Types of Property Ownership in Belize

Types of Property Ownership in Belize

One of the primary advantages to investing and owning in Belize is the ownership structure and the fact foreigners can own a property outright with a fee-simple title. Belize is one of the only countries in Central America that allows foreigners to truly own Belize real estate. A lot of condos use strata titles, timeshares, or leases. One reason we suggest investing in Belize and or buying detached homes in Belize is the fact you get full outright ownership with a fee-simple title, owning the land and structure.

 

Shares vs Strata Title vs Fee Simple

In Belize, most land opportunities and detached single-family homes allow for fee-simple titles and have a physical copy of the title from the Belize lands department. Most condos or developments in Belize are owned with co-op shares or strata titles. Strata Title enables one to pass physical title to a ‘slice of air with a building in it’ without owning the land that is below it. An example of Strata Title would be purchasing and taking title to a 3rd-floor unit without owning the shadow footprint of the land below.

Many developers around Belize erroneously refer to their projects as ‘condos’ when they are not located in a new registration zone. It should be noted that true condominiums in Belize only exist in the New Registration zones where the Strata Act is applicable.  If the ‘condos’ are not in the new registration zone then they should be referred to as ‘units’ or ‘residences’ and, in most cases, they will be titled via corporate share certificate(s).

It is also important to note that Belize has a lot of parallels to the US & Canada when it comes to real estate and real estate appreciation. Condos rarely see the same level of appreciation and most of the condo projects in Belize (especially presales) are co-op share ownership. 

 

Housing Cooperative (Shares)

This ownership structure is popular and is known to North Americans as “Co-op’s”. This is the weakest form of ownership in Belize and the buyer does not have any form of title. There are numerous downsides to this form of ownership, mostly being that share certificates cannot be mortgaged by a lending institution, and insurance on the unit is challenging. A housing cooperative or “co-op” shares are a type of residential real estate option that is actually a corporation that owns the real estate.

The ‘owners’ within the development do not own their units outright. Instead of owning the units, each resident is a shareholder in the corporation based in part on the relative size of the unit or equity stake the unit that they live in has. A co-op share ownership in real estate is a way to own a primary residence, through the shares of the corporation. With housing cooperative or co-op share ownership owners own the shares, they however don’t own their units outright or the land itself; instead, each resident is a shareholder in the co-op.

Some co-op share real estate options allow owners to sell their co-op shares (equity in the unit) in the open market, depending on the development. Often they have restrictive clauses that limit resales. This limits the liquidity of the property. 

In Belize, when a condo appears to be cheap or “too good to be true” it is generally because they have co-op share ownership. Co-ops when it comes to real estate in Belize can be less expensive than homes or true strata title condos since they operate on an at-cost basis, collecting money from residents to pay expenses. Often padding additional profits to the developer.

Even though co-op share ownerships appear to be a great deal, they often come with more risk and a low level of ownership control. Before buying shares in a co-op ownership condo, be sure to check out the company’s financial situation and the fees involved.

A lot of presale condos use co-op share ownership. The resale is very difficult since the unit cannot be mortgaged and they are very difficult to insure in Belize

 

Strata Title

It should be noted that true condominiums only exist in the New Registration zones where the Strata Act is applicable. This includes San Pedro Town, Seine Bight, and Belize City are the only locations that have true condos with Strata Titles. Strata Title enables one to pass physical title to a ‘slice of air with a building in it’ without owning the land that is below it. i.e.: one can purchase and take title to a 3rd-floor unit without owning the shadow footprint of the land below.

If a condo has strata title, it provides a higher level of ownership and is a true ‘condo’. In Belize, every property has an individual land title, when you purchase a home or land in Belize you receive a copy of the land title. When you buy a property with a fee-simple title you take possession of it when you purchase a house or a piece of land in Belize.

When you buy a property that is part of a strata title, you own your unit or condo. When you own a strata title property or condo, you have individual ownership over your apartment, unit, condo, or townhouse.

The Strata Titles Registration Act, Chapter 196, of the Laws of Belize governs the issuance of titles to condominiums in Belize. These condo titles are referred to as “Strata Title”. The Strata Titles Act essentially enabled developers to construct condominium developments in Belize and to issue freehold titles to each unit created in those Developments.

