Discover the key steps to starting a business in Belize, from understanding the economic landscape to navigating legal requirements. Learn about business structures, banking, and taxes in this expat-friendly guide to entrepreneurship in Belize.
Belize may have Central America’s smallest economy, but this means that it’s a nation eager to encourage outside investment as a means of accelerating growth.
According to Luigi Wewege, the President of Caye International Bank on the island of Ambergris Caye, “Belize presents a unique opportunity for international investors looking to establish a foothold in Central America. With its stable economic growth, English-speaking workforce, and favorable tax environment, Belize offers an enticing landscape for both new and established businesses.”
For expats, this is a golden opportunity to build a business in a country that’s on an upward trajectory. In this article we offer an overview of the primary steps to take when starting a business in Belize.
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— Luigi Wewege (@luigiwewege) April 17, 2024
Understanding Belize’s Business Climate
Belize’s economy has grown significantly in the past few years, with a 4.5% rise in GDP reported in 2023 while unemployment fell to just 3.4% after the high rates of the pandemic.
With this in mind, the Belizean business environment presents a mix of opportunities and challenges. And for expats moving to Belize, the fact that it uses English as its official language minimizes many of the communication obstacles that exist for overseas entrepreneurs in other parts of Central America.
The major sectors to consider entering include:
- Tourism: This sector drives the economy, accounting for 15% of GDP. As such, starting a hospitality or tour-related business can be profitable.
- Agriculture: Belize offers fertile land for farming ventures, and this sector generates around $238 million annually.
- Offshore Services: Low taxes attract international investors to establish companies here. Providing services internationally while having your base of operations in Belize is therefore an option.
Even in light of all these opportunities, the bureaucracy of launching a new venture can get tricky. Agencies like the Belize Trade and Investment Development Service (BELTRAIDE) offer valuable support in this context.
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Choosing the Right Business Structure
In Belize, common options for how to structure a business include sole proprietorships, partnerships, limited liability companies (LLCs) and international business companies (IBCs). Here’s the ins and outs of each:
- Sole Proprietorship: Easiest to set up, and suitable for small businesses, the main caveat to a sole proprietorship is that they leave you personally liable for your firm’s financial obligations.
- Partnership: This is a good choice if you have a business partner, as you get shared responsibilities and also shared liabilities.
- LLC: This offers liability protection and credibility, but requires more paperwork and involves additional compliance steps and expectations.
- International Business Company (IBC): This is for expats who want to register a business in Belize, while not actually doing any business with residents of the country.
For expats aiming for minimal hassle, LLCs are usually the best bet due to their flexibility and legal protections. Of course if you’re looking to base your business in Belize without being taxed in any way, then an IBC is a good fit.
Wrangling Legal Requirements
Belize has straightforward legal requirements, but you must follow them to the letter. Key steps include:
- Registering Your Business: This is necessary for all structures, and the process takes around one week.
- Secure Work Permits: These are required for expats intending to work in their businesses. You can apply through the Department of Labour.
- Trade Licenses: These are essential if your business operates within a town or city. You’ll have to go through the local council in your chosen region to acquire them, and an interview is usually involved alongside the submission of paperwork.
Asking experts for advice is advisable to avoid costly missteps at this stage. It’s all part of equipping your new commercial venture for success, and is just as important as recruiting the right team members and acquiring tech solutions to catalyze your operations. The more specialized, the better – so if you’re going to use electrical contractor scheduling software to organize your workforce, look for guidance from legal experts who have experience of this industry niche as well.
Dealing with Banking and Taxes
Getting your financial setup right from the start is another unavoidable requirement. Belize offers several banking options tailored to businesses, including local and international banks. Key steps include:
- Opening a Business Bank Account: Choose between domestic banks like Heritage Bank or international banks like the Belize-based Caye International Bank.
- Understanding Taxation: Belize has no capital gains tax and a relatively low corporate tax rate (ranging from 1.75% to 25%).
Here are a few further considerations:
- Register for the General Sales Tax (GST) if your annual revenue exceeds $75,000 BZD ($37,000 US).
- Consult with a local accountant for compliance on income taxes.
- Plan for employee-related costs, such as social security contributions.
As with any new business, being on the ball with the financial aspects of your Belize-based startup is better than leaving this to chance. And if you’re not experienced with money management, outsource this rather than taking any chances.
Have you ever dreamed of starting a business in Central America? Here are some common ways how expats finance their dreams.https://t.co/cP2xOSYZ8y
— Central America Living (@VidaAmerica) April 29, 2024
Final Thoughts
These steps are only the beginning of a much longer journey that will lead you to running a robust business in Belize as an expat. There’s no point pretending that this will be easy – but if you are prepared for what’s to come and you have a good group of local experts in your corner as well, you will no doubt see your firm flourish.
