The accounting requirements in Belize concern the preparation and the maintenance of relevant accounting records for IBC structures, one of the most commonly used legal structures. Our accountants in Belize can assist you in any accounting matter.
According to the Accounting Records Act, the main four issues to consider for accounting purposes in this jurisdiction are the following:
- – preparing the documents: these include those accounting records referring to transactions and assets;
- – storing the documents: they can be kept either in Belize or in another location, as preferred by the company directors.
- – making the records available: upon request, the registered agent is required to make the accounting documents available irrespective of the location where they are stored.
- – retaining the records: a specific timeline of five years must be observed for keeping the accounting records in Belize.
The Belize offshore company formation process is a simple one and has a minimal number of requirements. Until recently, there were no accounting requirements in Belize, however, these were implemented but are not considered burdensome for investors.
|Accounting standards in Belize||
The International Financial Reporting Standards (IFRS)
Laws governing accounting requirements in Belize
|The Income and Business Tax Act and its amendments|
Accounting profession supervisory authority
|The Institute of Chartered Accountants of Belize|
|Bookkeeping||Internally generated financials|
|Payroll requirements||Not applicable|
Proper management of issued and received invoices
Cashflow statements reflecting the inflow and
|Reporting||Annual returns and accounting records|
|Forensic accounting||Upon request, in cases involving money laundering, fraud, other financial crime|
|Tax compliance||As per the new tax rates applicable on the company's chargeable income (according with the annual gross receipts)|
|VAT compliance and reporting||Belize does not impose VAT|
|Audit as part of accounting requirements in Belize||When requested by the authorities|
|Tax authority assistance||Our team of accountants in Belize helps represent clients in this country in front of the relevant authorities|
|Accounting for voluntary dissolution||Professional assistance, upon request, for transferring assets and settling debts towards creditors as part of the steps to close a company in Belize|
|Accounting requirements in Belize for foreign companies||International Business Companies that maintain a physical presence in Belize are also required to submit annual tax returns and accounting records|
Accounting records for offshore companies in Belize
The Belize Accounting Records (Maintenance) Act is the legal resource for accounting and reporting matters in the country. The Act was issued in order to improve the regulatory framework but it is not impeding on foreign investors who wish to open an anonymous company in Belize. The provisions of this Act apply to the International Business Company (the well-known IBC) as well as to the Belize International Trust.
The Act requires that all companies in Belize keep their accounting records at their registered office in Belize or at their Registered Agent’s office in Belize. Alternatively, these may be kept at another location in or outside of Belize, should the company directors see fit.
The accounting records refer to the following documents:
– the assets and liabilities record;
– the sales and purchases record;
– all financial transactions.
These accounting records are to be kept for a period of at least five years following the date of the transaction, the closure of an account or the termination of a business collaboration.
There are no mandatory requirements for a Belize IBC to prepare and submit the annual financial statements and there are no mandatory requirements for audits. If you need accounting services, our accountant in Belize is at your disposal.
Other requirements for companies in Belize
Investors in Belize benefit from a light accounting reporting regime and the financial accounts are not accessible to the general public. The Belize IBC does not have to report to the Tax Authorities or to the Registrar of Companies.
Companies in Belize may prepare the financial statements and the accounting records as per the International Financial Reporting Standards asBelize has not adopted any particular accounting standards or a particular accounting framework. The International Financial Reporting Standards (IFRS) are permitted in Belize in case of domestic public companies. Since there is no stock exchange in this jurisdiction, the standards are required for domestic banks (required by law) and permitted for other types of companies. The IFRS for SMEs is also permitted. The difference between the IFRS and the IFRS for SMEs is that the latter includes a more simplified policy as the general accounting principles are simpler in the case of small and medium-sized companies. These types of legal entities are subject to fewer disclosure requirements.
As an alternative, companies in Belize can use other international financial standards, such as the U.S. Generally Accepted Accounting Principles (GAAP). There are ten GAAP principles and they refer to regularity, consistency, sincerity, permanence, non-compensation, prudence, continuity, periodicity, materiality and good faith. The purpose is for financial reporting to be transparent and standardized under the GAAP rules. It is a common practice for particular businesses to follow an industry-specific GAP model. These are designed to comply with and reflect the different complexities that may arise in a particular area of business. The preferred accounting method – IFRS or GAAAP – can depend on the company size, type of business and international presence.
Requirements for banks and financial institutions presented by our accountants in Belize
Licensed banks and financial institutions are required to submit the following documents to the Central Bank. These are the following:
- – unconsolidated financial statements: these are to be signed and audited, contain the auditor’s full report as well as additional notes and other communications.
- – list of shareholders: all of those who are included on the register for any class of shares, with the number of shares they hold and the percentage of the ownership as per the class of shares.
