Belize Free Trade Zones

Belize Free Trade Zones

Belize Free Trade Zones, a class of special economic zone, can be broadly divided into two types of free trade zones – the Export Processing Zone (EPS) and the Commercial Free Zone (CFZ). Both types of free trade zones cater to manufacturing, commercial, office and warehousing activities. Generally, business owners that set up in an EPS focuses mainly on manufacturing and exporting activities while business owners that set up in a CFZ conduct a much wider variety of trade and commercial activities.

The EPS and CFZ in Belize are governed by the Export Processing Zone Act and Free Zone Act respectively. Currently, there are 3 EPZs and 2 CFZs in Belize.

Businesses that set up within the Belize free zone are able to enjoy multiple tax benefits such as exemption from custom duties and excise duties for goods and services. Although there is no need to obtain a trading license for a Belize company operating in a Belize free trade zones, the company will be required to procure import and export licenses if it wishes to sell goods to consumers within Belize but also outside the free trade zone. Tetra Consultants recommends clients who are engaging in international commerce adopt the available foreign trade zone in Belize free trade zone.

Belize Free Trade Zones – Export Processing Zone (EPZ)

• There are 3 EPZs in Belize, namely the San Andres EPZ, the Philip Goldson International Airport EPZ and the Price Barracks EPZ.
• Besides providing facilities for activities such as manufacturing, processing, packaging, warehousing and the distribution of goods and services, a Belize EPZ also provides investors with an additional option of building their own facilities such as utility installations within the Free Zone.
• Generally, business that operate in a Belize EPZ engage in processing, manufacturing, assembly, data processing and other non-tourism services that mainly target the export market.

San Andres EPZ

• Established in 1992, the San Andres EPZ was the first EPZ formed in Belize, together with the Corozal CFZ.
• The EPZ is located in the Village of San Andres and occupies approximately 28.5 acres of land in the northern region of the country. The area is situated only 8 miles away from the Mexican border.

Philip Goldson International Airport EPZ

• Located next to the Philip Goldson International Airport, the EPZ occupies around 4 acres of land.
• The Philip Goldson International Airport is the busiest airport in Belize and is only 14.5km away from Belize’s largest city, Belize City.

Price Barracks EPZ

• Also situated near Philip Goldson International Airport and Belize City, the Price Barracks EPZ occupies approximately 14 acres of land.

Belize Free Trade Zones – Commercial Free Zone (CFZ)

• There are 2 CFZs in Belize, namely  the Corozal Free Zone and the Benque Viejo del Carmen Free Zone.
• Generally, companies incorporate in a CFZ can engage in wholesale, retail, services, trade, investment, commercial, office, warehouse, tourism, hotel and manufacturing activities as long as they are carried out within the CFZ.
• Banking, foreign exchange and other financial services can be provided to businesses in the CFZ but must be subjected to regulatory approval.

Corozal CFZ

• Situated in northern Belize on the Belize/Mexico border, the Corozal CFZ was the first commercial free zone established in Belize to encourage foreign investment and generate employment in the country.
• Main activities taking place in the Corozal CFZ include manufacturing, retail and wholesale of merchandise in the food and agribusiness sectors, light manufacturing sectors, as well as the provision of travel and tourism services and business services.
• Every year, the total value of imports and exports in the Corozal free trade zone reaches around 400 million US dollars. The Corozal CFZ is the most prominent and economically significant Free Zone in Belize.
• The Corozal free trade zone mainly import goods from the US and re-export them to Mexico.
• With a well-developed management information system, businesses in the Corozal free trade zone one are able to collect, manage and utilise data effectively, allowing them to make more informed business decisions.

Benque Viejo CFZ

• Located on the western border with Guatemala, the Benque Viejo CFZ is much smaller and less significant in terms of trade volume compared to the Corozal CFZ.

Features of a Belize Free Trade Zones Company

Export Processing Zone (EPZ)

• Generally, only companies that engage in mainly export-related businesses are allowed to set up in a Belize EPZ. However, the authority in charge of the development of the EPZ may choose to lease properties to non-exporting firms if they have received approval from the Export Processing Zone Committee (EPZC). Typically, the EPZC will grant approval to companies that can prove that their services are complementary to and enhance the business activities within the Free Zone.
• Business activities of a company operating in a Belize EPZ must be conducted within the EPZ free trade area or in foreign countries. Activities in Belize outside of the Belize free zone are limited to transportation, distribution and business meetings.
• An EPZ business is not allowed to sell, lease or transfer any good or service in Belize outside of an EPZ, or to a Belize resident or a domestic Belize company. As such, no trading license is required for a company operating in an EPZ. In the case that a business operating in the EPZ wishes to sell, lease or transfer good and services in Belize, it will have to apply for waiver of trade restrictions with the EPZC. This will allow the EPZ business to trade within Belize after it has obtained the relevant import and export license.

