Belize:
"One of the few places
where private banking is still private”
by Joel
M. Nagel
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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. Joel Nagel is an international attorney and
managing partner of the law firm of Nagel & Goldstein, with offices
in Pittsburgh, Washington, D.C. and Miami, Florida. He welcomes your
feedback at tel. (412)263-2707 or via e-mail at NagGol@aol.com.
IL
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 Mark A. Leslie, Executive Vice President, Georgetown
Trust Ltd.; tel. (501)14-8005, e-mail: Georgetown@btl.net.
-Joel M.
Nagel |
