Belize: new rules on intellectual property reporting for IBC companies
On 19 December 2019 the information about the duty of all International Business Companies (IBC) in Belize to fill and submit the forms about intellectual property assets (in case of acquiring, holding or dealing with them) or absence of such to the International Financial Services Commission (IFSC) has been published on the official website of the IFSC.
The abovementioned requirement has been established in Belize in light of existing legislative prohibition to acquire, hold, own and deal with intellectual property (IP) assets provided for IBC companies. Such prohibition has been established by Statutory Instrument №11 of 2019 and is effective since 1 January 2019.
The IP assets in terms of Belizean legislation are deemed to be intangible assets including copyrights, patents, trademarks, brands, know-how and other similar assets from which the income accrues to the business.
It is necessary to mention that prohibition to own IP assets applies to all IBC companies which has been incorporated and started holding IP assets after 17 October 2017. IBC companies incorporated and holding IP assets on or before 16 October 2017 are entitled to extend their holding of IP assets during transition period.
The transition period during which certain IBC companies are permitted to hold and use IP assets acquired on or before 16 October 2017 will last until 30 June 2021. The expiration of transition period will mean that in order to avoid violation of current IP prohibition regime IBC companies will have to:
- Dispose of IP assets;
- Redomicile to foreign jurisdiction;
- Change the form from IBC to other Belizean company which is not prohibited to own IP assets.
The non-compliance with IP prohibition regime will cause any offending person (the legislative wording seem to imply registered agents, IBC company itself and its officers as such offending persons) to be liable to a penalty in the amount of 25 000 US dollars for first offence and 100 000 US dollars for subsequent offences. In some cases striking off the Register may be applicable additionally. The liability is imposed by the court on a summary conviction.
Regarding the reporting requirements, the Intellectual Property (IP) Assets Grandfathering Certification Programme Form must be filled by all IBC companies with no exceptions and submitted to the IFSC in electronic form before 31 January 2020. The submission is to be made by IBC companies through its registered agents in Belize irrespectively of presence or absence of IP assets.
Late submission or non-submission of abovementioned form will cause application of “an appropriate disciplinary action as per the authority directive”. Currently the disciplinary action itself (whether it is the same penalty as applicable for non-compliance with IP prohibition regime of 25 000/100 000 USD, or other liability) and list of persons to which it is applicable (registered agent, IBC company itself or its officers) are not clarified.Tags: offshores, Belize