Condominium structures in the Caribbean are very rarely high-rise buildings. They are commonly relatively small two to four-story buildings. This is largely due to building restrictions set by the CBA (Central Building Authority). Unlike large metropolis cities, the structures in Belize are rarely above 3 to 5 stories and are primarily used by vacationing foreign residents. Developments that offer Strata Titles are most commonly found in San Pedro, Ambergris Caye, Hopkins, and Placencia.

When a developer of a condo project applies for Strata Title, the titles of the various units are issued to the Developer and are put in the developer’s name. As each individual unit is sold, the developer transfers the strata titles to the new owners (purchasers).

A property or development in Belize can only apply for strata title when the unit is built or near completion. This makes it challenging to obtain Strata Title since most of the capital for investment is tied up in the development. Because of the laws pertaining to Strata Title, and having to be at or near completion to apply (and application takes time for approval), most condos or units offer co-op share ownership for presale, which can have risk. The tedious Strata Title process is why so many condos go the co-op share ownership route. If you are looking at buying a condo in Belize, we suggest ensuring the property at least has a strata title. 

 

Fee Simple Title

Fee Simple Title is Freehold ownership, which is by definition;

  1. A permanent and absolute tenure in land with the freedom to dispose of it at will, especially (in full fee simple absolute in possession ) a freehold tenure, which is the main type of land ownership. Fee-simple title is an interest in land.  Land owned in fee simple is owned completely, without any limitations or conditions. This type of unlimited real estate is called absolute.  A fee simple is generally created when a deed gives the land with no conditions, usually using the words like “to John Doe” or “to John Doe and his heirs”. (source)
     

In British Common Law, a Fee Simple, Freehold Ownership, or Fee Simple absolute is real estate in land or physical property and is of freehold ownership. A “fee” that is used as the basis for the title is a vested, inheritable, present possessory interest in land and physical property. A “fee simple” is real property held without a limit of time. This means absolute and permanent ownership of property under the governing common law.

A Fee-Simple Title and Freehold Ownership is the highest possible form of property ownership. There are also properties that are known as a “fee simple absolute,” which is without limitations on the land’s use.

If you’ve bought land or a house in Belize, it’s likely you own the property outright with a fee-simple title. This is the strongest form of property ownership and means that you own the “real property”. The fee simple way of owning real estate is the most common type of homeownership in the USA & Canada. Belize is also one of the few countries in the region with fee-simple titles and full foreign ownership. The fact foreigners can own a property outright with a fee-simple title is one of the major draws and advantages of off-shore real estate investment in Belize.

When you buy land or a home in Belize you will receive a “fee simple” title to your property which gives you full and complete ownership, unlike some Central and South American countries where the title is held in trust by a bank or similar institution. Other countries will offer leasehold ownership to foreigners which means you only own the land/property for a set period of time. 

Belize is part of the British Commonwealth and with that, Belize has a legal system that is based on British Common Law. This comes with fee-simple land and property ownership. Property purchasers can take title to freehold property in Belize.

The Land Laws of Belize and property ownership Laws of Belize are derived mainly from the Common Law and English Statutes of the 19th century. The Law of Property Act, Chapter 190 has a lot of similarities to the Real Property Act 1925 of England and are nearly mirror images of each other. Other relevant statutes and laws that Belize has used and implemented include the Registered Land Act, Chp 194 which is a statute that governs all land transactions in Belize.

 

Fee Simple vs. Leasehold Ownership

In Belize, most residential real estate and land are owned on a fee-simple basis (this is similar to the US & Canada). This is not the case in most of Central America & The Caribbean where land and home sales are in leasehold ownership. Belize is one of the only countries in the region that offers full foreign ownership and fee-simple title. 

Under the leasehold model, one party owns a property while the tenant can use the land for a set number of years. This is common in Costa Rica, Mexico, Panama, etc. Most countries in the region have restrictions on foreign ownership. This is not the case in Belize, where you truly own real property. Generally, Leases involved in these arrangements are usually long-term, typically lasting 55 years to 99 years or more.

Some owners may grant something called a “life lease” where the tenancy remains until the lessee passes away. This means the property itself can not be passed on or inherited. In that case, the property reverts back to the grantor.

If you enter into a leasehold arrangement, you’ll have to pay a fee to use the land, unlike fee simple ownership which requires no rent payments or renewals. With fee simple, you do not have to renew the lease as you own the property outright. With a fee-simple title, you own any home on the land forever. But with leasehold, when the lease ends, both the land and home will revert to the previous owner – unless you negotiate a new lease or renew the lease before the old one expires.

