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Did anyone notice that Belize abolished their offshore regime in October 2019?

blockchain4ever

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I spent some time reading through the amendments to the International Business Companies Act in Belize.

TL;DR

Your IBC in Belize can not carry out any commercial activity, cannot hold IP, and must do everything from within Belize. These rules will change every 2 months.


In 2018, the law said the following:

82A. In this Part -
"relevant activities" means the activities that are licensed under the International Financial Services Commission Act. Cap. 272;
[ Comment: these are service providers, not offshore companies themselves ]

82B.
(1) Where a company engages in a relevant activity, that company shall be physically present in Belize. [ Comment: all agents and even accountants must be physically present in Belize]
(2) A company that engages in any other activity pursuant to section 5( 1) may decide to be physically present in Belize and once the company has taken steps to comply with the physical presence requirement, that company shall not change its position of fulfilling physical presence for a period of at least five years.

(3) For the purposes of subsections ( 1) and (2), physically present includes the following -
(a) the employment, whether directly or indirectly, of a sufficient and adequate amount of suitably qualified persons to carry out its core income generating activities;
(b) expenditures consistent with the size of the business relative relation to the nature and complexities of its relevant activity; and
(c) the control and management activities are conducted from Belize either directly or through a management agency.
(4) For the purposes of subsection (3)(a), core income generating activities of a company may include the activities of sectors specified, as follows -

[... lots of specific requirements that are hard to work around ... ]


In October 2019, it was amended like this:

82B.
(1) Where a company engages in a relevant activity, that company shall be physically present in Belize.
(2)Subject to subsection (2A), a company that engages in any other activity pursuant to section 5(1) shall be physically present in Belize.

(2A) Notwithstanding subsection (2), a company that is a pure equity holding company –
(a) is not required to be physically present in Belize;
(b) is required to comply with filing requirements under the International Financial Services Commission Act,Chapter 272, the Income and Business Tax Act, Chapter 55 and this Act;
(c) shall have adequate human resources and premises for holding and managing equity participations in other entities in the jurisdiction where such equity is held; and
(d) shall comply with any other requirement set by the International Financial Services Commission including that which may clarify what constitute adequate in the circumstances.

So what is a pure equity holding company?

“pure equity holding company” means a company which -
(a) is a holding body;
(b) has as its function the acquisition and holding of shares or equitable interests in other companies;
(c) hold equity participation and earn only dividends and capital gains; and
(d) does not carry on any commercial activity;

AT THIS POINT IN TIME, MOST OFFSHORE COMPANIES IN BELIZE WERE ILLEGAL!!!

THEN 1 MONTH LATER they pass an amendment where the definition of "pure equity holding company" is deleted!

They even repeal the whole section above that they pushed through one month earlier!

"...blah blah...
(a) by repealing Part VI A comprising sections 82A to 82E (as inserted by Act No. 24 of 2018 and amended by Act No. 1 of 2019)" (Comment: Act No 1 was 1 month earlier!)

..and made it illegal to hold any IP. Rewriting the definition of a company under the Act:

"5(1) For the purposes of this Act and subject to sub-section (2), an international business company is a company that conducts any activity that is not prohibited under a law in Belize and shall not be treated as carrying on business with persons resident in Belize or carrying on business from an office or other fixed place of business within Belize by reason only that-
(a) it has a registered agent and registered office in Belize;
(b) it makes or maintains deposit with another company incorporated in Belize and carrying on a banking business within Belize;
(c) it makes or maintains professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, administration companies, investment advisers or similar persons carrying on business within Belize;
(d) it prepares or maintains books and records within Belize;
(e) it holds a lease of property for use as an office from which to communicate with members; or
(f) it owns a vessel registered in Belize in accordance with the Merchant Ships (Registration) Act.

(2) The provisions of the enactments authorizing the carrying on of a business in Belize including the fulfillment of economic substance shall override any contrary provisions contained in this Act.

...

(4) An international business company shall not acquire, hold, own or deal with any intellectual property asset,
"

[ You hold IP? Penalties: $25,000 for first offense, $100,000 for each subsequent offense]


NOW THE GEM! Read this gem of legislation:


"The principal Act is amended in Part VIA as follows:
(a) by repealing Part VIA comprising sections 82A to 82E (as inserted by Act No. 24 of 2018 and amended by Act No. 1 of 2019);
(b) by clarifying pursuant to section 26 of the Interpretation Act, that Part VIA - Beneficial Owners comprising sections 82B to 82E (inserted by Act No. 36 of 2017) which may be have been impliedly repealed by Act No. 24 of 2018 shall hereby be wholly revived, have and remain in full force and retroactive effect as if there was no implied repeal.
"

Translation: We did a bunch of patches in 2018 and 2019.. please, let's just revert all the changes we did in the legislation, reinstate the rules from 2017 and pretend nothing ever changed!


