International banking is a topic that many people have heard of but don’t necessarily know well. They’ve heard things and likely seen the concept of offshore accounts used as a device in a movie plot. That’s led to quite a bit of misinformation about international banking in general.
If you’re interested in the idea and would like to know more about how international or offshore banking in Belize works, here are answers to some of the most frequently asked questions.
Is It Still Legal to Open Offshore Accounts?
Individuals and business entities can legally open accounts with international banks. This is true for business owners who want to open accounts at commercial banks in Belize as well as individuals who want to open offshore checking and savings accounts. Both individuals and businesses may open investment accounts with international and offshore banks.
The key is compliance. Opening any type of offshore financial account requires complying with applicable rules and regulations set by your home country. You also must meet the qualifications and remain in compliance with the banking regulations in Belize or any other nation where you choose to establish accounts.
What’s the Benefit of International Banking?
Some people immediately associate international banking with hiding assets or avoiding legitimate tax obligations. While it’s true that this these types of activities have occurred, current banking laws in Belize and other nations makes them increasingly difficult. At the same time, updates to regulations and banking laws provide a number of benefits to opening and maintaining international accounts.
Individuals have the benefit of depositing funds into accounts that may provide a higher interest rate than their domestic counterparts. This is true with time deposit accounts in Belize as well as some other types of accounts. It’s possible to set up a basic checking or savings account, then have the interest earned on a time deposit transferred to that account on a quarterly, monthly, or annual basis. The interest income can also remain in the time deposit account. Think of it as a low-risk way to accumulate resources for the retirement years.
Company owners can set up organizational structures that allow them to take advantage of favorable banking and tax laws that apply within the host country. This approach is simply a smart way to maximize the use of company resources and avoid waste. International accounts with a commercial bank in Belize also position the company to make investments that would not be possible using a domestic bank.
How Stable is the Economy and Government in Belize?
Economic and political factors do have an impact on the stability of banking within any nation. In the case of Belize, the economy, as well as the democratic government, is stable. There are no indications that this will change any time soon.
It’s the economic and political stability of the country that attracts individuals and company owners to open accounts in Belize. Even if there’s unrest at home, the impact on the assets held in Belize accounts is usually minimal at best.
How Safe are Belize Banks?
Banking laws and regulations in Belize are designed to ensure the banks operating within the country keep depositor accounts safe. All financial institutions with a presence in the nation must comply with the qualifications set by the Central Bank of Belize. Many of those qualifications set the standards used to protect the funds held in all types of bank accounts.
The banking system has much in common with other nations that are sometimes held up as the standard for safety. You’ll find much in Belize’s system that mirrors what’s found in the systems used in Canada, the United States, and the United Kingdom.
Is It Difficult to Open Bank Accounts in Belize?
The process for opening bank accounts in Belize is not difficult, but it is detailed. This is true for businesses as well as individual accounts. Along with meeting requirements that apply to specific types of accounts, there are documents and important information that must be supplied before a bank in Belize will consider an application.
The good news is that you can initiate the application process online. You do not have to be physically in Belize to open any type of individual or business account.
Be prepared to provide copies of documents that establish your identity. That includes a passport. You also need proof of your permanent residence and a letter of reference from your domestic bank. There’s no specific format for that reference letter, but it should identify you as a depositor and provide some basic details about how long you’ve been a customer of that institution. Depending on the type of account you’re seeking to open, there may also be the need to supply personal references.
Some banks will accept electronic copies of your documents and begin the evaluation process pending the receipt of paper copies. The final decision is made once the hard copies are received by courier or by post and reviewed by bank officials.
How Much Must I Deposit to Open an Offshore Account in Belize?
Some account types require minimum initial balances while others allow individuals to open accounts using just about any figure. The only way to know how much you will need to deposit initially is to interact with a banking official. Keep in mind that many accounts pay a higher rate of interest if you maintain a higher balance.
Many people are surprised that they don’t have to be millionaires to open accounts in Belize. Several banks offer accounts that are geared toward those who are considered to be in the middle-income range. That’s especially attractive for people who want to build wealth using those accounts and are thinking of eventually retiring to Belize.
How Can I Manage My Accounts?
Online access is common with most individual and business accounts offered by Belize banks. There is also the option of placing a call to the bank during standard business hours. In both instances, you will need to use credentials that confirm your identity.
While online access is available around the clock, remember that banking hours in Belize are somewhat different from other countries. Even so, the time of day is not likely to be an obstacle. Belize is located in the Central Time Zone. If you live in Chicago, your local time coincides with the time of day in Belize.
Who Has Access to Information About My Accounts?
Information about your international accounts is held in the strictest confidence. You have access as well as any other person that you add to the account. Domestic tax agencies have limited access based on the laws in Belize.
Keep in mind that you’re responsible for reporting any interest or investment income in accordance with the tax laws in your home country. That information should match any information that Belize has currently agreed to supply to those agencies.
Remember that the best strategy for opening international banking accounts is to talk with financial experts in Belize and provide an idea of what you want to accomplish. Doing so makes it easier to focus attention on the types of accounts that are most likely to help you meet your financial goals.
Luigi Wewege is the Senior Vice President, and Head of Private Banking of Belize based Caye International Bank, a FinTech School Instructor and the published author of The Digital Banking Revolution – now in its third edition.
You can follow his posts on trends shaping the banking and financial services industry on Twitter: @luigiwewege