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
- Tax optimization as you don’t have to pay stamp or transfer tax.
- Asset protection as it protects your Belize asset.
- Improved liquidity when buying or selling a property.
- Faster transfer of ownership.
- 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
- British Virgin Islands (BVI)
- Cook Islands
- Marshall Islands
- Saint Lucia
- St. Kitts and Nevis
- St. Vincent
- The Grenadines
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.