When you own a property with a leasehold property you only “own” the property or real estate for a fixed period of time. When you agree on a leasehold property, there will be a legal agreement with the landlord (sometimes known as the ‘freeholder’) called a ‘lease’. This tells you how many years you’ll have rights to the property. Ownership of the property returns to the landlord when the lease comes to an end or expires.

There are a lot of restrictions on foreign ownership in countries like; Costa Rica, Honduras, Panama, Mexico, etc. These countries often have leasehold contracts or require a trust to own real estate. That is not the case in Belize. Belize has no restrictions on what foreigners can own. There are some condo developments in Belize that are leasehold or co-op share ownership and usually use this structure if they’re bought through shared ownership or a co-op.

 

Belize Real Estate Appreciation

When investing or buying real estate it is important to consider the Appreciation Potential. Single-family homes tend to appreciate more than condos, partly because people have a hard time envisioning paying a higher sales price for a property where they have to pay condo fees. Many homebuyers would rather put that money into home improvements of their own choosing. The people who generally profit from condos are the developers alone.

Look to the future and the entire condo community when considering the marketability of your unit when you wish to move on. Your unit will never be worth more than an identical unit, plus upgrades. If another owner sells at a cheap price, that might affect your resale value. Condos can often of restrictions on use if you are in a rental pool, or require using their own management. When owning a home or land, there are often no outside restrictions on use. Condo homeowner association rules may restrict how you use the property and may make it difficult—or even prohibit—renting your condo unit to others. Or rent it outside of the rental management. When you own a home, you have much more control over the use of the property.

 

Property Liquidity

Literally speaking, a condo can be a tough sell in a bad housing market. That’s because, for the most part, a condo is a substitute house. They’re the kind of property people buy only in the most robust markets. But detached houses on privately owned lots tend to be more liquid in all kinds of markets. There’s also the individuality factor. Each house is unique, particularly after it’s been customized by its owners. There’s a greater likelihood that it will appeal to specific buyers. Condos, on the other hand, are uniform. They’re so similar that one unit doesn’t necessarily stand out from the rest. If there are a lot of units for sale in a condo neighborhood, it could take a year or more to sell your unit. This is a major reason why condos are often converted to rentals.

 

Belize Property & Belize Real Estate

One thing every person who goes through the purchasing process in Belize knows how easy and straightforward the process can be. Buying real estate in Belize is very easy and our team at RE/MAX Belize is here to help you through the entire Belize Real Estate Purchasing Process

Neither the Buyer nor the Seller needs to physically be in Belize for the purchasing or closing and the whole process can be carried out remotely. Belize is one of the easiest countries for foreigners looking to buy real estate and invest off-shore.

Belize recognizes the rights of non-nationals, and the ownership rights for foreigners are exactly the same as local Belizean citizens. Unlike other Central American countries and tropical tourism destinations, in Belize non-nationals can buy a property outright rather than have to settle for a long-term lease (leasehold ownership) with the national government or have layered trusts. With Belize’s British ties, the ownership rights are very similar to that in the UK, USA, & Canada. 

Another advantage of buying property in Belize is that you do not need to physically be in Belize to make an offer on a property, or to complete a closing. Most real estate transactions in Belize are done remotely and the buyer does not have to physically be in Belize to purchase property in Belize. This makes buying real estate in Belize as a foreigner especially easy and appealing. 

There are different types of titles and ownership structures in Belize but are still good and all legal. When you buy property in Belize, you have a few options when it comes to the ownership structure. A lot of real estate transactions in Belize are through corporations and have property ownership in an IBC with fee-simple title. Owning a property in an IBC is still fee-simple full ownership with an added layer of asset protection and tax optimization. 

 

If you are looking to get the most out of your Belize investment and have the best value when it comes to Belize real estate, we at Remax Belize suggest buying land and building or securing a single-family home with a fee-simple title. The most desirable attribute Belize real estate offers is the fact that foreigners can own a property outright with a fee-simple title, and the fact Belize has full foreign ownership. When you purchase a condo (especially something with co-op share ownership) you erode the largest value of buying and investing in Belize. If you are looking for real estate options in Belize with a fee-simple title, contact us at Remax Belize.

As Mark Twain famously said, “invest in land; they are not making any more of it.”

 

 

 

Are Squatters a Concern in Belize?

Are Squatters a Concern in Belize?