- – identification documents: the name, address and occupation for every director of the licensed company.
- – others: in some cases, the annual report is also required (applicable to financial holding companies, for example).
Banks or financial institutions that fail to comply with the reporting requirements are to receive a written notice from the Central Bank and they are subject to a fine that cannot exceed the thousand dollars for each day of the delay. This provision does not apply when an extension of the period has been expressly granted by the Central Bank.
The submission date is within four months of the end of the financial year or longer (if permitted in writing by the Central Bank). One of our agents who specialize in Belize company formation can provide investors with more details about the special requirements for banks and financial institutions.
Foreign investors who wish to open a company in Belize that engages in financial activities should know that for foreign licensees a provision is in place according to which they must appoint an approved auditor each year. The auditor needs to be approved by the Central Bank and must be a member of the Institute of Chartered Accountants of Belize (and hold a practicing certificate issued by this authority). In addition to the licensing requirements, other qualifications for the auditor shall include experience in the auditing of banks and financial institutions and the fact that he must be independent from the subsidiaries, affiliated, directors and offices of the licensee for which he performs the duties. When an auditor is appointed, this must be notified to the Central Bank. If there is valid reason to believe that the appointed individual is not qualified, then the Bank shall notify the licensee of such disapproval. In the same manner, the resignation of an appointed auditor or the termination of appointment are to be notified to the Central Bank (regardless of the reasons for which this occurs). Companies that fail to comply with the requirements concerning auditors are subject to fines (up to a maximum amount).
As seen from the following provisions, the accounting, auditing and reporting requirements for banks and financial institutions are subject to certain requirements, which are only briefly discussed herein. We recommend reaching out to one of our agents for more detailed information on this topic.
Using the International Financial Reporting Standards in Belize
As companies can opt for using the IFRS in Belize (including for small and medium-sized companies), our team of Belize company formation agents highlights the main key provisions of these standards.
The complete financial statement set includes the balance sheet, the statement of comprehensive income, the cash flow statement, the changes in equity statement, the description of the accounting policies and the relevant notes to the financial statements, as needed.
The balance sheet is one of the most important statements and the one that reflects the company’s financial situation at a given time. The following data should be included:
- – the assets: the financial and intangible assets, the property and equipment as well as the investment property, cash and cash equivalents, deferred tax assets, trade, and other receivables;
- – equity: the issued capital and reserves;
- – liabilities: the financial and tax liabilities, the deferred tax liabilities;
- – the assets and liabilities for sale: the total assets that can be qualified as being for sale.
As far as intangible assets are concerned, they are defined in the IFRS as those that are non-monetary without physical substance. They are included into two categories: those that can be sold, transferred or licensed and those that arise from contractual or legal rights.
The statement of comprehensive income also includes important information about profit or loss. Included here are the gains and losses, the revenue, the impairment losses, the tax expenses. Additional items can also be highlighted in this statement when the information is relevant for the overall financial situation of the company.
The cash flow statement is another one of the main types of statements that are included in the financial reporting principles, along with the balance sheet and the statement of comprehensive income. It presents the manner in which the cash and cash equivalents were used according to relevant categories like operating, investing and financing, all in specific periods of time. In the general financial situation of the company, it is useful for determining the legal entity’s ability to generate and use cash resources. The cash flow from activities related to investing and financing are reported separately. The same applies to cash flows resulted from dividends.
The statement in changes in equity is another type of statement that refers to the total comprehensive income for a given period. It highlights the reconciliation between the carrying amount at the beginning and the end of the periods for each component of equity.
Other issues to which the IFRS provides guidelines for companies include the change of accounting policies, segment reporting, the presentation of current assets and liabilities, the borrowing costs, related party disclosure, employee benefits, provisions for consolidated and separate financial statements and other topics.
The local relevant organization for accounting purposes is the Institute of Chartered Accountants of Belize (ICAB).
Our accountants in Belize invite you to watch the following video on the main accounting requirements in this country:
General steps for Belize company formation
All companies in Belize need to be registered with the Companies and Corporate Affairs Registry. The Registry is also the one to handle business name registrations and with which traders can subject a full company search for an existing company.
The following list of required documents applies for the registration of a company limited by shares:
- application for registration (it can also be referred to as the cover letter requesting the registration);
- proof of fee payment, as per the fees currently in place; this can be accomplished through an online transfer (which will include information about the account holder and the bank from which the transfer is made);
- the filled in name availability form;
- the company’s constitutive documents, the Articles of Association and the Memorandum (one copy remains with the Registry);
- valid identification documents, the valid IDs of the shareholders and directors; when the shareholder is another legal entity, the ID of its representative will be provided;
- proof of address, by means of an utility bill, a rental agreement or another document; when a utility bill is used, it must not be older than three months;
- a central bank approval letter to hold shares for non-residents; our team of Belize company formation agents can give you more details about this particular request.
