In line with the legal changes proposed by the OECD regarding tax avoidance and following in the footsteps of other jurisdictions called “offshore”, Belize has approved its substance law (hereinafter “The Law”) at the end of 2019, which it shares almost entirely the characteristics of the substance law approved by BVI in early 2019.

The Law exhaustively mentions which activities will be considered relevant and, therefore, must comply with certain substance requirements. They are:

• Banking;
• Insurance;
• Fund administration;
• Finance and leases;
• Company headquarters;
• Maritime business;
• Holding company or holding company (holder of pure capital);
• Intellectual property;
• Distribution / Service and Business Center.

With regard to Holding companies, the Law mentions that such companies should be considered as those that only hold shares in other companies in their assets, and holding companies that own assets such as real estate, yachts or other assets are exempt from the responsibility of complying with the substance in Belize. bank accounts.

On the other hand, the Law establishes that all the legal entities of Belize, whether or not they carry out relevant activities, must comply with a reporting. The same will be for the only time in the case of Intellectual Property and annually for all activities.

Exceptions:

• Companies that do not have a commercial activity do not apply substance requirements.
• Companies that demonstrate that they are managed and are tax residents in other countries do not apply substance requirements.

Deadlines:

The deadlines are as follows:

• One-time Intellectual Property Reporting – deadline March 31, 2020;
• Reporting for all activities must be carried out according to the fiscal period of each entity, the following being the same:
  • For companies incorporated before January 1, 2020, the fiscal period begins on April 30, 2020 and ends on April 30, 2021. These entities must report nine months after the end of the fiscal period, before 01 of January 2022;
  • Companies incorporated after January 1, 2020, the tax period ends 12 months after the date of incorporation, and reporting must be done nine months after the end of the tax period.

As for the annual reporting, depending on what type of company it is, that is, if it carries out a relevant activity or not, it will be determined which form it corresponds to complete in order to notify the government of Belize.

Please find attached a Regulatory Flowchart in Belize explaining the substance in Belize. In case you understand that your company could apply in any of the relevant activities mentioned above, let us know to comply with the regulations.

If you have any queries or concerns regarding the substance in Belize, do not hesitate to contact our team of professionals who can advise you on the matter.

Best regards,

Insight Trust team.