Industry-wide changes have taken place since we first posted this article. The G-5 nations a full-court press aimed at shutting down Belize’s offshore financial industry. Once one of the fastest growing ways to invest in Belize was to open an international bank account. International accounts were available to all non-residents of Belize, and if you were a foreigner living in Belize, a Belizean who has migrated to another country or an investor who wanted to diversify their portfolio and hold funds in multiple countries, it was easy sailing. Now no more.
There are five international banks located in Belize. Four of them are centralized in Belize City namely, Atlantic International Bank Limited, Belize Bank International Limited, Heritage International Bank Limited and Choice Bank Limited. Caye International Bank Limited is located on the island town of San Pedro. Atlantic International Bank Limited has branches in San Pedro and Placencia while Belize Bank International Ltd. and Heritage International Bank Ltd. have a branch in San Pedro, making it more accessible to highly visited locations in the country. Each bank has basically the same requirements and conditions to open a bank account, however each bank has their own policies, so the requirements may vary a little from one bank to another bank. Similarly, bank charges are also very much alike.
But now most banks in Belize have shuttered their international banking arms. This has come about as result of the U.S. government arranging for most Belize banks to lose their international banking corresponded banking relationships. Bank of America – BOFA – was the first to take this step. In press release, BOFA stated that the Belize market was simply not worth the risk, and hence it was derisking the jurisdiction.
Most banks charge a monthly fee to maintain your account(s), fees for transfers such as incoming and outgoing wires. However there are banks that have less charges than others. For instance, some banks charge to hold a savings account while others do not. International Bank Services and bank charges can be found on the bank’s website.
Most of the international banks in Belize offer several types of accounts including the standard savings, demand deposit accounts and term deposits for both personal and corporate customers. Some banks offer additional types of saving accounts that yield a greater return on investments. The standard minimum balance for opening a demand deposit account is US$1,000.00. This type of account is primarily used as an operational account where many transactions can be done.
A savings account has several opening and minimum balance requirements, offered to clients, in order to yield higher interest. The opening balance requirements range from about US$500.00 to as much as US$25,000.00. Interest rates vary with each bank where you can earn anywhere from 0.5% to 3% depending on the type of account and balance.
Opening an International Bank Account
One of the benefits of opening an international account in Belize is the fact that you never have to step foot on Belizean soil to open and operate your account. All of the banks allow communication and interaction to be done via email or fax.
The first step to opening your account is to research the banks fully and choose the one that best suits your individual needs. Although majority of the services, fees and products are the same, there are differences which could make one more attractive than the other.
All banks have application forms for opening an account available on their website. The normal procedure to open an account is to print out the forms, complete them and send them in with the additional documentations required. Additional documents include a notarized copy or copies of signatories’ passport, two letters of reference and a utility bill or proof of address.
If you are opening an account for a company, you will be required to provide a full set of company documents, including articles and memorandum of association, share register, and a company resolution to open the account. To facilitate the process some banks will allow you to apply for the account with copies of all these documents, rather than originals. However, you will still be required to submit the original application forms and notarized documents, after the account is approved. This process allows potential clients to correct any errors on the forms and documents before sending the original documents via mail.
International Bank Services
There are other services that you can apply for while opening your account such as online banking. Online Banking is one of the primary tools offered to clients to make banking easier and more accessible. Online Banking has many benefits to both clients and the bank thus it is offered free of cost. This service allows you to check your account balance or request a wire transfer. It also allows you to pay your credit card from your bank account. Other services available to expats include home financing. Check out our guide on Home Finance Options In Belize.
Another essential service that the banks offer is credit card services. Some banks offer both Visa and MasterCard but a few offer only MasterCard. Debit Cards are not common therefore it is customary for clients to own a prepaid card linked to their bank accounts. These cards allow you to make withdrawals and purchases using your own funds.
International Banks don’t normally offer check-books to clients; however you can request a bank draft if there is a need to send funds from your account to someone else. International Banking is offered only to non-residents of Belize, therefore only a few of them offer cash withdrawals at the bank itself. However, with a prepaid card or credit card from your international bank, you can do a withdrawal at almost all ATMs in the country that displays the Visa or MasterCard logo.
FATCA and Offshore Banking
FATCA is the Foreign Account Tax Compliance Act enacted by the U.S. Congress:
The Foreign Account Tax Compliance Act (FATCA) is a portion of the 2010 Hiring Incentives to Restore Employment (HIRE) Act that requires individuals to report their financial accounts held overseas and foreign financial institutions to report to the U.S. Internal Revenue Service (IRS) about their U.S. clients. FATCA was designed primarily to combat offshore tax avoidance and internationalize the U.S. extra-territorial based tax regime. It adds a new chapter to the Internal Revenue Code (Chapter 4) aimed at addressing perceived tax abuse by U.S. persons through the use of offshore accounts. As of May 2015 the FACTA requirements are now law in Belize and this has led to some disruption in this sector of the banking industry, with one bank temporarily losing its U.S. banking corespondent relationship with the Bank of America. One bank with a branch in the Corozal Free Zone on the border with Mexico, has decided to close shop. This after persistent allegations that the government-run Corozal Free Zone, mainly operated by Indian, Arab and Mexican merchants, is a hotbed of shady imports, including counterfeit high value items such as liquors, cigarettes, footwear and designer clothing, jewelry and accessories.
Under the provisions of FATCA, all banks (including offshore banks) and credit unions in Belize are now required to take a statutory declaration of any new customer applying for an account, to determine if the applicant is a “U.S. person”. At the same time, all banks and credit unions are required to process their database of existing accounts to determine U.S. indicia. Indicia of U.S. status is a test to determine taxable liability to the U.S.A. and accomplishes this by scanning for among other flags, place of birth, “Green Card” status, U.S. residence address or correspondence address, instructions to transfer funds into or out of U.S. bank accounts, and power of attorney or signatory authority granted to a person with a U.S. address.