be recorded in the minutes of the meetings;
• (d) all records and minutes of the included entity are kept in Belize; and
• (e) the board of directors has the necessary knowledge and expertise to discharge its duties.

That entity must also demonstrate that it conducts core income generating activity in Belize proportionate to its business activities as follows:

• (a) amounts of annual operating expenditure;
• (b) number of qualified full-time employees; and
• (c) physical offices.

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Other relevant information

Asset protection laws

Yes, these are incorporated within the relevant laws for each international entity.

Foreign currency restrictions

No. There are no restrictions for IBCs, LLCs, trusts and foundations as these are international vehicles. Exchange control regulations are in place and require a permit to be obtained from the Central Bank of Belize for residents to deal in foreign currency.

Foreign ownership restrictions

There are not many restrictions on foreign ownership except as it relates to companies. Residents are required to obtain Central Bank approval to acquire shares in overseas companies and non-residents are required to obtain Central Bank approval to acquire shares in local Belize companies.

AML/due diligence and other requirements and regulatory procedures for advisors

• To establish a trust: full disclosure of settlor, trustee (if not a trust agent) and beneficiaries to include certified copies of each individual’s passport biographical data page and a certified copy of a utility bill issued within three months as residential address verification; full contact and personal details of all individuals; full corporate documents for any companies involved including certified certificate of incorporation, memorandum and articles of association, appointment of first directors, director and shareholder registers, certificate of good standing if applicable and financials; full disclosure on source of funding; only licensed trust agents can provide trust/trustee services and consultation.
• For incorporation: full disclosure of all directors and shareholders whether corporate or individuals as listed above.
• To open a bank account: full disclosure of all persons and companies involved as listed above; depending on the bank, a character reference from an attorney or accountant and/or a bank reference; full disclosure and supporting documents on source of funding upon setting up a bank account; source of funds declaration and supporting documents on any transactions above USD50,000.

Other points of interest

Belize launched its STEP Belize Chapter in November 2012.

Key resources for further information

Websites 

Legislation

• Administration of Estates Act Chapter 197 of the Laws of Belize Revised Edition 2003
• International Foundations Act No. 2 of 2010
• Money Laundering and Terrorism (Prevention) Act, 2008
• Companies Act Chapter 250 of the Laws of Belize Revised Edition 2000
• International Business Companies Act Chapter 270 of the Laws of Belize Revised Edition 2018
• Trusts Act Chapter 202 of the Laws of Belize Revised Edition 2000
• Trusts Amendment Act 2007
• Income Tax (Avoidance of Double Taxation) (CARICOM) Act Chapter 56 of the Laws of Belize revised edition 2000
• Income and Business Tax Act Chapter 55 of the Laws of Belize Revised Edition 2011, and all amendments thereto
• Retired Persons (Incentive) Act and the Retired Persons Incentive (Amendment) Act, 2001
• Accounting Records (Maintenance) Act (No. 18 of 2013)
• Companies (Amendment) Act (No. 19 of 2013)
• International Foundations (Amendment) Act (No. 17 of 2013)
• Trusts (Amendment) Act (No. 16 of 2013)
• International Financial Services Commission Act , Chapter 272, Revised Edition 2011 and amendments

   

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STEP branches in Belize

There is one STEP branch in Belize, which forms part of STEP's Caribbean and Latin America region.

• STEP Belize

Firms in Belize

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Members in Belize

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