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Once known as British Honduras, Belize is a tiny Caribbean country that is roughly the size of New Jersey. In 1990, it initiated a financial services industry that continues to thrive and expand to this day. Belize banking follows a two-tiered system that provides a wide range of services for different types of depositors. A strict and watchful central bank ensures the safety of the Belize banking industry. In addition, banks in Belize are required to maintain a 24 percent liquidity level at all times. This assures depositors that their money will be available to them at any time.
Gone are the days when offshore or international banking was cloaked in secrecy and thought to be the exclusive domain of high net worth individuals. Improved cooperation among an increasing number of countries and jurisdictions has shed much-needed light on the industry. Of course, Belize banks continue to value and guard the privacy of their depositors, albeit this time, under TIEA guidelines.
You can open both an individual as well as a corporate bank account in Belize. A Belizean LLC has strong asset protection features. Assets placed in a bank account under a Belizean LLC remain secure and safe from the grasp of predatory claimants. Add a Belize asset protection trust to the mix, where the trust owns the LLC, and you have one of the most powerful asset protection structures on the planet. When your local judge tries to take your money, he would have to go through an offshore trustee, over which he or she has no authority.
There are a number advantages to Belize banking including quick access to your money and higher interest rates on savings accounts. Belize banking is also very convenient. You can open and maintain your Belize bank account online. You can take advantage of investment opportunities through a Belize bank that may not be available through U.S. banks. This not only increases your income, it also helps mitigate changes in the market and industry.
Belize Banking System
Banking in Belize comes in two forms: an A-Class unrestricted license and a B-Class restricted license. International financial institutions must have $25 million in capitalization to acquire an A-Class unrestricted license. They must also pay an annual license fee of $20,000. Belize-based institutions are only required to maintain a capitalization of $3 million to obtain an A-Class license. A-Class license holders can transact any type of offshore banking business through its Belize office without restrictions.
The holder of a B-Class license can only engage in offshore banking activities that are specified in their license. They cannot provide checking or current accounts to their depositors, nor accept general public deposits. These banks are exclusively for foreign depositors, not for local Belizean residents. It has a lower annual license fee of only $15,000. Foreign banks must maintain a $15 million capital, while local license holders must maintain a $1 million capital.
This tiered system allows Belize banks to provide a complete array of services to both local and international clients. Despite its reputation as a desirable offshore banking location, Belize remains a small country. Its banking industry must serve its residents even as it caters to the demands of an international clientele. By establishing this type of banking system, Belize leaves no depositor behind.
Belize Banking is Considered Safe
The Federal Deposit Insurance Corporation (FDIC) insures U.S. bank deposits up to the amount of $250,000 per ownership category. Although Belize does not offer this type of insurance, it doesn’t mean its banks are operating without a safety net. The central bank of Belize monitors the country’s banking industry very closely. Investments are audited at least once, often twice, a year to ensure compliance with strict banking regulations. In addition, lending criteria are quite strict. Banks require at least a 50 percent loan-to-value ratio. Interest rates on loans are also set high. They often play between 11 and 14 percent, going even higher when you factor in fees and other such add-ons.
Liquidity is another reason behind the safety of many Belize international banks. They are required to have a 24 percent liquidity all the time. This means 24 cents of every dollar deposited in a Belize international bank has to be set aside to cover any big or sudden cash withdrawal. As any Banking 101 student will tell you, all things being equal, a highly-liquid bank is a more secure bank. Additionally, a bank’s liquidity inspires confidence in its depositors. Bank runs are rare in Belize – if, indeed, it has ever happened at all. This is because depositors feel confident that their money will be available to them if and when they should ever need it.
Belize pegs its currency to the U.S. dollar at an exchange rate of two Belize dollars to one U.S. dollar. To keep the exchange rate stable, Belize must maintain huge dollar reserves. This is true for any country that pegs its currency to the U.S. dollar – or the euro, for that matter. Belize’s banks have access to their country’s steady dollar supply, which further enhances their stability and security.
