Banking and Business Laws in Belize

Caye International Bank

What are the banking and business laws in BelizeAs more people look to make smart decisions about their money, offshore banking strategies rise to the top of the options list. Whether you’re planning to retire internationally, invest overseas, or move your business offshore, banks in Belize can be a smart choice.

Thanks to banking laws in Belize, there is an inviting financial climate for investors and account holders from around the world. Take a closer look at some of the many banking and business laws in Belize that could be of benefit to you and your investments. 

Regulating Bank Liquidity in Belize 

Any time that you decide to place your assets in a bank account, you’re placing trust in that institution. That’s why it makes sense to do your homework and research various banks before you decide to invest. However, there is one more factor at play that shouldn’t be ignored: Liquidity.

Banks may advertise high liquidity rates, which simply means that they keep liquid assets on hand for a certain percentage of the total value held in the bank at any one time. If a bank has $100,000,000 worth held in its accounts, and it has half of that in liquid form, then it has a liquidity ratio of 50%. 

In Belize, banks are required by law to have a set liquidity ratio. That ratio is set at 24%, which is far higher than in many other countries. These bank reserve requirements in Belize are at least four times the reserve requirements of those in the United States for their local banks. With a minimum liquidity ratio of 24%, bank account holders and investors can enjoy peace of mind. 

In addition to an impressive liquidity ratio, banks in Belize are also required by law to have a set percentage of cash reserves on hand. Once again, this is beneficial because it can help stabilize the bank itself and even the economy. If a bank run ever happened, an unlikely scenario in stable Belize, customers could still withdraw cash as needed. All of these regulations came into law specifically to increase customer confidence in the banks of Belize. 

The Value of the Belize International Business Companies Act 

A staggering number of investors who choose to operate and invest within Belize establish an IBC (International Business Company). These companies are possible thanks to the Belize International Business Companies Act, which was first passed in 1990. Not every business established in Belize is an IBC. Instead, an IBC is a specific type of business that can only do business with non-residents of Belize. 

An IBC can establish an office in Belize, even utilizing only a virtual office. Then, the IBC can take advantage of the excellent international banking system Belize has to offer. Most importantly, an IBC has the ability to operate tax free in Belize.

As an added bonus, an IBC can take advantage of a number of regulations reserved exclusively for international business companies. Even the dividends paid to shareholders are exempt from taxes, and you can form share capital using the currency of your choosing. In short, the Belize International Business Companies Act lets you conduct any kind of legal business from a welcoming and financially beneficial environment.

Setting up an IBC is not a difficult process. It is straightforward, reasonably priced, and can be done in a matter of one or two days. Plus, an IBC is not just a designation for a large, multinational corporation. A single person can establish an IBC, and it can be a great vehicle for offshore investment, trusts, real estate, or even life insurance wrappers. 

What to Know About the Money Laundering and Terrorism (Prevention) Act

Clearly, Belize has created an atmosphere that is ideal for investors from around the world. By keeping taxes low for foreign investors, and by allowing IBCs to operate with minimal interference, Belize is a popular place to do business. However, there are still plenty of banking laws in Belize that ensure compliance with safety and international legislation. Specifically, the Money Laundering and Terrorism (Prevention) Act is designed to keep investors in line with the law. 

There once was a stigma associated with offshore banking that made some innocent investors feel like they were doing something illegal. Today, however, there are several rules and regulations in place that make it easy to follow the law and difficult to break it.

Belize has laws that require investors to disclose key facts about themselves and how they do business. Although you don’t have to disclose your records or publish the names of board members, you do have to be upfront and honest when establishing banks accounts or businesses. This makes it easier for the Belizean government and the Central Bank of Belize to ensure compliance. This is also highly convenient for the individual because supplying necessary and helpful information at the outset allows you to operate freely in the future. 

The same concept applies to laws like FATCA, or the Foreign Account Tax Compliance Act. Although FATCA is an American law enforced by the IRS, compliance is required by Americans banking overseas as well as by any international banks that offer accounts to American residents or citizens. 

Laws That Created the Offshore Bank in Belize

Belize has two major types of banks within its borders. The first type is a group of commercial local banks, and the second type is a group of offshore or international banks, often referred to as private banks.

The two groups are kept distinct to offer great opportunities to foreign investors but still control and stabilize the local economy. If you’re looking to Belize for offshore banking or investment, then you’ll need to look closely at the offshore bank options, such as Caye International Bank. 

Offshore banks are still relatively new to Belize. It was only in 1995 that the Banks and Financial Institutions Act was passed, followed shortly afterward by the 1996 Offshore Banking Act. These laws made it possible for offshore banks to be formed, and the act established that the Central Bank of Belize would regulate their operation.

Belize is the Right Climate for International Banking

Reputable offshore banks can allow investors to enjoy greater privacy, asset protection, and countless opportunities for financial growth and security. The banking laws in Belize don’t limit the movements or actions of the individual, instead, they create a welcoming climate that is ideal for foreign investors.

Whether you’re looking for a safe place to store assets and diversify your portfolio or you’re excited about a new business offshore, banking and business laws in Belize are designed to help you achieve your goals. As the first Belizean bank to become FATCA compliant, Caye International Bank understands applicable banking laws and what is required for individuals and corporations. Let the professionals at Caye help you take the next step toward reaching your offshore banking objectives.

Contact Caye International Bank today to get started!

This article is copyright © 2019 

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About this author:

Luigi Wewege

Luigi Wewege is the Senior Vice President of Caye International Bank, published author of The Digital Banking Revolution, has co-authored economic research which was presented before the U.S. Congress and currently serves as an Instructor at the FinTech School as well as a Speaker at the Silicon Valley Innovation Centre. He holds an Italian MBA with a major in International Business, as well as a BSBA with a triple major in Finance, International Business, and Management - cum laude from the University of Missouri-St. Louis.

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