Introduction
Bordered to the south and west by Guatemala, the north by Mexico and the east by the Caribbean, Belize, formerly known as British Honduras, is a country in Central America established by a British shipwrecked seaman in 1638.
Once part of the Mayan Empire and very briefly the Spanish and then the British Empire, Belize gained its independence in 1981.
With one of the lowest population densities in the world, hosting 320,000 people (2008 est.) across 22,960 square kilometers (8,867 square miles), the country’s population growth rate, 2.21% (2008 est.) is the highest in the region and one of the highest in the western hemisphere. It remains a Commonwealth realm.
Culturally, Belize primarily associates with the English speaking Caribbean countries such as Jamaica and Trinidad and Tobago. This diverse society, composed of many cultures and speaking many languages, such as Kriol and Spanish, is the only country in Central America where English is the official language.
The most common way to travel across Belize is by bus, where a number of bus services run daily, classifiable as either Regular runs(usual prices) or Express runs(faster, for slightly higher prices). Travelling by road covers 2,872Km, of which only 565km are paved, whereas the country’s coastal areas are home to several water taxi services.
Belize is a parliamentary democracy, a constitutional monarchy and a member of the Commonwealth of Nations. The structure of government is based on the British parliamentary system, and the legal system is modeled on the common law of England. The current head of state is Queen Elizabeth II of the United Kingdom, who, as Queen of Belize, is represented in the country by the Governor-General. However, the cabinet, led by a prime minister, who is head of government, acting as advisors to the Governor-General, in practice exercise executive authority. The bicameral National Assembly of Belize is composed of a House of Representatives and a Senate. Belize is a full participating member of the Caribbean Community (CARICOM).
Business Environment
Belize has a favorable business environment; with minimum regulatory restrictions. The professional infrastructure is reasonably good. Belize has high reputation in terms of efficiency and low costs. As a newcomer in international financial services, its offshore business services were launched in 1989 with the enactment of the Registration of Merchant Ships Act which served to constitute an open ship registry and give birth to the International Merchant Marine Registry of Belize (IMMARBE). Nowadays, more than 3 000 vessels hoist the Belizean flag and IMMARBE offices are located all over the world. Most of the International Maritime Organization Safety Conventions have been ratified by Belize.
Economic Environment
The Economic Cooperation Programme, which complements and forms an integral part of Belize’s National Development Plan, assists in guiding Belize’s development efforts from year to year. The economy of Belize was traditionally based on forestry, mainly the export of logwood, mahogany and chicle. The country’s economy is now based on agricultural development, but in recent years there has been a resurgence in forestry with tourism and construction recently assuming greater importance
In 2006, the cultivation of newly discovered Crude Oil in the town of Spanish Lookout, has presented new prospects and problems for this developing nation. It has yet to be seen if significant economic expansion will be made by this. To date, oil production equal 3,000 bbl/day (2007 est.) and oil exports equal 1,960 bbl/day (2006 est.). Sugar, the chief crop, accounts for nearly half of exports, while the banana industry is the country’s largest employer.
Taxation
Internal Belizean taxes are moderate. A turnover-based tax is small, corporation tax is 25%. On income and social contributions employees pay up to 45% tax. There are many offshore schemes that include a modern trusts law, IBC legislation and an array of free zones and investment incentive schemes.
A 15% Value Added Tax, or VAT, which provided the Government with some 30% of its tax revenue, was abolished in 1999 in favor of a ’sales’ tax,’ which in turn was replaced with a 10% Goods and Services Tax (GST) in July 2006.
Belize Income Tax
Belizean workers who make less than US $20,000 per annum pay no income tax. Deductions are also allowed for medical expenses. Generally, non-Belizeans in Belize pay tax only on income derived in Belize. There are no capital gains or inheritance taxes in Belize.
Belize Social Security Taxes
In general, any employment in Belize under a contract of service or apprenticeship, written or oral is insurable employment. This includes employment with the Government and all statutory bodies, employment with a company or firm or by an individual, and employment on board vessels and aircraft whose owner resides or has his principal place of business in Belize.
The employer is responsible for registering employees. When a person is registered as an insured person, the Social Security Board will issue to him/her a “Social Security Registration Card”. The registration Card will show that person’s Social Security Number, which he/she must use as reference on all correspondence, claims, etc. when dealing with the board.
Belize Stamp Duty
The cost of a transfer of title to real property is 10% of the value for Stamp Duty and a token fee for registration. Unless there is an agreement to the contrary these costs are usually shared between seller and buyer. Other types of transaction are also stamped, at various rates, especially if they involve the Government.
Belize Goods and Services Tax
On July 1, 2006, a new 10% Goods and Services Tax (GST) went into effect in Belize. The GST replaced the 9% sales tax which had been in effect since April, 1999.
The GST applies to most goods and services, including some real estate transactions and all hotel and tourism charges. Exceptions are certain food items, including rice, flour, bread, fresh fruits and vegetables, chicken, and fish. Also, electricity usage of less than BZ$150 a month won’t incur the GST. The GST is included in the price of goods and service before purchases.
Banking
The Belizean Dollar has a fixed rate of exchange (BZ$2: US$). Most tourist businesses will accept US dollars, credit cards or traveler’s checks. The Belize dollar is difficult if not impossible to exchange anywhere outside of Belize (except at border areas of Guatemala and Mexico).
Belize has five commercial banks, of which the largest and oldest is Belize Bank. The other four banks are Alliance Bank of Belize, Atlantic Bank, FirstCaribbean International Bank, and Scotiabank (Belize).
Only the Central Bank authorized dealers and authorized depositories may deal in foreign currencies, Under the Exchange Control Regulation, Section 43, of the Laws of Belize (1980). Additionally, the permission of the Central Bank is required in order to secure a loan from outside Belize which involves a foreign currency and to service repayment of foreign dept. Foreign investors are required to register any investments made in Belize with the Central Bank to facilitate the repatriation of profits, dividends, etc. The approvals from the Central Bank are easily secured for lawful and approved enterprises.
Offshore Banking
Belize has developed a small but growing community of offshore (or international banks as they like to be called.) banks. These offshore banks were authorized by the Banks and Financial Institutions Act, 1995, and the introduction of the Offshore Banking Act, 1996, and the Money Laundering (Prevention) Act, 1996. By law they cannot serve customers who are citizens of or legal residents of Belize. The 1995 legislation defines an offshore banking as “receiving, borrowing or taking up foreign money exclusively from non-residents at interest or otherwise on current account, savings account, term deposit or other similar account and which according and subject to arrangement is repayable on the check, draft, order, authority or similar instrument of the customer, and investing the foreign money so received by lending, giving credit or otherwise exclusively to non-residents; or carrying on exclusively with non-residents such other activities as are customarily related or ancillary to offshore banking.