Belize Banking Confidentiality
Belize banking regulations support strict banking privacy. Nonetheless, Belize has kept up with the modern times and joined the fight against tax evasion and the laundering of illegal proceeds. To date, more than 100 countries have signed Tax Information Exchange Agreements (TIEA), including Belize. TIEA provides a system for a free exchange of financial tax information among countries and jurisdictions that participate in the agreement. This has contributed significantly to the lifting of the veil of secrecy that shrouded the offshore banking industry in general; especially when it comes to unlawful activity. There was a time some offshore jurisdictions considered it a crime to reveal the owner of an international bank account opened under their ‘protection.’ This secrecy only contributed to the reputation of offshore banks as repositories of untaxed income and drug and terrorist funds.
Belize still staunchly protects the identity of its international bank account holders. However, it now does so under new guidelines with other TIEA signatories. Increased reporting and cooperation are slowly getting rid of the dark characters that gave offshore banking its dubious reputation. You have nothing to fear if you earned your assets honestly and you’re a tax-paying citizen of your home country. International banking is completely legal and owning a bank account in a Belize bank is too.
Belize Banking and Asset Protection
Having your money in an offshore account can sometimes be enough of a deterrent for opportunistic plaintiffs. They know they face an expensive and time-consuming battle for your assets housed in an offshore bank. Belize lets you open both individual and corporate offshore bank accounts. Having two accounts keeps your assets separate and protects one account in case the other is compromised by a lawsuit.
A Belize LLC, or limited liability company has formidable asset protection features derived directly from Belizean legislation. You don’t have to conduct any actual business in Belize to open an international business account. Plus, by establishing the company in Belize, you place your assets under the protection of one of the most debtor-, trust-, and LLC-friendly jurisdictions in the world. Belize does not recognize foreign judgements against an LLC and routinely disallows petitions for a Mareva Injunction that would freeze assets. Better yet, Belizean courts require a bond of up to 50 percent of the claim amount before a trial can begin. If asset protection is one of your main reasons for banking abroad, you will find plenty of convincing reasons to choose Belize as your offshore jurisdiction.
Belize Banking Advantages
If you deposit U.S. dollars in a Belize bank, your money stays in the bank as U.S. currency. This means you can access your money more quickly than if it had been converted to Belizean dollars. It also means you save on conversion fees every time you make a withdrawal.
Belize banks still give slightly higher interest rates than most U.S. banks. In addition, your money in a Belize bank helps to diversify your investment portfolio. This can lead to higher yields and added income for you. Your return is infinitely higher if the alternative was losing all of your money in a courthouse if the funds had been parked in a U.S. bank. Moreover, you’re better able to weather unpredictable market fluctuations if you maintain a varied portfolio.
Belize banks are known for their strict loan requirements. However, with an international account, you may eventually qualify for credit with your bank. This may not necessarily be a bargain due to the country’s high interest rates on loans. But if you’re engaged in some type of business in Belize, a credit line might be useful in a pinch.
Belize banking is convenient; you can easily view your accounts online. When you decided to open an account, you can use the telephone numbers or inquiry form on this page. You will have to mail us notarized copies of some of the required original documents. Once you have your Belize bank account up and running, you can enjoy many of the privileges you get from a U.S. domestic bank, including debit cards, depending on the bank. Most Belize banks have toll-free U.S. numbers for their customer service. You can manage both your Belize and your domestic U.S. accounts completely from the comfort of your home.
Belize Banking Conclusion
Belize banking offers a wide range of financial services for almost every type of local and international depositor. A vigilant Central Bank helps ensure the security of the Belize banking industry. It does this by enforcing strict liquidity levels, maintaining ample dollar reserves and reviewing all bank investments regularly. Belize remains committed to safeguarding the privacy of its international account holders by adhering to strict TIEA guidelines. There are several advantages to opening a Belize bank account. Some of them are: asset protection, quick access to your money, higher interest rates, and the ability to bank online from anywhere in the world.
There is no single location that’s ‘ideal’ for opening an offshore bank account. You need to choose a country or jurisdiction that meets your particular set of requirements. If you put in the time and do the legwork, you will find the offshore location that’s ideal for you.