Understanding the Role of International Banking in Belize’s Economy
While much of the focus on international banking and investing tends to focus on the individual or entity opening offshore accounts, the countries that have these accounts benefit in a number of ways. Belize is one such good example.
As one of the more popular options for establishing offshore accounts and pursuing investment opportunities, the role of international banking offers significant benefits for this country. Here are some facts you should know about international banking’s impact on the economy and how it positively contributes to the advancement of this jurisdiction.
Belize As Part Of The Caribbean Financial Community
One of the first things you need to know about economic development and growth within Belize is that the country is not attempting to do everything alone. Belize has been part of the Caribbean Community since the early 1970‘s. Typically referred to as CARICOM, the community includes member nations like Jamaica, the Cayman Islands, Bermuda, Haiti, and the British Virgin Islands. There are also associate members like Aruba, Panama, Mexico, and Venezuela.
The stated purpose of CARICOM is to promote economic growth by encouraging trade and economic integration among the constituent nations. It’s also designed to aid in coordinating development planning and foreign policy that represents the member countries. This background makes it easier to understand the setting in which Belize strives to develop and grow the economy with resources that are both internal and external.
Your Offshore Accounts And The Ability To Purchase Property In Belize
Real estate is one of the prime movers of economic development in Belize. While some of the development comes from domestic sources, a significant amount is due to international investors and buyers. It’s not just people who plan on retiring to the country eventually who help to drive the real estate market. Business owners also seek to purchase and develop properties.
One of the things you need to know about real estate purchases in Belize is that there’s a good chance that banking institutions in your country of origin are not likely to extend financing for this purpose. That is certainly the case if your country of origin happens to be the United States. The situation is also complicated by the fact that Belize institutions that lend money to foreigners are somewhat limited. As a non-citizen, you won’t be able to walk into the typical local Belize bank or credit union and obtain a mortgage.
How can the issue with purchasing property be managed? One approach is to buy the property outright. By using funds in your offshore accounts, you pay for the property that you want to purchase. There’s no need for financing, so you can circumvent the entire issue.
Another possibility is working with an international bank in Belize that does have solid corresponding banking relationships with financial institutions in other countries. While it may take some arranging on your part, this could result in offshore mortgage terms that would work well for you.
Utilizing Those Properties To Grow Your Offshore Accounts
Now that you own the properties, what’s done with them? If you purchased residential properties, develop them and utilize them to provide short-term housing for tourists. This type of arrangement allows you to generate income that ends up in your offshore accounts. Think of it as putting the asset to work for you pending the time when you decide to retire to Belize.
Don’t forget there may be some restrictions on who you can lease the property to at any given time. There are some restrictions on leasing to family members, although there are exceptions. In general, plan on leasing to tourists or those who would like to remain in the country for an extended period of time. Even as you benefit from the rental receipts, the tenant’s spending stimulates the local economy, something that indirectly benefits the entire country.
Be mindful that regulations applying to residential structures may or may not apply to business structures. It helps to obtain legal assistance so that there’s no misunderstanding about how you can use the property and what types of standards it must meet.
Some Information About Tourism In Belize
A look at tourism in Belize for 2018 illustrates how it contributes to economic stability and development. Considered the fastest growing tourist attraction in the Caribbean currently, there were 372,075 stayover tourists as of the end of September during the year cited. This constituted a 16.6% increase over the previous year.
While figures for 2019 are not currently available, there is every reason to anticipate another increase over 2018 has taken place. Simply put, tourism is contributing directly to the country in a number of ways, and likely in some indirect ways that are not included within the scope of many studies.
International Banking And The Connection With Tourism
Remember that purchasing property is a great investment for you. It’s also exceptionally good for the country, since it has the potential to provide one more reason for tourists to choose Belize over other countries, and thus generating more income that remains within the country.
Belize benefits from the tourist dollars that are spent as those visitors make their way around the country. Since some of them will need to set up offshore accounts that make it easy to pay for everything from food to travel and living accommodations, therefore this international banking solution also helps strengthen the national economy.
There are other areas of the economy that are bolstered by tourism. Properties found near waterways mean people renting superyachts and other crafts that they dock during their stays. It’s not unusual for those who purchase rather than rent superyachts to register their crafts under the country’s flag. Couple that with the fees for being able to dock and house the crafts, and you see one more way that tourists support the economy.
Why Contribute To Belize’s Economy?
If you eventually plan on moving to Belize, it makes sense to support the economy now. Investing in real estate means one more way to be financially secure during the retirement years. It also means acquiring assets that are there when you need them, since they’re safely housed in your offshore accounts.
Are you ready to get started? Talk with a financial services professional today and outline what you have in mind. From there, it will be possible to begin building a set of offshore accounts and assets that help you eventually achieve all of your financial goals.
For more information on offshore banking in Belize, please visit us HERE.
I was fortunate enough to be featured on The Banker. Here is my article, I hope you enjoy! Latin and Caribbean banks work to relieve pain of de-risking.
About The Author
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank, a FinTech School Instructor and the published author of The Digital Banking Revolution – now in its third edition. You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege
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