Although most people move to Belize in order to enjoy the good life in a stupendously beautiful Caribbean setting, it must be said that there are also some very attractive tax benefits when you relocate to Belize.
The government of Belize has a strong commitment to banking privacy, leading many people to call it a tax haven. Although this term sometimes has strong negative connotations, Belize allows foreigners to set up offshore corporations (called IBCs) that can protect and manage your assets.
Setting up an offshore corporation and bank accounts is 100% legal and above board, but be aware that residents of the United States are still required to report their assets to the IRS.
That being said, many Americans set up companies in Belize in order to legally avoid paying taxes in America. As long as the Belize corporation is not doing any business in America, the IRS cannot claim any taxes on the company’s earnings. You’ll still have to file an IRS form 5471 in order to report your ownership of the company.
Americans who live in Belize can apply for the Foreign Income Tax Exclusion that shields the individual from taxes on up to $100,000 of income, including that generated by an offshore Belize corporation. In order to qualify for the exclusion, you must both be a resident in Belize as well as absent from the United States for 355 days in a 365-day period.
For precise details about taxes, be sure to consult a qualified expert.
Taxes in Belize
Taxes in Belize are incredibly low. There are no capital gains taxes, and property taxes are assessed at just 1-1.5% of the unimproved value of the land.
Income tax is charged at a flat rate of 25% for both individuals and companies, although the first $10,000 is exempt. Better yet, all pension (retirement) income is completely exempt from taxation. And dividends from a Belize International Business Corporation (IBC) (an offshore corporation) are also exempt from taxation.
The Qualified Retirement Program (QRP) program allows qualifying individuals age 45 and older along with their family to gain permanent residency in Belize. The QRP program also exempts members from any taxes on income derived from outside of Belize. And the QRP program allows you to import all of your personal goods, including cars, boats, and light aircraft, duty-free.
To learn more about tax benefits by moving to Belize, please contact Cerros Sands.
Cerros Sands is a gated, master-planned self-sustaining green community in the country that is the perfect place to live, retire, and invest in Belize.