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Receiving Tax Concessions as an Onshore Company in Belize

Posted by Georgetown Trust on Aug 19, 2015 11:34:08 AM

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If you're thinking about starting a company in Belize, you should be familiar with Chapter 250. This law dictates exactly what it will take in order for a business to become a legal, registered and operational company operating within the country under the Belize Companies & Corporate Affairs Registry.

As a Chapter 250 or onshore company, you won't automatically receive the same tax concessions and benefits as international companies who are merely headquartered in Belize.

However, Chapter 250 companies can still be granted tax concessions by the government if they meet certain prerequisites. Find out what, exactly, the Belize government will consider when granting tax concessions to onshore or Chapter 250 companies.

Level of Investment Made

Perhaps the biggest factor that the Belize government takes into consideration when granting tax concessions to onshore companies is what kind of financial investment has been made by the company.

A business that spends the bare minimum without investing heavily in the country, for example, would likely not be granted duty-free concessions when importing or exporting goods.

On the other hand, a business that invests millions into the infrastructure and resource development needed to expand in Belize might qualify for a range of tax concessions.

Creation of Local Employment

Companies who plan to bring in foreign employees to work in Belize are considered to be taking much of the wealth back out of the country. Onshore companies that have a plan in place to hire as much local talent as possible, thereby increasing potential income tax revenues for the Belize government, is far more likely to receive concessions.

Type of Industry

The exact industry of the business in question is also of great importance to the Belize government. Agriculture and small-scale construction, two industries already popular among local business owners, are less likely to get tax benefits.

Industries introducing new ideas and with greater profit potential, including but not limited to finance, manufacturing and computing, may be more appealing to the Belize government and therefore more likely to receive tax concessions.

Transfer of New Technology

To the Belize government, bringing in new technology is more valuable than even money. Therefore, any onshore companies planning to introduce new methods, software or technology can typically expect to be viewed favorably, often resulting in the granting of tax concessions to help keep business profits channeled back into the country and its technological expansion.

Final Destination of the Products or Services

Another heavily considered factor is what happens to the final products and services. Essentially, this question is asking who is paying for the goods.

If a company operating in Belize is selling goods out of the country, it is effectively bringing new cash into the local economy, a positive step and something the Belize government is excited about.

Profits on Investment

Throughout the world, and certainly in Belize, governments generally want businesses to succeed. Onshore companies in Belize that are set to make monumental profits may not necessarily qualify for tax concessions. 

With that in mind, however, those who plan to reinvest those profits into the local economy, employ residents of Belize and introduce new technology would almost certainly qualify.

In order for onshore companies registered under Chapter 250 to qualify for tax concessions from the Belize government, they should keep in mind all of the considerations listed above as well as other factors such as the location of their offices and even their potential for foreign exchange earnings.

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Topics: Belize Local Companies