5 Mistakes People Make When Investing Offshore & How to Avoid Them

Investing Offshore Mistakes to Avoid

There are a number of mistakes people can make when investing offshore or purchasing a vacation home in a market outside the US or Canada. Belize Real Estate has become increasingly popular for investors and people looking to relocate to a warm tropical climate. There are far more than 5 mistakes people make when investing offshore, but we are going to touch on 5 of the most common. Here are the 5 Mistakes people make when investing offshore & how to avoid making them yourself.


5 Mistakes People Make When Investing Offshore

  1. Buying Real Estate Without Using an IBC.
  2. Buying or Selling Property Without Taking Advantage of “Owner-Carry Financing”
  3. Buying for Personal Use & Investment without a Strategy.
  4. Buying Property in an Overly Saturated Market.
  5. Buying Without a Reliable Ownership Structure


1. Buying Without Using an IBC (International Business Corporation)

Owning property in an IBC (an entity structure separate from yourself) will protect your personal assets and give you numerous advantages. Setting up an IBC takes less than 96 hours.

Advantages of using an IBC

  1. Protection from Lawsuits
  2. Save Thousands of Dollars
  3. Privacy
  4. Higher Return on Investment
  5. Tax Minimization
  6. Simplicity of Ownership
  7. Asset Protection


TIP: Look for properties already in an IBC!


2. Not Planning an Exit Strategy

Selling Your Offshore Investment

Many offshore markets have expensive bank financing, giving you the opportunity to maximize your profitable return by offering your buyers owner carrier financing, at terms you set.

For example, you purchase a lot for $200,000 & now it’s worth $300,000.

You add a traditional cash sale:

Cost: $200,000

Resale: $300,000

$300,000 (sale price) – $200,000 (cost of property) = $100,000 ROI (Return on Investment).

You offer the buyer financing with 20% down, 10% interest, and a 5-year term

Cost: $200,000

Resale: $300,000

= $100,000 profit

+ $82,000 in interest.

= $182,000 ROI (Return on Investment)

As you can see, this structure adds significant percentage points to your ROI. When you offer to owner finance a property you not only improve your ROI, but you also improve the liquidity as you greatly increase your prospective buyer pool. The larger the buyer pool, the easier and faster you sell a property. It is difficult for foreigners to obtain financing in most offshore markets. If you offer seller financing on your property you maximize your return. It is also important to consider your “exit strategy” on any investment property.



3. Buying for Personal Use & Investment

What to look for in a personal use property

  1. Personal style
  2. Specific colors/landscaping
  3. Close to Downtown
  4. Who are the neighbors
  5. Is the area quiet
  6. Is the land fully developed

What to look for in an investment property

  1. Is it the path of progress
  2. Is there a potential upside
  3. Where are the value adds
  4. What can be improved
  5. What is the ROI
  6. How long do I want to hold
  7. What financing terms can I obtain

Look deeper and identify what type of property is going to meet your needs.



4. Buying Real Estate in a Saturated Market

Infancy Markets Competitive Advantages

Buying within an infancy market isn’t always a great investment opportunity. With that said, properties within an infancy market have the most potential upside in the future. The key: finding something within an infancy market that lies in the path of progress. Examples would be Ambergris Caye Real Estate & Belize Real Estate.

Reasons to Invest in Belize

Investing in Ambergris Caye Real Estate


Buying in a Saturated Market

We’ve all heard the age-old saying, buy low sell high. The vast majority of properties within a saturated market are already overpriced and thus in these conditions, it is much harder to find good, let alone great investment opportunities.


5. Buying in a Market with Poor Ownership Structure

When you are buying real estate offshore you want to make sure that you are buying in a country/market that offers full foreign ownership and fee simple title, You also want to buy and invest in a market where the government is in favor of foreign investment. An example of this would be, Belize.

Belize is a member of the British Common Wealth and practices British Common Law, as such its systems are nearly the same as Canada, Great Britain, and the United States. The fee simple title owner has the right to possess, use the land and dispose of the land as the owner wishes-sell it. In Belize, you own your property outright and can give it away, trade it for other things, lease it to others, sell it, or pass it to others upon death.

In countries like Mexico, Panama, Costa Rica, and Honduras, owning property as a foreigner is far more difficult and there are restrictions in place. Mexico does not directly allow for foreign property ownership and forces investors to jump through hoops to “own” their property. You must incorporate through a Mexican corporation with a Mexican Director and sift through the confusion and grey areas to do so. When buying or investing in Mexico, it is hard to tell if you ever truly own anything.

It is also important to note that most offshore markets have squatting rights. This is not the case in Belize. Belize does not recognize squatters and squatting rights are not a concern.

Advice: Before you invest in an offshore market, invest in your education.


When making an offshore investment take the time to attend webinars, read investment guides, talk to the right people, and research everything you need to know before pulling the trigger.


Investing in Belize Real Estate

Belize is like foreign investing on training wheels; everything is in English, we have full foreign ownership, practice British Common law, fee-simple land title, etc.




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 fee 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.