V. Investment Incentives Schemes

The importance of private investment both by local and foreigner investors has been recognized as an effective instrument for promotion of economic development, particularly the export-oriented ventures. A healthy investment climate is being maintained to attract investors. Several incentive schemes have been instituted to encourage and promote investment. The investment schemes are contained in the following legislation:

1) Fiscal Incentive Act, No. 6 of 1990;

2) International Business and Public In-vestment Companies (IBC) Act 1990;

3) Mines and Minerals Act 1988;

4) Export Processing Zone (EPZ) Act 1990;

5) Commercial Free Zone(CFZ) Act 1994.

1) FISCAL INCENTIVES ACT 1990

The Fiscal Incentives Act (No. 6) of 1990 is one of many schemes the government has initiated in order to attract investments into the country. The Act contains fiscal incentives and the rules and regulations governing the investment.

FISCAL INCENTIVES

The Fiscal Incentives for investment are: Tax Holidays and Duty Exemptions.

TAX HOLIDAYS

The Fiscal Incentives Act 1990 contains full details of the benefits and conditions of the tax holiday period. It clearly states that the tax holiday period shall normally be for 5 years duration from the date production. However, there is a provision that the Minister, Economic Development, on application made by the company, in a fit and proper case, can review the company's operations and renew the tax-holiday period for a further term not exceeding 10 years. In addition, there is an exception to "normally" in the same Section 6(i) (b) which states that in the case of a company which is engaged in agriculture, agro- industrial products, mariculture, etc., and the operation is strictly for export and highly labor intensive, the tax holiday may be for a maximum period of 25 years. Incentives under this clause also allow exemption from income tax under the Income Tax Act, including the repatriation of profits and dividends.

DUTY EXEMPTIONS

In addition to tax holidays, the Act allows duty exemptions to every company which has been granted a Approved Enterprise Order (Development Concession) to import into Belize, free of import duty, an revenue replacement duty, such items as:

(i) all building materials, plants, machinery, equipment including specialized tools, utility and transport vehicles, fixtures and fittings, office equipment and appliances;

(ii) spare parts for the plant and plant related machinery and agricultural machinery; and (iii) any raw materials or other items for the sole use of the approved enterprise.

Duty exemption privileges begin on the date of signing of the Approved Enterprise Order. The Act specifies that the duty exemption period shall not be more than 15 years duration commencing from the date a the Approved Order. and the same can be reviewed by the Minister for a further period not exceeding 10 years. Although the length of the development concessions is determined at the Cabinet level, several factors are considered when analyzing and reviewing a proposal before presentation to the Cabinet.

These factors are:

(a) local value addition,
(b) profitability on investment,
(c) foreign exchange earnings or foreign exchange savings,
(d) creation of employment,
(e) transfer of new technology,
(f) location of industry,
(g) destination of the final products-export/domestic market,
(h) level of investment.

PROCEDURE FOR APPLICATION

The company applying for development concessions should be incorporated under the laws of Belize (Chapter 206). The project proposal in the prescribed application form should be submitted in triplicate along with such document as:

a) copy of Articles of Association;
b) copy of Memorandum of Association;
c) copy of Certificate of Incorporation;
d) banker's reference on the bank's official letter-head;
e) land tenure deed;
g) proforma profitability statement up to the second year of full production;
h) list of items requested for duty exemptions;
i) details of local inputs.

Payment of application fee which ranges between BZ$5,000.00 and BZ$7,000.00 depending on the total investments is payable with this application. Application fees range as follows:

This fee is non-refundable. For further information, contact:
Permanent Secretary
Ministry Of Economic Development
Belmopan, BELIZE C.A.
TEL. NO.: (501)-8-22526
FAX NO.: (501)-8-23111

2. INTERNATIONAL BUSINESS COMPANIES AND PUBLIC INVESTMENT COMPANIES (IBC) ACT 1990

As an additional effort to attract investment, the Government of Belize has also enacted laws to allow for the incorporation and operation of International Business Companies and Public Investment Companies under the IBC Act of 1990. One major benefit for the IBC's is complete exemption from certain provisions of the Income Tax as follows:

a) all income of an IBC;
b) all dividends paid by an IBC to persons resident in Belize or elsewhere;
c) all interests, rent, royalties, compensations and other amounts paid by an IBC to persons who are not residents in Belize;
d) capital gains realized on any shares, debt obligations or other securities of an IBC by per sons who are not resident in Belize.