No. The shortest possible answer is that Belize does not recognize squatters and squatters are not a concern when it comes to owning property in Belize. The tough anti-squatting laws and the fact Belize is “pro-landlord” make it such a safe investment and desirable place to own real estate. Belize real estate is a safe and secure investment and gives foreign investors peace of mind and a high degree of capital protection. Belize has tough anti-squatting laws and does not recognize squatting rights. Unlike Costa Rica, Panama, Honduras and other Central American countries Belize is pro-landlord and has very strict anti-squatting laws. 

In Belize, one can only claim title to a land or easement upon proof to the Supreme Court of Belize that one has had continuous and undisturbed possession of a property for 30 years on National and Conveyed lands and for 12 years on registered lands.

There are no squatter’s rights in Belize. If you show title and there is someone on your land, the police will assure that the trespassers or squatters depart and are removed from the property.

Belize is one of the most pro-landlord countries in the region of Caribbean & Central America. Title to real estate is very secure in Belize, you own it outright and have a fee-simple title (the strongest form of property ownership). When you receive a “fee simple” title, it means you fully own the property. The system Belize has is based on British Common Law.  It is very safe and secure.

As long as you have the title and show ownership, your Belize real estate investment will be safe and secure. The fact Belize has full foreign ownership with a fee-simple title makes it an even safer investment. 
 
Belize does have title insurance, but it is not needed and is virtually useless. The strong property ownership rights and laws protecting real estate make title insurance not necessary. 

When it does come to squatters in Belize, it is important to note that any person who is found in the unlawful occupation of land or property is guilty of an offense under the National Lands Act, Chapter 191 of the Laws of Belize.

While it is the responsibility of private landowners to remove squatters and/or people trespassers on their land/private property, the Ministry and Belize government reiterates that, under the Summary Jurisdiction (Offenses) Act, Chapter 98 of the Laws of Belize, trespassing and squatting on private lands is illegal and subject to removal at the expense of trespassers.

In summary, Belize does not recognize squatters. Belize has strict anti-squatting laws protecting property, unlike most Central American and Caribbean countries. The only way a squatter can claim title to property or easement of a property is upon proving to the Supreme Court of Belize that they have had uninterrupted possession of the Belize property for at least 30 years on National and Conveyed lands or for at least 12 years on Registered lands.

If you are interested in owning Belize property or investing in Belize real estate be sure to contact us at RE/MAX Belize! We are happy to answer any of your Belize real estate questions.

 

 

Owning Belize Property in an IBC

IBC Owning Belize Real Estate

If you are looking at owning or investing in Belize Real Estate you likely already know the benefits of investing in off-shore markets like Belize. What you may not already know or be aware of is that setting up an International Business Company (IBC) to own your property or buying a property that is already owned in an IBC Belize provides an array of benefits and is advisable when purchasing or owning a property in Belize. One of the many functions of an IBC is the ability to own and maintain real estate in Belize is one of them. 

Belize is one of the best low-tax jurisdictions in the region. Belize is also one of the best countries in Central America & The Caribbean and a preferred jurisdiction for setting up an offshore company. The most common type of offshore corporation when buying real estate in Belize is an IBC.

An IBC is an “International Business Company” and functions much like an LLC in the US but operates in an off-shore market or foreign country. The International Business Companies Act 1990 of Belize created a special category of a company known as an International Business Company (IBC). When you buy a Belize property that is in an IBC there is no stamp or transfer tax. Having IBCs is one of the tax optimization laws Belize has in place for off-shore investment. You own the IBC and the IBC owns the property with fee simple title. 

If a property is not held in an IBC, there is an 8% stamp/transfer tax when you buy or sell the property as a foreigner or non-resident and a 5% if you are a resident or Belizean (or Belizean corporate entity). When the property is in an IBC, you don’t pay the stamp or transfer tax, you have an added layer of asset protection (if someone sues you in the US, they can’t touch your Belize asset), and you have improved liquidity when you sell the property and remove liability. 

It is very common for people to purchase an off-shore investment property or real estate using an IBC (International Business Company). Most clients we work with at RE/MAX Belize want to own the property through a corporate entity. There are various reasons and benefits for owning a property in a corporate entity like an IBC, but one primary factor is having no stamp or transfer tax when buying Belize property. When a property is purchased without an IBC from a foreigner there is an 8% stamp transfer tax. When you buy a Belize property with an IBC there is no stamp or transfer tax.

