Monthly Archives: March 2011

5 Reasons Why You Would Want to Get a Belize IBC Account?

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In my blog post recently on “Expat Information on Belize Bank and Regulations,” I discussed in detail how Belize IBC’s work.  One of my loyal readers then commented and asked me “Why would you get an IBC account?”  I thought this is an excellent question, and more than likely many of you may be wondering the same thing.  So here are some reasons why:

1.  More than likely, most expats would not want to convert all of their U.S. dollars to Belize dollars.  Once you convert to Belize dollars, it is highly unlikely, if not impossible, to get the conversion reversed if you ever wanted to due to the Central Bank of Belize regulations.  So leaving your money in U.S. currency is smart.

2.  IBC’s (International Business Corporations) leave your money in U.S. currency.  The upside is that you can easily transfer online from your IBC to your local Belize Bank account.  The same cannot be said for getting money from a U.S. bank account to your local Belize Bank account.  You would have to either wire transfer the money, which is $75 a pop(!!!), or you could send a money order made payable to yourself, but the bank would have to put a hold on it until the Central Bank could clear it, which could take anywhere from 3-6 weeks.  You see, Belize is quite strict about making sure that no ilicit money (drugs, money laundering, etc.) is entering their country, hence the strict rules.

3.  My reader thought he could use his U.S. bank debit card to make purchases while living in Belize, and he can.  However, every time you make a transaction (cash withdrawal and/or purchase), you will have to pay a 2-3% transaction fee to your U.S. bank.  Also, keep in mind, you can only withdraw up to $250 a day at a Belize ATM.  ATM’s are honestly scarce (there’s only two in all of San Ignacio/Santa Elena – next closest is 25 miles away), and at times, unreliable.

4.  Certainly my reader’s logic about keeping their money in a U.S. account because it’s insured and Belize banks are not is quite valid.  However, keep in mind that there has never been a Belize bank failure since the Central Bank was created in 1976.  This is because they are quite strict with their underwriting rules, and they give out loans the old fashioned way (high down pament, very credit worthy individuals, etc.).  Also, property here does not have wild appreciation swings, so loan failures in Belize are quite low.

5.  Lastly, Belize IBC’s are used for many different purposes, from tax exemption, capital gain exemption and asset protection – something no U.S. Bank can provide.

Can you see now why having an IBC in your portfolio might make sense?

Expat Information on Belize Bank Rules and Regulations

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This blog has helpful expat information for any of you considering moving to Belize and getting a bank account.  The bank I am referring to in this post is Belize Bank since I have the most knowledge about it, however, I’m sure the other banks operate in a similar fashion, if not the same, due to the regulations of the Central Bank of Belize.

Local Belize Bank (Belize Dollars) Accounts:

  • No use for 6 months you will be charged $11 bze fee/mo.
  • No charge to deposit or withdraw money.
  • If you have a Bonus Savings Account, 6% interest accrues monthly on all balances – payable April and October.  Since you can get checks with this account, I’m not sure why you would have any other type of account with that kind of interest.
  • Can order checks for $20 bze.
  • You can get a debit card that can be used to make purchases all over the country fee free!  You can also withdraw up to a maximum of $500 bze a day at any ATM.
  • Online banking and bill pay is available.
  • You can transfer money between local bank accounts.
  • Checks drawn on a local Belize Bank account cannot be cashed in the U.S. per Central Bank regulations.  You will need to either buy a US draft ($10 USD) or send a wire transfer ($75 USD) from your IBC account (see below).
  • If you open an account at one branch and then move to another area and and want to begin using that branch for your transactions, they will need to verify your signature with the opening branch every time (which is very time consuming).  To avoid that, you can transfer your local account to the new branch.  You will need to request them to close your original account and open a new one.

IBC (International Business Companies) (US Dollars) Accounts:

  • Can come to the bank to deposit money for free.
  • Can only withdraw $2500 US or less no charge.
  • Above $2500 US 2% fee on overage.
  • Maximum withdrawal is $10,000 US.
  • You cannot withdraw money from an ATM.
  • Debit card is US so 2% conversion fee on any Belize purchases.
  • Can’t use debit card for online purchases.
  • Debit card ok for online bill pay.
  • You can get a credit card but they will set aside 1.5 times the credit card limit until such time as you cancel the card.  For instance, if you request a credit card with a $1000 limit, they will set aside $1500.
  • Online IBC account is for:  International Transfers, Transfer International to Local account, or view Account Balances ONLY.
  • IBC accounts cannot be transferred to a new branch.  Those accounts are all handled at the headoffice in Belize City.

Hopefully this overview has helped you understand what you will need to prepare for when dealing with the Belize banking system.  Did you know there were so many regulations?

3 Reasons Why Nothing is Simple in Belize

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In my last post about the Qualified Retirement Program (QRP) available here in Belize for potential residents, I received an e-mail from a reader asking why I hired an attorney to help me with the process.  She stated “isn’t it a simple matter of going to Belmopan (the country’s capital) and filing the paperwork?”

It got me to thinking that a lot of folks who come from sophisticated countries such as the United States or Canada really can’t comprehend that the word “Simple” is very rarely applicable when you live in Belize.  There are 3 reasons why:

1.  They are technically a third world country.  It has a very  high rate of poverty, a very high rate of unemployment, and it seems to be very behind the times in terms of capitalism and a desire for economic growth.   They also don’t appear to have aligned themselves with any other advanced countries.  This seems to be intentional since they fought so hard not to be under British rule (Belize used to be British Honduras until 1964 when they became Belize and became self-governing).

2.  They have no formal government computer systems.  I cannot tell you how many times I have been amazed at how things are handled here due to the lack of a central computer system for any of their government agencies.

Even the major banks seem to be rooted in the old-fashioned paper methods of doing business.  When I went to pick up my debit card they logged my name, card number and date of pick up in a journal entry book.  Also, I opened my account at a branch in San Pedro, but now whenever I go to the San Ignacio branch to make a transaction, they have to verify my signature with San Pedro, a time draining and mind numbing process – the branches seem to operate separate and not as one large entity.

Recently the Belmopan police department had a fire.  Many, many police records were permanently destroyed.  One gentleman was bragging to his friends that even though prior to the fire he had two convictions, now he has a clean record!  Can you imagine?

3.  In fact, Belize is quite satisfied living the simple life, and they rather embrace that concept.  People here are so laid back and relaxed about almost everything that at times you wonder if they shouldn’t be the world-wide poster child for how to live stress free!  Most live in simple homes with no hot water, outdoor kitchens, chickens roaming their yard, six or seven people jammed into a 400 s.f. house with no sofa to lie on and one shower to share.  They walk to and from work, school, the market and most other errands because they don’t have a car.  Getting upset because the line at the bank is long seems ridiculous compared to what these folks must face in their day to day lives.

So, if you plan on moving to Belize, just remember to try to go with the flow, and above all, be patient.  Everything will happen in good time, but knowing someone who can navigate the system and help you make it happen with minimal frustration just may be worth the extra money to you, don’t you agree?