Belize Commercial Free Zone

The Commercial reposition order pic Sign to entrance to CFZ pic Map layout of CFZ pic Plazas, Company Stores & Shoppers inside The regularise. CRS104-2 Group 7/ D Research Question Identify an industry or economical discipline with in your country where valueation and protection as been distant and look at the condition of it with in your country in wrong of 1. has it worsen or improve 2. variety of choice ( no specification of products made) 3. price of goods ( no characteristic of the prices of goods) 4. oer exclusively employment 5. quality (no indication of the quality of goods) 6. government revenue 7. ocal industry A Brief over View of the Commercial leave office govern or CFZ The Commercial Free Zone is one of Belizes many Offshore Companies or industries use to tie contradictory adornors from all over the world to increase Belizes prudence and northern frugality. Belizes legislation defines CFZ as a geographic ara in Belize designated outside national cu stoms territory and duly qualified by controlled access, wherein the benefits created shall apply to a complex of industries. The CFZ boarders Mexicos South easterly border and allows investors to directly access Mexicos high end consumer mark outet.Corozals Commercial Free Zone is infra the management of the Commercial Free Zone Management Agency (CFZMA) and is headed by the Chief Executive ships officer under a Board of Directors at heart the Zone. The Commercial Free Zone (CFZ) was established under the Corozal Commercial Free Zone Act of 1994 and was in place by 1997. The FZA is the most modern laws governing Free Zones in Belize. Business entrepreneurs argon passported insane tax free business opportunities. Businesses in that location are free of foreign ex assortment restrictions and benefits such as province apologizeions and tax spends.Goods trade or exported are absolve from any duties, quotas, effect duties and revenue replacement duties. Income tax on Comme rcial Free Zone businesses is usually charged between 2% and 8%. Businessmens 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, processing, warehousing, packaging and distribution of goods and work. This allows the businessmen today to manufacture, merchandise, export, distribute fuel, and to offer retail or wholesales to Mexico and many former(a) international clients.By doing so, they are in addition 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 gone vast improvement since therefore and continues to do. What started out prototypical as a private sector with a great struggle to attract investors began to pay off due to the involvement of the few businessmens determination and dedication. First in that respect were a few companies that only imported and exported their merchandise, then one or two retail inventorys, and then there was the addition of a SHELL gasoline station.This then offered the Mexicans an economical and go bad 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 location to batteries. Benefits that Foreign Investors Receive from CFZ The following is an extended list of benefits that Investors sire 1. no restrictions on foreign exchange out of or within a CFZ, including the sale of foreign currency or the transfer of foreign exchange 2. noGovernment charges and taxes on foreign currency use within a CFZ 3. all merchandise, articles and goods that enter a CFZ for commercial purposes are exempt from import duties, revenue replacement and stamp duties 4. all fuel and goods, including buildings materials, equipment, furniture, supplies, etc. , undeniable for th e 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 open an account in any currency with a duly registered cashbox of CFZ business choice located in the CFZ 8. no import or export license is required for imports or exports 9. imports and exports are exempt from all custom duties, consumption and excise 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 in the altogether corporate tax levied by the Government of Belize any dividends paid by this business are exempt from tax for the first 20-year period of its operation 11.The loss incurred over the 5years tax holiday by a CFZ business may be carried previous and deducted against profits in the 3 years after the tax holiday period 12. An y proceeds from the sale of stock or other ownership interest in a CFZ business are exempt from the above-mentioned tax. Employment, Government tax income, CFZ Current State of Being and Effects on the Belizean Economy Employment The main 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. Now there are about 700 which are offering employment to over 3000 Belizeans. Government Revenue 1. In 2004, CFZ brought in $274 million in economic exertion each year of which the Government charged income tax as the five year mark had passed in 2002. 2. CFZ Christmas sales were approximately 50 percent lower than 2004 in 2008 CFZ Current State of Being Investors are losing confidence in the Belizean thriftiness as 1. there is less economic activity in the zone.This has left hand investors who energize built million dollar shopping plazas unable to take i n financial commitment. As a result, half of the facilities founder now start out vacant. 2. The Chetumal Chamber of Commerce consistently pressures the Mexican Federal government to block Mexicans from purchasing at CFZ. 3. Before the Belize Bank and Atlantic Bank have been depositing pesos from the Free Zone in banks in Chetumal. Now Mexican banks are refusing to accept pesos deposited at CFZ due to money laundering concerns. Investors are then forced to keep large sums of pesos which posses the danger of theft.As a result the risk of excess pesos forcing the Market is eminent causing investors to sell excess pesos to local anaesthetic currency dealers at a loss due to Mexicos seismal 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 do llars for the past three weeks. As a result, there have been several U. S. dollar freezes at CFZ in 2002, 2009, 2010.This is a very flagitious 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 fell by 38. 9 percent to a new low of $114. 5 million due to losses in the world-wide economy . When economic activity fell 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 less income is being gained by the government through income tax.As a result Commercial activity continues to decline. 2. CFZ income is interdependent on foreign currency, especially 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 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.