The same checklist also applies for the company limited by guarantee, with an important additional request that it must include a letter addresses to the Minister of Finance in which permission is requested to use the word “Limited” in the name of the company. This request is done pursuant to Section 20 of the Companies Act.
For a limited liability partnership, the requirements also include that to provide a declaration of oath by each partner in which it is stated that the individual has not been convicted of any offence within the last three years (offence including dealing with illegal drugs, money laundering or dishonesty in Belize or in another jurisdiction).
When an overseas company requests registration in Belize, it must also provide a Certificate of Good Standing that proves the respective company is not a newly incorporated legal entity in that jurisdiction. What’s more, it will also include a certified copy of the articles of association of the company abroad (with a certified English translation, if the original document is in a foreign language).
Some of the fees that were applicable for the registration of a limited share capital company (when this article was written) were 50$ for the registration of a maximum number of 20 members and 125$ for companies with 21 to 100 members.
Our team can help you open a bank account in Belize as part of the needed steps.
You can also rely on our team if you need assistance for temporary residence or permanent residence. We will help you understand the residency in Belize process, where to apply, what the current fees are, and how to fill in the residence forms and submit the additional supporting documents. You can reach out to our team at any time if you need to know more about how to remain in Belize.
Permanent residents can also apply for Belizean citizenship by registration. This is possible after at least five years spent in the country as permanent residents, and if during this time they did not leave the country for more than thirty consecutive days or more than three months in a twelve-month period. If you are interested in applying for this status, our team can give you more details.
Additional incorporation and company requirements
While the accounting and reporting requirements for a company in Belize are very important, most investors are advised to seek information about the steps required prior to the moment when the company needs to make these submissions. This is to say that investors are advised to also seek information on the general rules for incorporation, as they appear in the Companies Act and the Business Names Act. This helps ensure that the Belize company is properly registered and that it will encounter no issues on this part. Once the set up is complete, investors can reach out once again to our Belize company registration specialists for more information on the accounting requirements in Belize, in greater detail than presented herein.
Another important step to be completed for the purpose of opening an offshore company in Belize, apart from preparing and submitting the documents presented above, is to register the name of the new business with the Companies and Corporate Affairs Registry.
For this step, the following are provided:
- – cover letter for registration;
- – proof of name registration fee payment;
- – filled in name availability form;
- – filled in form, according to the type of business for which the name is registered (individual, partnership or corporation);
- – valid identification documents and proof of address (as summarized above).
It is important to note that foreign entrepreneurs are required to apply for the name of the company together with a Belizean partner or another individual who holds permanent residence. This is a requirement to be able to register a business name and our team of company formation agents provide assistance for this matter in our company formation package.
All registered companies in Belize are required to notify the Registry of any changes in their business particularities. These refer to the business name, changes in the business name particulars, the transfer of shares, and others.
Foreign investments in Belize
In summary, companies in Belize are not subject to taxation (corporate income tax, value-added tax, withholding taxes on dividends or others) and thus they are not subject to monthly or annual tax filing requirements. While banks and other financial institutions are required to comply with certain standards, these are easy to adopt since they are the International Financial Reporting Standards (or other standards that are recognized on an international level). The light accounting and reporting requirements, along with a number of other advantages for investors, including high confidentiality and anonymity, are important advantages for those who want to open an offshore company in Belize.
Belize’s attractiveness as an offshore jurisdiction is reflected by the following numbers:
- – 3%: the real GDP expansion in Belize in 2018;
- – 3.4%: the rise in primary production in 2018;
- – 6%: the increase of international tourist arrivals in 2018 (to 1.4 billion individuals), according to the World Tourism Organization;
- – 102.8 million $: the domestic banking sector’s profits in 2018, compared to 41.6 million $ in 2017.
The data was provided by the Central Bank of Belize, in its 2018 Annual Report.
Working with our accountants, as well as our partner lawyers in Belize, will offer investors the opportunity to ensure that they receive well rounded, professional services for their business and offshore activities in Belize. Some of the areas of practice covered by our lawyers include offshore and corporate services, intellectual property law, employment law, or real estate matters.
Those interested in immigration to Belize will often follow the residence process and will be interested in the ways in which they can acquire citizenship, thus making their stay in the country final and permanent. Our team can answer questions concerning all of these matters and will provide guidance throughout the mandatory stages. You can reach out to us for details.
You can contact our accountants in Belize for more information and details on how to open an offshore company and the requirements for the IBC.