The Economic Substance Act came into force on 11 October 2019. The purpose of the Economic Substance Act is to ensure that Belize does not facilitate the use of corporate structures which attract profits, but which do not reflect real economic activity that is being undertaken in Belize.
Kindly be advised that as it relates to the Economic Substance Act, the International Financial Services Commission is in the process of preparing guidance notes which will –
(i) assist entities to determine if they are in scope of the economic substance requirements and, if so, to assist them in understanding how to satisfy those requirements; and
(ii) provide guidance as to how the Commission will measure and assess the criteria for meeting the economic substance requirements.
The Guidance notes will therefore provide an in-depth scope of the new legislation for compliance by the respective agents and licensees. Therefore, the Commission will be keeping the relevant parties up to date with new developments through channels such as the Commission’s website and via electronic mail.
The Commission kindly asks that you await the launching and publication of the Guidance notes. In the interim, entities are encouraged to seek professional advice if they are uncertain as to whether or to what extent they are subject to comply with the economic substance requirements. The Economic Substance Act has been uploaded here on the Commission’s website for your preliminary review.
The flowchart is issued by the IFSC and is intended to provide a high-level illustration of the logical sequence and reference point in dealing with the requirements of the Economic Substance Act, 2019 in respect of its application to IBCs and regulated entities under the law of Belize.
Therefore, the flow chart summarizes the Economic Substance Act for the licensees and provides a simplified means of understanding what requirements must be met for licensees to have substantial economic presence in Belize. Hence the chart displays that in order for the regulated entity to meet its substance requirements it must look at its activities and determine whether it is a relevant activity. Once the entity is able to capture the above mentioned and show that there are adequate employees, expenditure and appropriate measures in Belize, it is on its way to being compliant with the Act.