Corporate Tax Residency

Incorporation provides a company with legal personality. The country of registration of the company determines its corporate tax residency. This is the place corporate income tax applies. Since Belize offshore companies and International Business Corporations mainly operate outside the jurisdiction, foreign jurisdictions may impose Value Added Tax and other levies for activities in their respective countries.

Corporate tax residency must not be confused with personal tax residency. Although both fiscal measures are independent, there is an important connection that must not be forgotten. Although the corporate income of the Belize offshore company or International Business Corporation is taxable in Belize, accumulated corporate value, capital gains and other type of corporate income may be taxed in a home country as substantial interest and thus personal income tax for the ultimate beneficial owner. As such, owning a Belize offshore company or International Business Corporation requires tailored advice and strategic planning.

Contrary to the requirement of physical presence for personal tax residency, corporate tax residency is established by the place of incorporation, the residence of the corporation, and the place where management and control takes place. The choice for corporate tax residency initially follows the incorporation of the company. Belize offshore companies and International Business Corporations are subject to the local tax rules in Belize. The legal framework for company formation and corporate taxation for qualifying Belize offshore companies and International Business Corporations is both inviting and feasible. As such, incorporation in Belize and the consequential domestic corporate tax residency provides for efficient entrepreneurship.

There are exceptions to general rule of incorporation as a foundation for corporate tax residence. These exceptions are defined by the Base Erosion and Profit Shifting (BEPS) project and relate to the instant acceptance of the country of incorporation as the location of corporate tax residency. The tax treaty and mutual agreement between the countries is applicable alongside the place of effective management. This strengthens the need for local activities in the country of incorporation complemented by nominee services.

Belize Corporate Tax Residency

Entrepreneurs and other location independent professionals willing to incorporate in Belize seek an efficient and effective place to operate and administer their international company. The appropriate corporate structure and internal organization can provide corporate tax residency in Belize for the company.

To accommodate international businesses and help them to benefit from the international allure of a Belize offshore company or International Business Corporation, we offer full tailored substance and presence packages. These packages strengthen the local position of Belize companies and aim to comply with international regulations and the BEPS project.

For more information on Belize offshore company formation, corporate tax residency and to enhance local substance and presence to continue and maintain business activities from Belize, please complete the contact form below.

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