Your Money and How to Hold On to It in Belize
By Lan Sluder
(Excerpted from Easy Belize! How to Live, Retire Work or Invest in English-Speaking Belize, the Frost-Free Paradise on the Caribbean Coast, available in paperback from Amazon.com or as a Kindle or Nook eBook.)
Belize’s official currency is the Belize dollar, which for many years has been pegged to the U.S. dollar at a rate of 2 Belize dollars to 1 U.S. dollar. However, moneychangers often give a slightly higher rate than 2 Belize for 1 U.S. dollar, sometimes as much as 2.2 to 1, or even higher, depending on the local demand for American greenbacks.
That brings us to a key fact about Belize and your money: Hard currencies, like the U.S. dollar, euro and yen, are good. Soft currencies, and the Belize dollar is one of them, are not so good. The Belize dollar is difficult to exchange anywhere outside of Belize (except at border areas of Guatemala and Mexico).
For years there has been talk of dollarizing the Belize economy, making the U.S. dollar the official currency of Belize, similar to what El Salvador and Ecuador and, to a degree, Guatemala have done, but so far that talk hasn’t translated into action. There are several possible reasons. For one, the Belize government is reluctant to do away with its Central Bank and surrender so much of its financial control to Uncle Sam. That’s understandable. For another, Belize politicians may think that in a tough economic pinch it’s a lot easier to just print money than to actually earn it. That’s also understandable.
Technically, according to Belize law, only the Central Bank of Belize is permitted to deal in foreign currencies including the U.S. dollar. But this rule is widely, almost universally, flaunted in Belize, and businesses routinely take U.S. dollars in payment for goods and services and have been doing so for decades. In any event, U.S. dollars (bills, not coins) are accepted everywhere in Belize, although you often will receive change in Belizean money, or in a mix of Belizean and U.S. money.
Paper-money Belize denominations are the 100-, 50-, 20-, 10-, 5- and 2-dollar bills. Belize coins come in 1-dollar, 50, 25, 10, 5 and 1 Belizean cent units. The 25-cent piece is called a shilling.
Currency Exchange Regulations
The U.S. Embassy in Belize provides this summary of currency regulations in Belize:
Under the Exchange Control Regulations (Chapter 43 of the Laws of Belize - 1980), only the Central Bank of Belize and authorized dealers/depositories (i.e., commercial banks and Casas de Cambio, if permitted) may deal in foreign currencies. In order to pay for goods and services procured outside of Belize in a foreign currency, a foreign exchange permit must be obtained from an authorized dealer or directly from the Central Bank of Belize. The permission of the Central Bank of Belize is also required to secure a loan from outside Belize that involves a foreign currency, and also to service repayment of foreign debt. According to the Belize Investment Guide, “the necessary approvals can be easily secured in the case of genuine, approved enterprises.” Foreign investors are required to register any investments made in Belize with the Central Bank in order to facilitate the repatriation of profits, dividends, etc. Officially, no person, other than authorized dealers and authorized depositories, may retain any foreign currency in their possession without the consent of the Central Bank of Belize. In practice, however, many local businesses accept payment in U.S. currency.
Foreign exchange controls can be summarized by the following rules and guidelines: Residents and non-residents need permission to buy foreign currency for whatever purpose; Authorized dealers (i.e., commercial banks) are allowed to sell foreign currency up to US$2,500 for private travel and up to US$10,000 for business travel per calendar year; requests in excess of these amounts must be approved by the Central Bank of Belize; Exporters are required to register their exports with the Central Bank, guaranteeing delivery of their foreign exchange earnings; Authorized dealers may authorize payments for imports, where goods are paid for through letters of credit or bank collection. They may also authorize payments for imports against copies of invoices and customs entries, where the documents show that the goods were obtained on credit; Belizean residents, who wish to borrow abroad and where debt service will be in hard currencies, must apply to the Central Bank of Belize for permission to do so.
Banks and Banking in Belize
Belize has five commercial banks, not including offshore banks. Three are based in Belize – Alliance Bank, Belize Bank and Atlantic Bank — and two, First Caribbean Bank (formerly Barclays) and ScotiaBank, are large multinational banks with branches in Belize. The local banks are small, about the size of a small-town local bank or savings and loan in the U.S. Belize also has several credit unions and small mortgage lending institutions.