In some cases, IBC's may be exempt from the payment of stamp duty, as mentioned below:

a) all instruments relating to transfer of any property to or by an IBC; b) all instruments relating to transactions in respect of the shares, debt obligations or other securities of an IBC; c) all instruments relating in any way to the assets or activities of an IBC.

For further information, contact:

International Business Company Registry
Belize Holdings Inc.
#60 Market Square
P.O. Box 364
Belize City
Tel . No.: (501)-2-72390
Fax No.: (501)-2-75474/77018

3. THE MINES AND MINERALS ACT 1988

The Mines and Minerals Act 1988 covers all mining operations in Belize. The proposed Fiscal Incentive Package for mining allows investors quick recuperation of their investment. This package covers the corporate tax, a 3 percent (Ex quarry/Ex mine) ad valorem on all industrial and constructive minerals and 5 percent ad valorem on all precious and semi-precious metals. It also provides for losses to be carried forward for seven years, after which only that amount which reduces the profit in that year to one half of its value can be allowed. The Act also provides for exemption from payment of customs duty for mining equipment and supplies. The company operating under this Act is subject to a 15 percent withholding tax which if reinvested can be waived. Finally, no tax holidays are granted as mining involves the exploitation of non-renewable assets.

For further information, contact:

Geology and Petroleum Office
Ministry of Science and Technology
34-36 Unity Boulevard, Belmopan, Belize C.A.
Tel. No: (501)-8-22178
Fax. No:(501)-8-23538

4. EXPORT PROCESSING ZONE (EPZs) PROGRAMME

The Export Processing Zone (EPZ) Programme is also intended to attract investment both local and foreign to boost exports of non-traditional manufactured goods. Besides promoting new exports, the programme is designed to facilitate technology transfer, high quality production, improvement of managerial technical skills as also generation of employment opportunities in the country.

The EPZ programme has been considered advantageous to investors as Belize has a preferential market access to the CARICOM under the treaty of Chaguaramas, the European Union under the Lome Convention, Canada under the CARIBCAN and the USA under the Caribbean Basin Initiative (CBI) and the Generalized System of Preferences (GSP).

The rules and regulations governing the EPZ Programme are contained in the EPZ Act 1990 and Export Processing Zone Regulations 1992.

Various incentives to investors under the EPZ Act include:

(a) full import and export duty exemptions. Import duty exemptions extend to capital equipment, intermediate goods, spare parts and service vehicles utilized inside the EPZ;
(b) exemptions from capital gains~, property and land tax, excise, sales and consumption tax, trade turnovers, foreign exchange and transfer tax;
c) a guaranteed income tax holiday of 20 years with an option to extend and deduct losses from profits following the tax holiday period;
d) divided tax exemption in perpetuity;
e) opportunity to open foreign currency bank accounts in Belize and abroad;
f) opportunity to sell, lease or transfer items, goods and services within an EPZ;
g) customs inspection at the Zone for expediency;
h) work permits at no cost for all professionals and technical staff;
i) exemption from the Supplies Control Act and its regulations;
i) no raw material import restrictions;
j) no foreign exchange restrictions;
k) no import or export - licensing requirement;
l) no trade licensing for business to operate;
m) no licensing requirement for domestic suppliers who sell to EPZ business.

For further information, contact:

Director, Export Processing Zone
Ministry of Trade and Industry
Belmopan, Belize C. A.
Tel. No: (501)-8-22199/22153
Fax. No. (501)-8-22923

5. COMMERCIAL FREE ZONE (CFZ) ACT 1994

The Commercial Free Zone Act 1994 has established a Commercial Free Zone at Corozal to attract foreign investment. The Zone provides facilities for various activities including manufacturing. processing. pack aging, warehousing and distribution of goods and services.

