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Doing Business in Belize
If you haven't been there yet, click here
to see WHY you should consider doing Business in Belize.
You also might want to read some caveats about simply being
here in Belize. Click here for that.
Compared to the US, doing business in Belize is relatively
easy, as long as you steer clear of some areas, and study the landscape pretty
carefully before you plunge in. I have started a couple of successful
businesses in Belize, and I've thought about a number of others that we seem to
need here in BelizeNorth, and I'll share my thoughts. Please remember that
this isn't advice -- these are just my considered thoughts. If you want my
advice, you'll have to pay for it! (But I'm pretty reasonable...lunch will
get you a lot.<grin>)
Areas for GOB Scrutiny
The Government of Belize (GOB) has a pretty good handle on
money-making businesses -- as a source of tax revenue, of course -- and so you
should steer clear of these if you want to avoid a lot of hassle. Here are
some of the more obvious areas.
Health Care. Everyone knows that Doctors make a
lot of money, and the government regulates it pretty well. You can imagine
that, if you were a foreigner and you went into a town in the US and started
setting up a clinic, you would run into lots of government regulations.
(To protect the people of course.) The same thing happens in Belize, even if it
may turn out to be somewhat self-serving. A number of health care
professionals have tried to set up clinics here, and they have had numerous
difficulties. In some cases, they eventually gave up in disgust. In
some cases they have persevered and succeeded. The point is, just because
Belize looks like a sleepy little third world country, don't think that the GOB
doesn't understand where the money comes from and where it goes. Bottom
line: Stay out of health care, unless you're well certified, and willing
to jump a lot of hoops.
Tourism. Tourism is bread and butter to the GOB
-- it accounts for the majority of the revenue in the country, they have a
separate Ministry to oversee it, and they have lots of taxes; hotel taxes,
restaurant taxes, etc. and you have to pay all of these on time or they charge
you exorbitant penalty charges for being late. A Bed & Breakfast
sounds like an easy little business to start up, and it should be, but you will
find a veritable gauntlet of hoops that you have to jump thru to get
going. If you want an easy time with the biz you start, try to ensure that the GOB will not
decide that you are running a tourist business.
Education. The GOB doesn't do much educating --
most of the schools are run by the churches -- but everyone is concerned about
their kids, and so they have a lot of regulation surrounding the schools.
And a separate Ministry. And so, if you start any kind of a school, for
students from here or from abroad, you will run into a host of regulators who
know a lot about schools. They may not know much about YOUR school
(everyone thinks their school is special, and it probably is) but they know
enough about schools in general to require all the right certifications, and
plans, and licenses, and <surprise> money. .
Transportation. Yep, another Ministry! The
busses are a virtual monopoly, and they have a special tax on taxis that hold
more than six passengers -- because they look like a bus!!! The US DEA has
persuaded the GOB to shut down all of the little airstrips -- handy for flying
Cocaine in and out in the middle of the night -- and some of them, finally, ten
years later, are just getting going again. Belize is a great country for
flying -- with well over 250 days a year of clear flying weather -- so there's a
lot of pressure to open new strips, but it is taking a while. (I'll cover
flying in another special, soon.) At any rate, you will find a lot of
regulation in this area. And don't even think about running a railroad!!
If you're already here in Belize, or have given up and gone
back, and you have a horror story, I hope you'll share it with me. Right
now, I'm going to talk about areas where it is relatively easy to start a
business here.
Opportunities
Service Businesses Making things or fixing
things are trades, and are generally not regulated very much. If you are
doing something electrical, you have to get a certified electrician to inspect
it and approve it before you can get BEL to hook up to it. If you supply
a service, and it's something that nobody else is doing, chances are you will
get the blessing of The Powers That Be. (TPTB.) In my case, that is the
town board. They have smiled upon my little fixit shop because everybody
has stuff that needs fixing. Renting equipment or tools is a sideline for
a number of Belizeans, and I have thought about a real rental shop like we have
in the States. There are a lot of difficulties, but the most serious one
is the lack of credit cards. Laundromats are few and far between in
Belize, and there is a need for them. But there are difficulties -- I will
discuss those with you if you like, because I've thought a lot about that
business. Computer repair is attempted by Belizeans, but there is a lot of
room for improvement. There is a need for a burglar alarm business with
associated patrol/response unit. A well-run property management firm, employing
Belizeans for fix-up, would do quite well.
Property Management New
There are a lot of absentee owners in Belize. Also, there are a number of
Belizeans who own property which needs work in order to be rentable or
saleable. (Just as in most American cities, eh?) A good property
management firm can a) fix up properties b) make sure they stay fixed up
c) keep them rented d) ensure that sales agents are on the ball, if the property
is for sale. There are very few PMs in Belize. One, run by my friend
Yvonnerae Garder, is a good model, and is described here.
