Belize: One of the Few Places Where Private Banking Is Still Private
Reprinted from International Living -- July 2000
Under the guise of fighting international money laundering and stopping drug cartels, high-tax countries are trying to eliminate the attractions of tax havens to stop potential tax dollars from leaving their shores. Many former colonies, possessions, and countries closely affiliated with the more developed OECD countries are creating high barriers to entry or even eliminating tax-haven benefits to citizens of the United States. Other high-tax jurisdictions are being excluded too, for fear of trade isolation, boycotts, and the elimination of international aid.
But one country successfully bucking the trend is Belize. In 1991, the legislature introduced serious offshore legislation, first allowing the creation of offshore corporations and then passing attractive trust laws-legislation that was expanded throughout the 1990s. In 1996, however, the United States began putting pressure on Belize to enter into a Mutual Assistance Treaty (MAT) that would include all varieties of information exchange including fiscal and banking information. While Belize offered to enter into agreements to combat international drug trafficking as well as other criminal conduct, it refused to include fiscal issues like tax evasion or to disclose its banking information to third parties.
More Offshore Legislation
The United States responded by putting Belize on a list of countries (along with places like Columbia) that were refusing to assist the United States in combating international drug trafficking and money laundering. Had Belize remained on that list, it would have been restricted from receiving any U.S. foreign aid.
Belize resisted the pressure to give in to U.S. demands and instead, by 1997, enacted further offshore legislation designed to attract international banks to relocate to Belize. Coupled with this legislation, however, were new bank-privacy laws with some U.S.-style, anti-money-laundering provisions.
By adopting the U.S.-style “know your client” rule into its banking laws, Belize made it impossible for the U.S. to take the position that it was not assisting in the international prevention of money laundering. So Belize dropped from the infamous “list.”
At the same time, by successfully standing up to U.S. pressure and further enhancing their offshore legislation, Belize began to bloom and grow as a credible, safe-money haven. In the fall of 1998, the government again began expanding its offshore legislation. The first offshore banks were registered and licensed under the new international banking laws. Mutual-fund legislation was passed.
Offshore and captive insurance company legislation was enacted. And most recently, a new “qualified permanent residence law” was created to attract retirees to Belize where they can live a tax-free lifestyle.
Belize’s commitment to going its own way and resisting international pressure has been a proven success. From 1990 to 1997 roughly 3,000 offshore companies were registered in Belize. But between 1998 and March 2000, the total number of offshore companies registered in Belize exceeded 14,000. The number of banks and investment houses, trust companies, accounting firms, and offshore specialists has also grown dramatically in the past few years, as have the amount of dollar deposits in both the private banking system and the Belize Central Bank. Companies establishing themselves in Belize are finding a government committed to a no-tax system with laws and infrastructure designed to ensure privacy and protect assets. These attributes, when coupled with an English-speaking population and laws very similar to our own, make Belize one of the world’s top tax havens, a truly safe locale for your money.
An Affordable Haven
Because of its tourist potential, Belize is like the Cayman Islands 20 years ago. But fortunately for Belize (and unlike the Caymans), Belize will not have its laws and fiscal policy influenced by either Great Britain or the United States. And the costs of setting up and establishing an offshore presence in Belize is only a fraction of what you’d pay in the Caymans. The most expensive beachfront property on Ambergris Cay, for example, will run you about $3,000 per waterfront foot. Much of it, however, sells for $1,000 to $1,500 per waterfront foot. By comparison, the same amount of frontage on Seven Mile Beach in the Cayman Islands costs over $40,000. Corporate set ups in Belize are inexpensive too, costing $4,000 to $5,000 compared with $12,000 to $15,000 in the Caymans. Bank capitalization costs a minimum of $500,000 in Belize and over $10 million in the Caymans. The cost of the license is $15,000 to $25,000 in Belize and hundreds of thousands of dollars in the Caymans.
Belize’s Best Offshore Provider
If you plan on setting up any type of structure in Belize and don’t require U.S. legal advice, I recommend Georgetown Trust Ltd. As the only offshore provider set up on Ambergris Cay, the company can help you with incorporations, trusts, economic citizenship, the new retirement residency program, insurance company registration, and registered-agent services. Contact Georgetown Trust Ltd. via telephone (501)14-8005 or through their website.
Copyright 2002 Nagel & Associates, LLC