Belize Commercial Free Zone

The technical informal zone pic Sign to entrance to CFZ pic be lay go forth of CFZ pic Plazas, Comp each Stores &038 Shoppers inside The regulate. CRS104-2 Group 7/ D Research Question rank an industry or scotch atomic number 18na with in your country where taxationation and certificate as been removed and look at the condition of it with in your country in terms of 1. has it worsen or repair 2. variety of choice ( no precondition of products made) 3. price of goods ( no indication of the prices of goods) 4. boilersuit employment 5. part (no indication of the quality of goods) 6. g overnment revenue enhancement 7. ocal industry A Brief over View of the mercantile complete Zone or CFZ The moneymaking(prenominal) Free Zone is one of Belizes mevery Offshore Companies or industries apply to attract unconnected investors from tout ensemble over the world to increase Belizes delivery and northern economy. Belizes legislation defines CFZ as a geographic atomic nu mber 18a in Belize designated impertinent national springer territory and punctually restricted by controlled access, wherein the benefits created shall apply to a complex of industries. The CFZ boarders Mexicos South east border and allows investors to presently access Mexicos high end consumer market.Corozals commercial Free Zone is under the attention of the Commercial Free Zone caution Agency (CFZMA) and is headed by the Chief decision maker Officer under a batting order of Directors within the Zone. The Commercial Free Zone (CFZ) was established under the Corozal Commercial Free Zone Act of 1994 and was in typeset by 1997. The FZA is the most modern laws political science Free Zones in Belize. Business entrepreneurs ar offered insane tax free production line opportunities. Businesses in that respect ar free of irrelevant metamorphose restrictions and benefits such as job stillions and tax spends.Goods merchandise or exported are acquit from any duties, qu otas, stamp duties and revenue commutation duties. Income tax on Commercial Free Zone vocationes is usually aerated between 2% and 8%. line of course communitys rates can be reduced up to 2% by means of tax credits by employing Belizean workers. The Zone provides a variety of facilities for activities such as manufacturing, treating, warehousing, packaging and distribution of goods and services. This allows the byplaymen straightaway to manufacture, import, export, distribute fuel, and to offer sell or wholecut-rate sales to Mexico and many some other international clients.By doing so, they are also offered access to dock ships at ports in Belize and direct export by sea, air, land and entry into national customs territory. Today the Zone under bygone vast improvement since accordingly and continues to do. What started out first as a individual(a) sector with a great bark to attract investors began to pay off collectible to the involvement of the few businessmens det ermination and dedication. First there were a few companies that only imported and exported their merchandise, wherefore one or two retail stores, and then there was the addition of a SHELL gasoline station.This then offered the Mexicans an efficient and better quality fuel than Mexicos state-run fuel company PEMEX offered. Mexicans then began to invest in the Zone and brought with them numerous stores which offered investors and consumers everything from a more active store berth to batteries. Benefits that Foreign Investors Receive from CFZ The following is an elongate list of benefits that Investors receive 1. no restrictions on exotic ex veer out of or within a CFZ, including the sale of foreign funds or the transfer of foreign exchange 2. no establishment charges and taxes on foreign coin use within a CFZ 3. all merchandise, articles and goods that enter a CFZ for commercial purposes are exempt from import duties, revenue re institutionalizement and stamp duties 4. all f uel and goods, including buildings materials, equipment, furniture, supplies, and so on , needed for the functioning of a CFZ business are exempt from all duties and taxes 5. A Social fee of 1. 5% is charged on all goods and services imported into the CFZ, except for fuel (on fuel it makes 10%) 6. no quotas for imports and exports 7. t is possible to centripetal an written report in any currency with a duly registered bank of CFZ business choice located in the CFZ 8. no import or export permission is required for imports or exports 9. imports and exports are exempt from all custom duties, consumption and mint taxes, and export duties 10. During the first 5-year period of business functioning in a CFZ, it is exempt from income tax, or capital gains tax, or any new corporate tax levied by the political relation of Belize any dividends paid by this business are exempt from tax for the first 20-year period of its operation 11.The evil incurred over the 5years tax holiday by a CF Z business may be carried forward and deducted against profits in the 3 years after the tax holiday period 12. Any proceeds from the sale of stock or other will power interest in a CFZ business are exempt from the above-mentioned tax. Employment, Government Revenue, CFZ Current put in of Being and effects on the Belizean Economy Employment The briny industry in Northern Belize that provides over six thousand families with income is the sugar industry.The other main industry which does so is CFZ. By 2003 there were over 400 businesses. immediately there are about 700 which are offering employment to over 3000 Belizeans. Government Revenue 1. In 2004, CFZ brought in $274 one million million in economic occupation per annum of which the Government charged income tax as the five year mark had passed in 2002. 2. CFZ Christmas sales were approximately 50 percentage lower than 2004 in 2008 CFZ Current State of Being Investors are losing confidence in the Belizean economy as 1. The re is slight economic activity in the zone.This has left(p) investors who live built million clam shopping plazas unable to meet pecuniary commitment. As a chair, half of the facilities switch now become vacant. 2. The Chetumal Chamber of medico consistently pressures the Mexican Federal political relation to hinder Mexicans from purchasing at CFZ. 3. forrader the Belize Bank and Atlantic Bank have been depositing pesos from the Free Zone in banks in Chetumal. Now Mexican banks are refusing to choose pesos deposited at CFZ out-of-pocket to money wash concerns. Investors are then forced to hold back large sums of pesos which posses the risk of theft.As a result the risk of excess pesos forcing the Market is rarified causing investors to sell excess pesos to topical anesthetic currency dealers at a sledding due to Mexicos unstable exchange rate. 4. The Central Bank has lost its account with HSBC (an international bank which used to process the millions of US dollars in cash) this is due to US anti-money-laundering banking regulations. There are periods when commercial banks in CFZ have not been freely fetching the US dollars for the past three weeks. As a result, there have been some(prenominal) U. S. dollar freezes at CFZ in 2002, 2009, 2010.This is a very serious matter as it posses a possible treat to place CFZ activities on halt permanently if no resolution is provided. Hence anywhere up to over 17 million US dollars would be left to sits in a vault in Belize unprocessed. Effects on the Belizean Economy Consequences 1. In 2008, Imports also savage by 38. 9 percent to a new low of $114. 5 million due to losses in the globose economy . When economic activity trim to 50% in the Christmas of 2008 it caused the Belizean economy to decline. This is due to the fact that the industry is earning less(prenominal) less income is being gained by the government through and through income tax.As a result Commercial activity continues to decline. 2. CF Z income is dependent on foreign currency, specially so US currency. Any change in the U. S economy directly affects us. Also since investors are all foreign, and not local, they can leave at any point in time, and will provided that there is persistent decline in economic activity or U. S dollar sign Freezes or whenever financial responsibilities cannot be meet. 3. As a result of businesses closing their shutters permanently thousands of Belizeans are left unemployed. 4. Belizean economy then continues to decline.