----------------------------------------------



Wtf is happening in Belize? They changed the IBC Act twice in 2019, once in 2018, and once in 2017. New sections inserted in 2018 are repealed and rewritten in 2019! Then a month later, they repeal all changes back to 2017. They don't even have proper PDFs published of these, just crappy photo copy scans.

Here's the smoking gun proving that Belize simply isn't a tax haven anymore. Please prove me wrong, but there is no way you can legally pay 0% tax in Belize except for holding companies. But holding companies pay 0% tax in EVERY f*****g COUNTRY IN THE WORLD. You can't do commercial activity, you can't hold IP.

I don't think the government of Belize knows what legislation they passed. Maybe they thought nobody would actually read the law?

"Notwithstanding the repeal of section 14(6), an international business company shall comply with substantial economic presence requirement as if the time of meeting such requirements were given under the amendment to the International Business Companies Act in Act No. 24 of 2018 in respect of physical presence." [Ref]


Absolute chaos!
 
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from the orbit as soon as EU collapses (which will be sooner than you think). That being said I would go for a BVI company instead of Belize.
Do you really think the EU will collapse? - maybe we should open a new thread to start this discussion.
 
It seems to me they've passed these laws just to comply with OECD and EU while in reality they don't enforce them. I have a feeling that all of these stupid laws will be nuked from the orbit as soon as EU collapses (which will be sooner than you think). That being said I would go for a BVI company instead of Belize.

If non-enforcement of laws is what they are offering, then there's a whole world of opportunities out there. Maybe Congo, Venezuela, Iraq, Burundi, Madagascar and others will want to join the list of attractive dysfunctional jurisdictions.
 
If non-enforcement of laws is what they are offering, then there's a whole world of opportunities out there. Maybe Congo, Venezuela, Iraq, Burundi, Madagascar and others will want to join the list of attractive dysfunctional jurisdictions.
If you want non-enforcement, just go to a place like Liberia or Congo, where it is so poor, civil servants aren't even paid half the time and you can basically buy off the bank manager with $500 in cash. None of the CRS rules will apply to you, not even facta, you will just have an account that operates outside of the system. Belize is f*****g up, passing any law to please the EU, they don't know what they are doing. Belize is not Congo or Burkina Faso where the civil servants and employees go routinely unpaid, they may enforce the law on you.
 
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I have a Belize company that serves as a layer to the UBO chain. Would you suggest me to kill it now or keep it for a month or so just to observe how new legal regime will actually affect current companies.

Actually I'm not certain what the law says as I couldn't find a consolidated version of the IBC Act. It looks fishy in that they go back and forth like that. They are forced to open up the IBC regime for local residents and it's probably difficult for them to find lawyers that are competent. I have no clue what they are doing actually, but it's not good when these acts change every few months.
 
Do you mean they are not really going to send UBO's applications of Belize registered international companies to the country of UBO and all that s**t with econimic substance requirements?
They had to implement substance requirements due to eurocrats harassing them. Whether they enforce it or not it's up to them. Right?

What I'm saying is they get too much money off renewal fees for them (or any other OFC for that matter) to abolish the IBC regime.

And UBO details are sent by the bank via CRS, not by your registered agent (unless you did something illegal with the company).
 
Seems that you haven't read all patches to that Belize law. According to them:
any commercial entity on Belize (except tax resident in a jurisdiction other than Belize controlled and managed outside of Belize) has to report its own type of report:
(a)in the case of an included entity (entity prescribed to have ECONOMIC SUBSTANCE ) , Form B prescribed in the Schedule is to be completed by the included entity;
(b) in the case of an included entity that is a holding company , Form C prescribed in the Schedule is to be completed by the holding company;
(c) in the case of a non-included entity, Form D prescribed the Schedule is to be completed by the non-included entity

And what's happened with those reports after:
12.-( 1) The competent authority (Belize Financial Regulator) shall upon the receipt of a form filed by an included entity spontaneously exchange the same with the competent authority of a jurisdiction of the legal or beneficial owner of such included entity where there is any non-compliance with the substantial economic presence requirements of this Act by the included entity.
(2) The competent authority shall upon the receipt of a form filed by a non-included entity pursuant to section I 0(2)(c), spontaneously exchange the same with the appropriate authority of a jurisdiction of the legal or beneficial owner of such non-included entity and also to the appropriate authority of the jurisdiction of its claimed tax residence.

So this is not CRS! This is something worse
 

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