Offshore Banking Supports Tax Planning Business Strategies
Is your company interested in tax planning solutions that maximize income for the purposes of reinvestment into its business or increase returns to shareholders? Then Belize may offer several key components to this strategy thereby allowing your company to accomplish such objective including offering tax free international business companies and offshore free zones.
Some companies have multiple divisions, each responsible for their own profits and return on invested capital. When the divisions transact business amongst themselves, they charge a transfer price to determine the cost of such service. For example, a foreign based parent company could incorporate a subsidiary in Belize to hold intellectual property to which it pays royalties and licensing fees for the use of the intellectual property. In these cases an international business company incorporated in Belize offers the ideal solution for holding the intellectual property as their income is exempt from taxes in Belize. This income can then be incorporated to the development of the group or to increase shareholders’ return on equity. In addition to international business companies, Belize also offers various other products to assist in your tax planning strategies, such as Limited Liability Companies, Limited Duration Companies, Foundations, Limited Partnerships, International Trusts, etc.
That leads us to our second investment strategy: setting up a subsidiary or investment vehicle in a free zone. Belize offers the possibility of doing business either in Commercial Free Zones (CFZ) and/or Export Processing Zones (EPZ) in which companies can manufacture and conduct other business activities including warehousing, packaging and distribution in close proximity to the NAFTA countries. The tax benefits in these free zones are substantial including:
- 10-year tax holiday and then income tax is 2% to 8% from year 11
- Tax reduction of 2% when local residents are employed
- Imported and exported products, materials and supplies are exempt from customs duties and quotas
- Ministry of National Development approved companies are exempt from all taxes including income tax, withholding tax and capital gain tax for 20 years
In pursuing business opportunities in other jurisdictions it is important for companies to partner with an offshore bank that can support these and other business strategies. They should choose a bank that allows the company to open an account in the name of an IBC, foundation, trust or LLC. The bank should also offer cross-border and global banking services such as foreign currency accounts and CDs denominated in major currencies. In addition, it should provide access to credit and transaction banking products including current accounts as well as competitive financing for commercial construction.
So why wait? Your company may be able to take advantage of the opportunities to increase income and further its development. Call us because Belize Bank International is here to help with your banking needs.
The information contained in this document is for information purposes only and not for the purposes of providing legal advice. You must not rely on the information in this document as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.