 

Advantages of Owning Belize Property in an IBC

Owning property in an IBC offers more than just tax optimization. There are a number of reasons and benefits associated with owning a property in Belize through an IBC. Some of the advantages of owning a property in an IBC and why we at RE/MAX Belize suggest buying property in an IBC include;
  1. Tax optimization as you don’t have to pay stamp or transfer tax.
  2. Asset protection as it protects your Belize asset.
  3. Improved liquidity when buying or selling a property. 
  4. Faster transfer of ownership.
  5. Keep the owner’s ambiguity and privacy.

When a property is owned through an IBC, you still own it outright with full foreign ownership. You own the IBC and the IBC owns the property with a simple title. Today Belize is one of the largest leading centers for international banking in the world. 

The IBC laws were created and enacted to permit asset protection and tax minimization planning at competitive rates. Some of the attributes of an IBC are:

  • IBCs have an exemption from all forms of local taxation including Stamp Duty.
  • Speedy and simple registration. Also faster transfer of property.
  • Only one shareholder and one director are required.
    • Limited filing requirements (certificate of incorporation, memorandum, and articles of association).
    • No exchange control.
    • Low registration fee for new corporations.
    • Low continuation fee.

There are a number of reasons why we suggest clients buy a property in an IBC or form an IBC upon closing. It is one of the many great tools and advantages of buying Belize real estate. It is also an incentive for foreign real estate investment. 

 

Countries That Have IBCs

The list of off-shore countries and jurisdictions that use and practice IBCs is pretty long. They are a common corporate entity in any low-tax jurisdiction. The countries that have IBC laws and you could see owning a Belize property include:

  • Antigua and Barbuda
  • Anguilla
  • Barbados
  • Bahamas
  • Belize
  • Brunei
  • British Virgin Islands (BVI)
  • Cook Islands
  • Comoros
  • Dominica
  • Grenada
  • Gambia
  • Mauritius
  • Marshall Islands
  • Montserrat
  • Nauru
  • Saint Lucia
  • Samoa
  • St. Kitts and Nevis
  • St. Vincent
  • The Grenadines
  • Seychelles
  • Vanuatu.

An IBC is an offshore company that is usually formed as a tax-neutral entity meaning that it is not taxable in the country where it was established or the jurisdiction of incorporation. 

 

The Differences Between an LLC and IBC

An LLC & IBC in many regards performs the same function. This leads many people to ask “why wouldn’t I just use an LLC?”

So, what is the difference between a Limited Liability Company (LLC) and an International Business Company (IBC) in Belize? Well, both an LLC & IBC are quite similar to each other, they however have differences when it comes to ownership and management regulations.

The main difference between the two is that an IBC in Belize can be owned by a board of directors and have shareholder ownership. By contrast, an LLC in Belize, much like a combination between an LLC (limited liability company) and a partnership, does not include shareholders but members, and managers are in charge of the company control. An LLC will still have tax obligations if the owner of the LLC is a resident in their jurisdiction. This makes an IBC far more desirable than an LLC for owning property in Belize. 

 

An International Business Company (IBC) is essentially a private company (similar to an LLC) that is established in compliance with the laws of jurisdictions and used as an off-shore corporate entity for doing business overseas and in an off-shore market. An IBC can be used for a multitude of reasons, one of which is purchasing and owning real estate.

An IBC in Belize is established under the Belize International Business Companies Act. That being said, it is very common for a Belize property to be held in an IBC that is not in Belize. Belize is widely renowned for its growing financial offshore system and among the most advanced and user-friendly IBC laws in the world.

An IBC allows a foreign or offshore investor to engage in a diversity of activities with regard to asset protection, opening bank accounts, purchasing real estate, and many other international commercial transactions.

 

An IBC or owning Belize property in an IBC is a great tool if you are wanting a way to amass wealth in the short term and the long term. Owning property and utilizing an IBC also prepares for the future and sets up a way to preserve wealth and prepare for retirement abroad. If you have questions about IBCs and owning property in an IBC contact us at RE/MAX Belize. We can help answer your questions and ensure you have everything set up for your off-shore investment. 

 

Reason To Invest In Belize

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;

You have 2 avenues when it comes to a real estate investment; property appreciation & yield/cash flow. That said, when you are looking at investing in an offshore market like Belize, there are 4 pillars a person should look for regarding real estate investment;
  1. 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.
  2. Capital Growth: The appreciation of an asset. Belize is growing, and with growth comes increased demand. Belize is an appreciating market.
  3. 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.
  4. 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.

Trade Agreements

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.