Our agents specializing in company formation in Belize assist foreign companies that are ready to expand their activities to this jurisdiction through a branch office.
Table of Contents
What are the characteristics of the branch?
A branch is an extension of a foreign company that is not in itself a separate legal entity but engages in the same business activities as its parent company.
The branch has the following characteristics:
- It does not have legal or procedural capacity, meaning that it cannot sign contracts or commence litigation in its own name;
- The foreign company is liable for the debts and liabilities of its Belizean branch;
- When a foreign entity decides to open a branch in Belize, it will provide adequate information about its registration in its home country and its financial records;
- The branch can hire employees in Belize and will observe the local labour rules.
What are the general steps for branch creation in Belize?
A foreign company can decide to open a branch in Belize once it has determined that expanding its operations to this country is beneficial for expansion.
The parent company shall take into account the following steps when opening a branch in Belize:
- Draw up the Board’s resolution or decision to open a branch in Belize;
- Prepare the documents required to set up the local branch, such as the parent company’s articles of incorporation and updated financial information;
- Appoint a local representative in Belize;
- Obtain the authorizations for the branch and register it in Belize;
- Observe any required post-registration steps, such as making any tax registrations or hiring employees in Belize.
What documents are required to open a branch in Belize?
For those companies that will establish a branch office in Belize, the application dossier includes the following:
- The application letter. This contains the reason for opening a branch in Belize, the proposed name, and the main activities that will be carried out through this permanent establishment;
- A business plan for the branch: this must be a comprehensive evaluation that will include the projected financial statements, along with other information;
- Details on the foreign company’s involvement in the branch’s activities in Belize;
- Information on the foreign company’s organizational structure and the management structure for the branch;
- Other details on statutory auditors, internal rules, and others.
The application will also include the foreign company’s Board resolution to appoint a branch representative in Belize. The proposed manager shall be a resident and they are required to provide identification information:
- Notarized proof of identification (ID, passport);
- Two character references;
- Financial reference;
- Proof of address;
- CV and proof of qualifications for the role;
- Police certificate and other due diligence checks, as may be required.
The branch registration documents will also reference the chain of command, meaning that they will indicate the officer in the parent company to whom the locally appointed branch manager will report.
Please note that the authorities may request additional documents on a case-by-case basis. Our team can help you open a company in Belize. They will be able to answer questions about branches as well.
What are the taxes for branches in Belize?
Branches in Belize are taxed on the income they derive from their local activities.
The corporate income tax regime in Belize depends on the industry in which the company operates. Our team highlights some examples below:
- Gross receipts from real estate businesses is subject to a tax of 1.75%;
- Receipts from insurance companies that are properly licensed are also subject to a tax of 1.75%;
- The income of a financial institution licensed under the Banks Act is 15%;
- Casinos and licensed gaming premises are subject to a gross earnings tax of 8%;
What tax compliance requirements are in place for branches?
Companies follow the requirements to fill in the business tax return, completed according to the type of business activity they are involved in.
In principle, companies in Belize file the annual tax return before the end of March, the year following the one for which the return is prepared.
The annual tax return is accompanied by the proof of payment of the estimated tax that us due. This tax can be paid at the Belize Tax Service Department in the area in which the branch is based or, more commonly, online.
Tax payments in Belize are made either in BZD or USD, and various forms of payment are accepted. The company is issued a payment confirmation once the due tax is paid.
Branches with an annual income above a certain threshold may be required to present audited financial statements. This may also be required in other cases, according to the law.
Penalties are in place for late or non-filing as well as for late or non-payment. It is common to incur a 10% penalty fee (calculated as a percentage of the due tax) for late payments.
Contact us for more information on how to set up a branch office in Belize or for ongoing compliance assistance if you have already met the registration requirements.