You’ve already decided that Belize is where you want to spend your retirement years. The thing is that you don’t want to completely give up working. Running a small business that’s open for a limited number of hours per week would suit you just fine. How do you go about establishing a business in Belize? While there may be some additional requirements based on the type of business you want to operate, these essentials will get you started. Let’s delve into the 10 Easy Steps to Opening a Business in Belize in 2020.
1. Find a suitable location
Locate and secure a physical site for your business. It could be as simple as leasing office space, or it might mean securing a retail space. It all depends on the type of business you plan on operating. Pay close attention to factors such as the monthly rental cost, ease of parking and foot traffic for customers, and the limitations that may apply to redecorating the space.
2. Business name Registration
This is the first step to formalization of your Business. It is important to protect your business name as yours since this is a key means of identification in the eyes of the target market. This is a one time, one day process undertaken at the Companies & Corporate Affairs Registry in Belmopan. You can do this either under the Business Name Act or the Companies Act.
You must first check the current register to determine whether there are any existing businesses with the same or similar name. If there are, you will not be able to register your business under that name. For this reason, it’s a good idea to come up with several different potential names before consulting the registry. If you find that your intended name is already taken, go to the next one on your list of names until you find one that has not been taken. Your goal is to choose a name that’s available, easy for consumers to remember, and that people will readily associate with the goods or services that you plan on offering.
As indicated above, you can register your business under the Business Name Act or the Companies Act. If the latter is used you will need to submit your Company documents (Memorandums, and the Articles of Association) as well as proof of identity, proof of address, and the application fees. If the former is used, all you will need is proof of identity, proof of address, and the application fees. Remember that you should include your official company physical address and the business mailing address in the application.
3. Trade License Acquisition
It is important for any person exchanging a good or service for monetary value (operating a business) within an urban area (within the parameters of a town or City) to obtain a trade license to do so. This is obtained at the Town Board or City Council by submitting a copy of your Business Name or Company documents and Certificate in the case of a company, rental contract (if you are renting), proof of identity and address, completed application form and fees. Your application will be determined at one of four Quarterly meetings that are held throughout the year.
There is provision for you to pay for a Special Hearing if you missed one of the scheduled quarterly meeting and do not want to wait until the next is convened. Annual payment is determined through a site visit of the premises during which assessors determine an annual rental value of the space. Annual trade license fee is usually calculated at 25% of this annual rental value.
4. Obtain a Work Permit
Unless you are already recognized as a permanent resident, you’ll need a work permit in order to generate income within Belize. The cost of a work permit will vary depending on the type of permit you get and what permit you will need in your particular industry. Remember that work permits must be applied for annually. After you have held a permit for two consecutive years, it’s possible to apply for permanent resident status.
5. Open your Business Banking Account
You already have personal accounts like checking, savings, and lifestyle accounts. It’s important to not use those accounts for your operation. The same bank that you currently do business with can set up operating and payroll accounts with relative ease. The requirements for corporate accounts are a little different than those associated with personal accounts. Your banker will walk you through the process, look over the documentation that you have so far, and let you know if anything else is needed.
6. Income Tax Registration
After registering your business or company and obtaining your trade license, all business must register with the Income Tax Department and Government Sales Tax Department for tax purposes. Upon completion of the registration process at the Income Tax Department, a unique Tax Identification Number (TIN) will be issued. The TIN number is the same number that is to be used for General Sales Tax (GST), Customs and Excise processes.
Business Tax is a tax on total revenues or receipts whether in cash or in kind and whether received or credited without any deduction for expenses. It is payable by any person practicing his profession, or firm carrying on business in Belize, and includes:
- Consultants, both local (Resident) and Foreign (Non Resident)
- And any other ‘person’ who is in the business of providing goods and services
In accordance to the Income Tax and Business Tax Act, Chapter 55 (Revised Edition), the tax imposed on a ‘person’ or ‘firm’ is as follows:
- Persons carrying on a trade or business, which earns $75,000.00 or more per annum where such receipts are the only source of livelihood of the person;
- Persons practicing a self-employed profession or vocation, earning $20,000.00 or more per annum where such receipts are the only source of livelihood of the person:
- Persons engaged in the business of investment or earnings form real or personal property:
- Persons engaged in the provision of personal services; including Tour Operators, Travel Agents and other Commission Agents
7. GST Registration
General Sales Tax is a tax on consumer spending collected at the point of importation and on business transactions when goods changed hands or services are performed. Taxable supplies are taxed at either the standard rate of 12.5% or 0% (Zero-Rated).
All persons who are engaged in a taxable activity with an annual turnover exceeding BZ$75,000.00 must register with the Department of Government Sales Tax in accordance with the Government Sales Tax Act No. 49 of 2005. It is not the business activity which is registered but the person conducting those activities. This person could be a company, partnership, sole proprietorship, trustee or estate. Person must register within one (1) month of the day on which the person first becomes eligible.
Only registered persons can charge GST on their supplies as output tax and claim credit on their purchases of supplies as input tax. (Section 23, GST Act 2005).If you anticipate grossing more than $6,000 per month or $75,000 per year, you are required to register with the department of GST. The personnel at the Department of General Sales Tax will use your TIN to set up your GST account so that you can collect and pay GST and to ensure your GST is properly recorded and credited to your operation.
The documents that you’ve already acquired (Business Name or Company Certificate, TIN, Trade Licence, proof of identity and proof of address) will also come in handy for this process. Expect to be asked about your projections for business volume. As of 2019, it helps if you anticipate generating a minimum of BZ $75,000 during your first year of operation.
8. Social Security Registration
Social Security Act Chapter 44 of Laws of Belize, 1988 revised in 2000-2003 requires that persons who employ one or more persons must register for social security with the Belize Social Security Board. The application must be made with seven (7) days of employing the first employee.
Social Security contribution are made weekly but submitted to the Department with a monthly statement of contributions. The contribution is related to the weekly insurable earnings. A portion of the contribution is paid by the employer and other portion is discounted of the employee salary.
9. Registration /Protection of Intellectual Property
The basis of a business’s identification and an important element of branding, your business’s intellectual property add value to the business and must be protected. Intellectual Property is defined as intangible creations of the mind such as inventions, artistic work, designs, images, symbols, names, etc. that is used in commerce. This registration for protection is done by visiting the Belize Intellectual Property Office located in the City of Belmopan. The four areas protected under BELIPO are Trademarks, Patent, Industrial Design, and Copyright.
10. Anticipate a slower pace of doing business in Belize
Remember that the pace of doing business in Belize is typically more relaxed and casual. This is to your advantage, since it does provide more time to get to know the business climate and begin to enjoy it. You’ll find that most of the people you talk with along the way are happy to help and look forward to welcoming you as part of their community.
Conclusion
I do hope you enjoyed reading: 10 Easy Steps to Opening a Business in Belize in 2020. Belize is such an amazing country, I know you’ll love working and living here. From all of us at Shepherd Belize Real Estate, welcome to your new home and place of business.