Here are the basic facts, including contact information for the main offices, about each bank in Belize:
Atlantic Bank was founded in 1971. It is majority owned by Sociedad Nacional de Inversiones, S.A., a Honduran company, along with some individual stockholders in Belize and Honduras. Atlantic Bank has 13 offices in Belize — in Corozal, the Corozal Free Zone, Belize City (three offices), International Airport, Belmopan, Ladyville, Caye Caulker, Orange Walk, San Pedro, Placencia and San Ignacio. Main office: Atlantic Building, Freetown Road; tel. 501-223-4123, fax 223-3907; www.atlabank.com.
Belize Bank traces its history back to 1902 when it was founded as the Bank of British Honduras. It is owned by BB Holdings, shares of which trade on the Alternative Investment Market of the London Stock Exchange in the United Kingdom under the symbol BBHL. Lord Michael Ashcroft, a British billionaire and Conservative party officer who holds dual citizenship in the UK and Belize, is chairman and a large stockholder in BB Holdings. Belize Bank bills itself as the largest commercial bank in Belize, with assets if around US$440 million, and around 40% share of loans and deposits in Belize. It has 12 offices around the country — in Corozal, the Corozal Free Zone, Orange Walk, International Airport, Belize City (two offices), Belmopan, San Ignacio, San Pedro, Dangriga and Punta Gorda. Main office: 60 Market Square, Belize City; tel. 501-227-7132, fax 227-2712; www.belizebank.com. Belize Bank also has an international banking division, Belize Caribbean International Bank.
First Caribbean International Bank (formerly Barclays) was formed in 2003 by the merger of the Caribbean operations of Barclays, the giant U.K-based financial service firm, and those of another large bank, Canadian Imperial Bank of Commerce (CIBC). Operations in 17 Caribbean countries including Belize were rebranded as First Caribbean International Bank. First Caribbean has assets of around US$11 billion. In Belize, First Caribbean has five offices, in Belmopan, Belize City (two), San Pedro and Dangriga. Main office in Belize: Albert Street, Belize City; tel. 501-227-7211, fax 227-8572; www.firstcaribbean.com.
Heritage Bank (formerly Alliance Bank) is the newest of the commercial banks in Belize. It has eight offices -- in Belize City, Belmopan, Caye Caulker, San Pedro, Orange Walk, San Ignacio, Independence and Pomona (near Dangriga). It formerly was associated with Glenn D. Godfrey, a well-connected Belizean businessman and attorney. In 2009, Alliance Bank reportedly was sold to a group of mostly foreign investors from Mexico and the Caribbean. Main Office: 106 Princess Margaret Drive, Belize City; tel.: 501-223-6783, fax 223-6785. www.heritageibt.com
ScotiaBank, formerly Bank of Nova Scotia, is a large Canadian bank with operations in 50 countries and with worldwide assets of more than US$500 billion. In Belize, it has 13 offices -- in Corozal Town, San Pedro, Orange Walk, Belize City (two offices), Belmopan, Spanish Lookout, Placencia, Punta Gorda and Dangriga. Main Belize office: Albert Street, Belize City, tel. 501-227-7027, fax 227-7416; www.scotiabank.com.
In addition to commercial banks in Belize serving local customers, Belize has developed a small but growing community of offshore banks (or international banks as they like to be called.) 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.
These banks are regulated by the Belize Central Bank, have physical offices in Belize and offer various services including international bankcards and demand, savings and time deposit accounts. Accounts maintained with these banks are not subject to local taxes or exchange control restrictions and may be denominated in any major currency, including U.S. dollars, euros and others. International banks tout their privacy for their customers, although if the Belize courts find that funds in the banks are proceeds of crime the banks are required to release the identity of the account owner. Funds are transferred into and out of Belize in foreign currencies with no conversion to Belize dollars taking place.
These banks are prohibited from doing business with Belize citizens or legal residents. The offshore banks also comply with UN sanctions and don’t accept deposits from citizens of Iran, North Korea, Somalia, Sudan, Ivory Coast and several other countries. Most customers of international banks first establish an International Business Company (IBC). Here’s information on some of the larger offshore banks in Belize:
Atlantic International Bank: This international bank offers demand deposit accounts and savings accounts at various interest rates depending on amount and term; corporate accounts; credit cards and investment/brokerage accounts. Other services include offshore trust services and establishing International Business Companies (IBCs). Withfield Tower, 2nd Floor, 4792 Coney Drive, P.O. Box 1811,
Belize City; tel. 501-223-3152, fax 223-3528; www.atlanticibl.com. This bank is no longer associated with Atlantic Bank.
