Reason To Invest In Belize
Belize is one of the top emerging destinations in the Caribbean & Central America. The country has a mix of the mainland (Central America) and islands (Caribbean). Belize has a growing tourism sector which creates a great cash-flow investment, while also being in an appreciating market. Belize is like foreign investing on training wheels; everything is in English, we have full foreign ownership, practice British Common law, etc. Belize is also a tax haven with low corporate taxes and property taxes. There is also no capital gains tax or estate tax. Belize real estate is one of the main focuses when it comes to investment in the country. Below are some of the top reasons to invest in Belize;
- Belize has No Capital Gains Tax
- You Own Property Outright with a Fee Simple Title
- Belize has No Inheritance Tax (Estate Tax)
- Full Foreign Ownership & Ownership Same for Citizens and Non-Citizens
- Low Property Tax
- Low Corporate Tax
- Foreign Investment Incentives & Programs
- Capital Protection: How safe is the investment? In Belize, there is full outright ownership. Belize is also pro-landlord and does not recognize squatting rights.
- Capital Growth: The appreciation of an asset. Belize is growing, and with growth comes increased demand. Belize is an appreciating market.
- Yield (Cash Flow): Can you produce passive income from the property? In Belize, you can rent out a home or condo with ease. You have passive real estate income from vacation rentals.
- Favorable Taxation: Belize is a tax haven with no capital gains or estate tax. Property taxes are also low and corporate taxes are 1.75% for international companies and 3% for domestic companies.
Luckily, when you invest in Belize, you are in a position to check all 4 boxes. You also have the added benefit of limited supply and scarcity in a market with growing demand when investing on an island like Ambergris Caye.
Belize Investment Opportunities
Since achieving its full independence in 1981, Belize has aimed to provide an enabling environment for investment and business growth (both domestic & foreign investment). Belize has had a lot of laws, programs, and incentives in place to promote private enterprises and attract investments in Belize from both local and foreign investors. Over the years, there have been a series of legislations that started in the early 1990s to allow for a range of incentives for those looking to invest in Belize. The conditions to qualify for the different investment incentives vary, as do the investment incentives themselves. Popular incentive programs and initiatives include; a tax holiday, import duty exemptions, the Qualified Retired Persons Program (QRP), investment residency, etc. Investors are also not limited to any singular incentive, they can use any of the investment programs in place or a combination of multiple.
The benefits of government programs do vary and are dependent upon the type of incentive awarded to the potential investor. Export-oriented activities, which lead to increased employment, and the development of local, technological infrastructure, are particularly favorable. Belize is a very pro-business country and is open to foreign direct investment. The government of Belize supports joint venture and partnership investments with local individuals and businesses, however, Belize also allows 100% foreign ownership of a property, business, or enterprise.
Belize is not closed off to those looking at investing or looking for employment in Belize. Importation of highly skilled personnel to complement the Belizean labor force is facilitated providing that appropriate training programs for nationals are established. Generally, the Belize government hopes to see one local Belizean employed and assigned to every skilled foreigner employed by the company.
Investment Incentives In Belize
Tourism is the largest economic driver and one of the best industries for investment. That said, there are a number of other investment initiatives and incentives in Belize.
The main exports from Belize are seafood, sugar, citrus products, bananas, and clothing, and its chief imports include machinery and transport equipment, food, fuels and lubricants, and chemicals. Belize benefits from trade agreements with several developed countries. Belize is also the only agricultural exporter in CARICOM. Some of the preferential trade agreements and policies include:
- Full member of the Caribbean Common Market (CARICOM).
- Preferential treatment from the U.S. under the Caribbean Basin Initiative (CBI) which we receive several tariff and trade benefits.
- Under the Lomé IV Convention, it has duty-free access to the EU for certain commodities.
- Certain Belizean goods enter Canada duty-free.
The Government Of Belize’s Investment Incentives
Belize has a number of incentives and programs in place to attract foreign investment. These include:
- 100% foreign ownership of land and company assets.
- Encouragement of joint ventures with local entities.
- Special incentives for retirees (like QRP).
Tax Holiday Program
The Fiscal Incentives Act of 1990 relates to tax holidays and duties. A tax holiday is a temporary tax break. In the United States, tax holidays often suspend state and local sales taxes paid by consumers. Governments also use tax holidays as investment incentives that may exempt a foreign investor from import duties or property taxes for a number of years, for example. In Belize, the tax holiday period shall normally be for a five-year duration from the date of production. However, there is a provision that the Minister for Economic Development can, on application by the company, in a fit and proper case, review the company’s operations and renew the tax-holiday period for a further term not to exceed 10 years.
Incentives under this particular clause in the Act also allow exemption from income tax under the Income Tax Act, including the repatriation of profits and dividends. The Act allows duty exemptions to companies that are granted an Approved Enterprise Order (Development Concession) to import items into Belize, free of import duty and revenue replacement duty. Since its independence in 1981, Belize has enjoyed the stability of a long-standing, democratic tradition, and has an independent judiciary. Belize is a part of the British Commonwealth and the British ties are still present, including; British Common Law & British Parliamentary Democracy.
The currency exchange rate in Belize is now fixed for 25 years at 2:1 with the US Dollar. The pegged currency further incentivizes foreign investment and ensures the stability of investment. Real estate transactions are also primarily done in USD which means a real estate investment is an appreciating asset pegged to the US dollar. Property taxes in Belize are also very low, which makes the cost of real estate ownership very low with little to no carrying costs.
Belize’s Export Processing Zones
For certain types of businesses, Belize’s Export Processing Zones (EPZs) provide substantial benefits to investors. Investors who take advantage of EPZs are often in the business of tourism. For Belize, the benefit of these free-trade zones is a way to encourage investment as well as foreign trade. For investors, the advantages include:
- Exemption from import and export duties as taxes on capital gains, property, sales and consumption, trade turnover, foreign exchange, and transfers
- An income tax holiday of 20 years with an option to extend and deduct losses from profits following the period of the tax holiday
- Dividend tax exemption in perpetuity
- The opportunity to open foreign currency bank accounts in Belize and abroad
- Exemption from the Supplies Control Act and its regulations
In addition, EPZs aren’t burdened with restrictions on raw materials or export licensing requirements.
Belize is a country full of opportunity. Belize is like foreign investing on training wheels; everything is in English, we have full foreign ownership, practice British Common law, etc. The leading industry in Belize is tourism, which is mostly driven by San Pedro & Ambergris Caye. The world-class fishing and Belize Barrier Reef keep the flow of tourism year-round. Belize is kind of like investing with a time machine. Overall, there is low competition in most sectors and innovation is welcome. Belize is lucky to be in a growing market (both for investment and tourism) with a favorable tax environment and a pro-business and pro-foreign investment economy.