The world of international banking has undergone significant changes during the last 30 years. Switzerland is no longer the banking haven of choice for North Americans. It is now difficult to open a bank account in most European havens, especially for Americans. When a bank account is allowed, a significant deposit is required.
These days international travel is accessible to the masses. And the increasing speed and access of the worldwide internet allows one to establish and manage a business from anywhere in the world. These trends have resulted in the growth of international banking.
Belize is a now the leading Central American international jurisdiction in Central America. Even Panama recently (2011) knuckled under to pressure from the USA to divulge private information of Americans with bank accounts in Panama. It isn’t surprising that an increasing number of expats and visitors are moving a portion of their savings to Belize’s international banks, which are still private and secure.
In the mid 1990's, Belize structured their offshore banking laws to attract foreigners. At the very time when the American banking systems experienced an alarming number of bank failures, Belize maintained a stable and growing banking system. With 24% liquidity required by the government, Belize’s banks are arguably the safest you will find in this day and age. A person can open an offshore account with $1,000, often less.
Belize’s local commercial banks deal only in Belize dollar transactions. But, in addition to serving local customers, Belize has attracted a small but growing community of offshore (international) banks. These international 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, Belize’s offshore banks cannot serve customers who are citizens or legal residents of Belize. They were designed to cater to foreigners. The 1995 legislation defines an international bank 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 international banking.”
There are two categories of Belize offshore banks: “A” Class - Unrestricted and “B” Class - Restricted.
The holder of an “A” Class offshore banking license needs to establish, maintain, and operate a business office in Belize. It is permitted to transact offshore banking business through its business office in Belize without restrictions on that business. Annual license fee: US$20,000. Authorized and paid up capital of at least US$3 million must be maintained if the license is for a local company, or US$25 million in the case of a foreign bank.
A holder of a “B” Class offshore banking license also needs to establish, maintain, and operate a business office in Belize, but it is limited to transacting only such offshore banking business as is specified in its license. “B” Class offshore banks cannot solicit or accept deposits from the general public, and cannot provide any current deposits or checking accounts to depositors. Annual license fee: US$15,000. Authorized and paid up capital of not less than US $1,000,000 must be maintained if the license is for a local company, or US $15,000,000 in the case of a foreign bank.
Several offshore Class A banks operate in Belize. These banks are regulated by the Belize Central Bank, have physical offices in Belize and offer various services that include: international bankcards and demand, savings and time deposit accounts. Accounts maintained with these banks are not subject to local taxes or exchange control restrictions.
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.
Belize officially promotes the establishment of offshore asset protection trusts. The country allows unrestricted inflow and outflow of capital. The Belize Trust Act was enacted in 1992. Since that time its asset protection business has slowly and steadily grown.
The Belize Trust Act is a comprehensive and well conceived act. Section 6 provides that "the Court shall not vary [a trust settled under Belize law]...or set it aside or recognize the validity of any claim against the trust property pursuant to the law of another jurisdiction or the order of a court of another jurisdiction...over claims of creditors in insolvency."
Belize is an excellent jurisdiction for the settlement of an asset protection trust. The fees are moderate, communication excellent, and the jurisdiction has not been sullied.