(It is in Belize City.) There certainly is room for one or more in
BelizeNorth! If you're interested, write
me, and we can chat some more about details. .
Selling Real Estate There is no formal licencing
to be a real estate broker in Belize, and a lot of Gringos do it. They
charge a 10% commission, and seem to get it because they get can qualified
customers off of the internet. Personally, I think that's an exorbitant
commission -- RE companies in the states are cutting back from the standard 6-7
per cent in the face of competition. I would think that someone who
advertised a low commission rate in Belize would pick up a lot of sellers, since
we're talking about significant amounts of money. At any rate, it's a
pretty low overhead business, if you don't mind dealing with a lot of "looky-loo"
tourists who just want to see the countryside from your vehicle! Here
is a page of links to existing RE agents in BelizeNorth.
Selling "stuff." Wines, books, crafts,
hard-to-get supplies, all of these things sell pretty well, if you can make the
price reasonable. Most everything you buy new from the states will have
transportation costs and (perhaps) duty added to it, which can sometimes
quadruple the cost you pay in Belize. If you can figure a way around that
cost, by using local supplies, or "mules" or whatever, you have a
business. ("Mule" is the term drug dealers use for the people
they get to carry drugs for them -- the term can apply to someone who brings a
TV for you from the states.) A friend of mine is buying Chinese diesel generators at
rock bottom prices in China, and shipping them here in a container which
comes from the Orient every week. There is a truck that comes from Chicago
every week or two. It usually has some room left in it.
Professional Services. If you are qualified and
certified in a profession, you can take advantage of that in Belize. The
government will expect to see your certifications, but they may be pretty
lenient if you are adding to our little country's skill set rather than competing with
existing Belizean professionals. Contracting, Management Consulting, Title
Insurance, Accounting, Software Engineering; all are areas where Belize is short of
talent.
Requirements
Business Licenses The simplest sort of
trade -- like my Fix-it Shop -- requires a trade
license. In Corozal, this is issued by the town board. It is based
roughly on one-quarter of the annual rent for the space that you are
using. In my case, the shop will occupy about one-sixth of the available
space in my house, so I can take my monthly household rent, divide it by six,
multiply that by three (one quarter) and have the approximate cost of my trade
license. Other businesses may require more expensive licenses. You
normally pay the licence at the end of January.
Taxes. Currently, trade businesses are exempt
from taxes until they exceed $4,500 per month or $54,000 per year.
Professions have a $20,000 per year exemption. Under new tax rules
proposed by the GOB, the trade exemption would be increased to $75,000 per
year. Currently, if your business does not exceed the exemption level, you
do not have to pay sales tax on things you sell. (Sales tax is 10%, going
to 12%, payable monthly, with severe late penalties.) When you pass the
exemption level, your trade business pays 1.25% of the gross and your profession
pays 4% of the gross. There are certain allowable deductions from the
gross including one for charitable contributions, and other taxes paid.
But there are no complicated deductions such as you have in the US. The
form is relatively simple to fill out, and even easier if you have it in your
computer. You have to file every month; there is a penalty if you do not,
but they have not been assessing the penalty. Of course I filed!
You also affix a stamp (which you purchase at the office) to
every receipt, to make it legal. This is a transaction tax.
There are a number of more complex taxes on real estate
sales, commissions, and income from rental properties, but nothing compares with
taxes in the US.
I have the monthly tax form in my computer, as a MS WordŽ
document, and I can send it to you if you write
me. When you are here in Belize, you should go to a business tax
office and get a copy of "The Belize Business and Income Tax
Guide". It is a GOB publication and is free. Get a copy of the
"Business Tax Monthly Form" and it will describe all the special
taxes. On one sheet!
New. (January
2007) I have updated the tax form, and it has increased rates for many
categories. I will not elaborate them here. Write
me and I will send you the updated tax form.
I hope I haven't left anything out. If I have, please tell
me.
Newer. Belize's
Big Five. An interesting article in the Belize Times about
doing business in Belize.
Afterthoughts: (Nov 2007) I have just perused Chapter
250 of the Laws of Belize. (It is a PDF file) It was obviously written
by lawyers so that you would need a lawyer to understand it. It is not
necessary to form a partnership or corporation to do business in Belize, but if
you do, I strongly suggest that you get a lawyer to help you set it up.
They will charge you -- $500 to start, and going up from there. (No, I
can't recommend a lawyer.)
Newer. Comparative
Figures from the World Bank compare Belize with other Central American
countries. Very interesting!
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