Merchandise warehoused in the CFZ may be wholesaled or retailed for:

a) sales to diplomats of other countries who un der customary and conventional international law are exempt from payment of duties;
b) sales to ships that dock at ports in Belize and are destined for other foreign ports;
c) sales for direct export whether by sea, air or land, provided that such merchandise arrive at the port of exit under customs control;
(d) entry into national customs territory, provided the goods are sold wholesale, and the import license if so required, is secured and the customs duties paid e) entry into national customs territory, provided that the goods are sold retail in operations which have licenses to sell duty- free to residents and non-residents who are leaving the country and have submitted proof of departure. Such duty - free retailed goods shall be delivered to the buyers at a port of exit or embarkation.
f) Merchandise may be sold inside a CPZ from one business to another, provided that a proper record is kept of such transactions.
g) No restrictions on foreign exchange including the sale of foreign currency or the transfer of foreign exchange into, out of or within a CFZ by CFZ businesses.
h) No Government charges and taxes on the use of foreign currency within a CFZ.
i) CFZ businesses are allowed to open an account in any currency with a duly registered bank of its choice which is located in the CFZ.
j) The rent restrictions Act shall not apply to a CFZ business or rental of property within a CFZ.

Several benefits and incentives including duty exemptions and tax holidays are available to the investors in the Zone as mentioned below

DUTY EXEMPTIONS

a) All merchandise, article, or goods entering a CFZ for commercial purposes shall be exempt from import duties, stamps duties and revenue replacement duties.
b) All fuel and goods including buildings materials, furniture, equipment, supplies and parts required for the proper functioning of a CFZ business shall likewise be exempt from all duties and taxes.
c) No quotas upon any article, item, or goods shall apply to imports or exports of a CFZ business.
d) Imports or exports of a CFZ business shall not require an import or export license.
e) Except as provided for in (f), all imports and exports of a CFZ to or from whatever destination shall be exempt from all customs duties, consumption taxes, excise taxes, and export duties.
f) All exports from a CFZ to the national customs territory shall be subject to duties under the national customs regime, provided that such duties shall be paid based on the original value of the imported parts or products before assembling, remixing, relabelling, processing, manufacturing or any other similar activity.

TAX EXEMPTIONS

Notwithstanding anything contained in the Income Tax Act, there shall be levied on the chargeable income of every developer and CFZ business within a CFZ, an income tax at the following rates:

a) Up to BZ$15,000.00 of total chargeable income......................................................2%.
b) Over BZ$15,000.00 and up to BZ$30,000. of total chargeable income...................4%.
c) Over BZ$30,000.00 and up to $100,000. of total chargeable income.......................6%.
d) Over BZ$ l 00,000.00 of total chargeable income....................................................8%.

In the computation of income tax under this section, there shall be given tax credits in accordance with the number of Belizean workers employed on a continuing basis by every CFZ developer or business in accordance with the following scale:

a) from 10 to 30 Belizean workers employed......................................1% of taxable income;
b) over 30 and up to 50 Belizean workers employed...........................1.5% of taxable income;
c) over 50 Belizean workers employed.................................................2% of taxable income;
d) During the first five years of its operation, a CFZ business shall be exempt from income tax or capital gains tax or any new corporate tax levied by the Government of Belize after the commencement of this Act, and any dividends paid by a CFZ business shall exempt from such tax for the first twenty years of its operation.
e) Where a CFZ business incurs a total net loss over the five years tax holiday, that loss may be carried forward and deducted against profits in the three years following the tax holiday period.
f) Any proceeds from the sale of stock or other partial or complete ownership interest in a CFZ business shall be exempt from tax levied under this section.
g) A CFZ fee equal to the sum of five per centum of the tax collected by the Commissioner of Income Tax in any year of assess ment shall be placed to the credit of the CFZMA.

For further information, contact:

Corozal Free Zone Management Agency
Santa Elena, Corozal, Belize
Tel. No: (501)-4-23643
Fax. No:(501)-4-22341

Belize Investment Guide page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
22 23 24 25 26 28 29
Commons Island Community History Visitor Center Goods & Services Search Messages AIM Info

Copyright by Casado Internet Group, Belize