Belize Caribbean Bank International Limited: British Caribbean Bank International Limited is a subsidiary of BCB Holdings Limited. A licensed was granted in 2006 to provide international banking services to an international clientele. British Caribbean Bank International Limited provides a full range of offshore banking services such as:
o Euro, US Dollar, Sterling & Pounds - Foreign Currency Personal & Corporate Bank Accounts
o Visa/MasterCard International Credit, Debit & Prepaid Cards
o Online Securities Brokerage Services
o Credit Facilities
o Online Banking
o Online Merchant Acquiring Services
The minimum balance required to maintain an offshore bank account is US$1,000. Offshore bank accounts enable clients to manage their finances wherever they are in the world. These accounts are tax-free and are not subject to currency controls. Accounts are available to both personal and corporate clients in US dollars, Canadian dollars, pounds and euros. British Caribbean Bank International Limited also offers certificates of deposits and a minimum of US$25,000 in the currency. For more information visit www.bcbankinternational.com or the main office at #21 Regent Street, 4th Floor, Belize City; tel: 501-227-0697/227-1548, fax: 501-227-0983
Caye International Bank: Opened in 2003, Caye Bank is located in San Pedro. Currently, the bank offers a mix of deposit and loan services to non-residents of Belize, including demand (checking) deposits (minimum US$5,000) currently paying 0.5% to 1.25%, savings deposits (minimim US$5,000) paying .75% to 3%, and CDs (minimum deposit US$25,000, rates subject to negotiation. Main office: Coconut Drive, San Pedro; tel. 501-226-2388, fax 226-2892, www.cayebank.bz.
Heritage International Bank (formerly Provident Bank and Trust): This international bank is associated with the similarly named domestic bank. Demand deposits may be opened with a minimum of U$3,000, savings accounts with US$500, premium savings accounts with US$5,000 and time deposits with a minimum of US$25,000. The bank also offers on-line banking, credit cards and other services. Main office: 35 Barrack Road, Belize City; tel. 501-223-5698, fax 223-0368; www.heritageibt.com
Belize Banking Differences
Most expats find that banking is a little different in Belize. In most cases, you can’t just sashay in to your local bank office and open an account. You usually will be asked for references, including a letter from your former bank. There is no standard format for this reference letter, but it should state something along these lines: “Mr. Jones is currently a customer of our bank and has maintained a satisfactory banking relationship here since 1985. His savings, time and demand deposit accounts with us current total about US$xxx,xxx.” The letter should be on the institution’s letterhead and signed by an officer.
Commercial banks in some cases may also require that you have some reason before you can open a banking account in Belize, such as owning property, building a house, living in in Belize part- or full-time, etc. The offshore banks in Belize are just the opposite – you can’t be a citizen or resident and bank of Belize.
All of which brings us to another key fact about your money and Belize: Keep the bulk of your liquid assets out of Belize. You will probably want to open a checking account in Belize to have easy access to spending money and for handling routine local transactions, such as paying your Belize telephone or electric bill. And if you are in Belize under the Qualified Retired Persons Incentive Program, you are required to deposit US$24,000 a year in a Belize bank. But the savvy expat will maintain a banking relationship in the U.S. or similar country, with the bulk of your demand and deposit cash accounts there. You can then transfer funds by wire or other means to your account in Belize, as needed.
CAUTION: Deposits in Belize banks are not protected by deposit insurance, as they are in the U.S. and in many other countries. All of your deposits are at risk should the bank fail.
Belize Bank has 12 ATMs around Belize that accept foreign-issued ATM cards on the Visa, MasterCard, Plus, Cirrus and Visa Electron systems. Atlantic Bank has 16 ATMs that accept foreign-issued ATM cards on the Visa, MasterCard, Plus and Cirrus systems. ScotiaBank has 14 ATMs around the country accepting foreign-issued ATM Cards. First Caribbean Bank’s six ATMs also accept foreign ATM cards.
You can use these ATMs to tap your bank accounts back home, although you will get cash in Belize in Belize dollars. Alliance Bank (the name is expected to change soon) has ATMs but at present do not accept ATM cards issued outside Belize.
Banking hours are shorter in Belize, typically only until 2 p.m. most days, and in other cases banks close for lunch. Most bank offices have modern conveniences such as ATM machines. While bank personnel in Belize are usually very friendly – this is Belize, after all – you can’t always say the same about bank policies, especially for loans. Loan interest rates are high. Even as the U.S. prime rate was down to 4%, Belize banks were getting 10% to 18% or more on business loans and even higher on some personal loans. And the hidden fees and charges can add several percentage points to the loan interest. Modern consumer protection laws haven’t all made it to Belize yet.
Savings earn higher interest in Belize than in the U.S. or Canada, although in 2011-2012 rates declined significantly.
Copyright 1999-2012 by Lan Sluder. All rights reserved.