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Belize - Banking
Since the 1990s, Belize has been a tax haven, both for offshore companies and for retired expats who live there.
The official currency in Belize is the Belize dollar, which is divided into 100 cents. You will see prices written as $ or more typically BZ$. Coins are available as 1, 5, 10, 25, 50 cents and $1. Notes of $2, $5, $10, $20, $50 and $100 worth are in circulation.
Since Belize is a Commonwealth country, the Queen’s head remained on its currency even after full independence was gained. The notes are carefully designed so that the other images reflect the country’s own wildlife, history and culture.
Bank branches in Belize have fairly short opening hours, and normally close at 2pm or 3pm.
Most upmarket businesses in and around the cities and coastline which are popular with expats will have debit and credit card payment terminals. ATMs will be plentiful in these areas. Out in the rural areas, cash will be required and ATMs may be harder to locate.
Many businesses will accept payment in US dollar notes, although US cent coins will not be widely accepted. If paying in US dollars, make sure you agree the US amount before payment; since 1978, the currency has been pegged so that one US dollar is worth two Belize dollars.
As in any country, expats may well spend their first few months translating costs into their home currency and comparing them. In Belize, this make you feel as though many things are very cheap, meaning you pay less attention to the local going rate for the items you are purchasing. Whether you are paying for these goods out of your earnings or retirement funds, becoming more savvy about your outgoings will make your money stretch further, especially as Belize is the most expensive country in its part of the world.
Buying locally produced food will help drive down your household costs. Imports will be more expensive, especially for items such as processed food from the UK and US. This may require a period of adjustment to adjust your diet, but the improvement in your wallet – and potentially your health – will be worth the effort.
While housing, food, medical expenses and taxes in Belize is cheaper than in many Western countries, there are some other elements of life there which will cost more. Electricity and internet costs will be higher than you expect, and the price of petrol or gasoline for your car may be higher if you have arrived from countries which don’t impose taxes on it.
If you are living in a part of Belize popular with expats, there will be many places to eat and be entertained, sports and leisure facilities, and places to be pampered. The costs of a busy life enjoying these facilities can soon add up, especially if you previously led a quiet life in your home country. The cost of services in a basic establishment serving the local low wage population will be much less than the elegant facilities offered to expats, but you may prefer to pay the difference for the superior facilities and convenient location.
If you wish to open a current account in Belize, you will need to bring documents which confirm your identity. These will include an original utility bill to confirm your home address. A copy of your passport, or other identity document including your name, signature and photograph will need to be notarized. Sometimes banks will request further identity documents.
You will also need to include in your application a letter from your previous bank confirming that you were a client for a minimum of two years. A reference letter from a lawyer or accountant who has known you for at least two years is also required, and if you cannot provide this then a letter from a second bank will be needed. Again, the bank must confirm you were a customer for at least two years.
It is possible to find banks in Belize which offer customers a multi-currency account. These can include Euros, Pound Sterling and US dollars.
The SWIFT system, a secure method of making international wire transfers, can be used by customers of the international and offshore banks in Belize.
The retired persons incentive programme allows people to live in Belize tax free. To qualify, you must be aged over 45 and deposit a minimum of $2,000 a month from income or investments earned outside of Belize into a local bank account. Alternatively, you may pay $24,000 once a year from your investments into a bank account held in Belize. No tax will be applied to earned or passive income, regardless whether it is remitted in Belize or not.
Anyone entering the country under the incentive programme is allowed to import their personal and household goods, plus a car or a boat, without having to pay taxes or import duties, up to the value of $15,000.
In 1996, Belize implemented the international business companies (IBC) act, the trusts act, and the offshore banking act. Further amendments took place in the year 2000. As a result of these laws, companies can now be incorporated in Belize within a few hours. The country holds a comprehensive, computerized register of IBCs. These have a tax free status from income, dividends, interest and capital gains, and pay no stamp duty. There are no reporting requirements. No company secretary is needed. At least one shareholder must be appointed, but there is no maximum limit imposed.
Trust incorporation in Belize allows all personal and business earnings to be received free of any tax charges. Inheritance, succession and gifting are also exempt from tax.
In traditional tax havens which have treaties with other governments, such as Switzerland and Luxembourg, concerns about tax evasion and corruption have led to some regulatory changes. Belize has been unaffected by these as they do not have any tax treaties with other governments. The country’s banking regulation only allows names and account information for companies, foundations and trusts to be disclosed through a court order as part of a criminal disclosure.
There are no legal restrictions on the amount of currency which can be moved in and out of Belize. There is no exchange control policy, so offshore companies incorporated in Belize do not have to report currency transfers, at any level.
Financial institutions who maintain and operate services in Belize can apply for an A-Class unrestricted license. This requires a license fee of $20,000 to be paid each year, and the company must hold capital of at least $3 million. International companies are required to hold capital of at least $25 million. The unrestricted license permits banking operations without local regulation.
Limited licenses, also known as B-Class licenses, are available for local financial institutions who have a minimum capital holding of $1 million, or $15 million in the case of international companies. The licenses cost $15,000 per year. Restricted banking activities are permitted as set out in the license. Deposits from the general public cannot be sought or accepted. Checking and current accounts cannot be provided.
International Financial Services in Belize are regulated by the international financial services commission.
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