Commercial Free Zone (CFZ)

• Companies that conduct trade and investment activities such as a commercial office, warehouse, manufacturing, insurance services, financial services, banking services, offshore financial services and other professional, or related activities can choose to set up in the Belize CFZ.
• Sales from a CFZ company to individuals residing in Belize outside the Free Zone will be required to receive approval from the Ministry of Finance. Once approval is granted, the company’s sales to Belize residents cannot exceed 25% of its imports or goods produced within the CFZ. The sale transaction will also be subjected to the relevant import and export duties.
• All CFZ businesses must submit audited financial statements to the Free Zone Authority annually and file a monthly report of transactions that take place in its foreign currency accounts.

Advantages of a Belize Free Trade Zones Company

A Belize company operating in Belize free trade zone benefits from the following advantages:

Tax Incentives

Export Processing Zone (EPZ)

• A business operating in a Belize EPZ will be granted tax holiday of 20 years which includes exemption from income tax, withholding tax and capital gains tax. There is also an option for business owners to carry forward losses incurred during the tax holiday to deduct against future profits.
• All dividends paid by a company operating in an EPZ are exempted from tax.
• Purchase and sale of foreign currency will be exempted from foreign exchange taxes.
• Businesses that set up in an EPZ in Belize do not have to pay customs duties, sales taxes, excise taxes, trade turnover taxes, tonnage taxes, consumption taxes or other taxes for all imports and exports.
• Businesses also do not have to pay property tax, land tax or property transfer tax, unless the property is located in the EPZ.

Commercial Free Zone (CFZ)

• A business operating in a Belize CFZ will be exempted from income tax and capital gains for the first 10 years. Afterwards, the CFZ business shall pay corporate tax of up to 2%, based on the number of Belizean workers employed.
• There is also an option for business owners to carry forward losses incurred during the 10-year tax holiday to deduct against profits in the next 3 years after the tax holiday has ended.
• All dividends paid by a company operating in an EPZ are exempted from tax for the first 25 years.
• Businesses that set up in a CFZ enjoy duty exemptions on merchandize and goods entering a CFZ for commercial purpose, as well as duty and tax exemptions on fuel and production goods such as building materials, furniture, equipment, supplies and parts required for business operation.
• Generally, imports and exports of a CFZ are exempted from all customs duties, consumption taxes, excise taxes, export duties, in transit taxes or export taxes, except those entering areas subject to the national customs territory.
• There is no government charges and taxes on the use of foreign currency within a CFZ.

Lower trade barriers

• There are no import licenses or export licenses required if the good or material is imported from or exported to a foreign country.
• Quotas and import prohibitions do not apply to goods and raw materials imported from foreign countries into the Free Zone, with the exception of firearms, military equipment, illegal drugs and merchandise not approved by the authority managing the Free Zone. Such items shall not be imported into a Belize Free Zone.

High levels of confidentiality

• There is no requirement to file information about beneficial owners, shareholders and directors on a public record. The only information available to the public are the Memorandum and Articles of Association, as well as information about the company’s resident agent.
• Hence, business owners can set up a Belize company with complete anonymity.

Fast incorporation

• A Belize International Business Company (IBC) can be incorporated remotely with just one director and one shareholder who can be the same person.
• There is no requirement for a resident director or a minimum share capital requirement for a Belize IBC.

Disdvantages of a Belize Free Trade Zones Company

• Illicit trade is rampant in the Corozal CFZ due to the lack of enforcement of regulations and insufficient monitoring processes. Specifically, the purchase and sale of illegal products and counterfeits frequently take place between the Free Trade Zone of Colon in Panama, the Corozal Free Zone in Belize and the Maicao Special Customs Zone in Colombia.
• In 2019, the Free Zone Act replaced the Commercial Free Zone Act, introducing more regulations and reporting requirements for companies operating in a commercial free zone.

How to proceed with registering a company in Belize Free Trade Zones?

Contact us to find out more about how to register a company in Belize Free Trade Zone. Our team of experts will revert within the next 24 hours.

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