Banking in Belize

“Belize is a custom-made banking haven,” explained longtime friend (and Belize banker) Peter Zipper to the group convened in the meeting rooms of the Sheraton Hotel in downtown Panama City last week.

“With their Belize Act in 1981, the Brits built themselves a banking haven. They looked around at the top banking havens worldwide at the time and cherry-picked the best elements of the banking laws in each case. These elements were incorporated into the banking law for the about-to-become independent nation to be known as Belize.

“Until that point, Belize had been British Honduras, a colony of the Crown.

“The constitution for this new country was based on the Canadian constitution. What does this mean?” Peter asked the crowd.

“That means boring. Boring politics, boring everything. Not much to rock anybody’s boat.

“As a result, in the nearly three decades since, Belize has managed to remain largely under the radar. Ambergris Caye drew some attention as the setting for TV’s ‘Temptation Island.’ Otherwise, other than from global divers and sun-seekers, Belize has been really successful at attracting very little attention.

“I spent many of the first 27 years of my 30-year banking career in Europe,” Peter continued, “working with Swiss banks, for example. We Swiss bankers back then would turn up our noses at the mention of ‘Belize banking.’ Bank in Belize? Who would give their money to a Belize banker, we wanted to know. Bankers in Belize can’t count, can they?

“Three years ago, I retired from the Euro-bank I’d been working for. Retirement’s not so much fun, I realized after about two days. When I thought about returning to work, I considered not the opportunities in Europe, but those on this side of the world, in the Americas.

“That’s looking like a smart move right now. In the 36 months since I moved from the banking industry in Europe to the one in Belize, the global banking industry has been turned on its head.

“Used to be, the mention of ‘banking’ brought places like Switzerland or Austria to mind. This paradigm has collapsed. There are dozens of ‘banking havens’ around the world. The truth is, though, that very few of them deserve the description right now. Belize is an exception. Belize is a true banking haven.

“Why? Two reasons.

“First, bank secrecy. Belize maintains it. Anyone in the Belize banking industry who violates the country’s bank secrecy laws goes to jail for a minimum of 18 months. Trust me. You don’t want to spend 18 months in a Belize jail.

“How has Belize managed to maintain its bank secrecy position while other better-known jurisdictions have all but abandoned the idea?

“That’s it, precisely. Belize is little-known. Remember, this country has kept its head down. No one pays it any attention, and Belize is keen to keep it that way.

“The second reason Belize stands out among the world’s bank havens right now is liquidity.

“Used to be, when I started talking about bank liquidity at a conference like this one, I’d notice people begin to nod off. Some would even head for the door. Nobody had any interest in the idea.

“I notice, though, today, you all seem wide awake. Thanks to recent events, bank liquidity has become a hot, sexy topic.

“Current liquidity among banks around the world is 1.2%. That’s the average worldwide. What’s the situation in Belize?

“Banks in this country maintain liquidity rates of 24%. This standard is mandated by the Belize government. A quarter out of every dollar in a Belize bank must be liquid. If a bank falls below this level of liquidity, the government can take the keys and close the bank.

“How did Belize bankers fare during the recent banking crisis? We sat back and smiled. We knew we didn’t have anything to worry about, and, in fact, not a single Belize bank has failed.

“Belize banks maintain an extraordinarily high standard of liquidity, and they lend only 50% loan-to-value for mortgages. That’s how Belize banks stay healthy.

“It’s not only banks in this country that are healthy right now. The Belize economy in general is doing very well. Growth rates over the last six years have averaged 6% a year. Inflation is 1.4%. An economist will tell you that this is the sweet spot, exactly where an economy wants to be. And Belize has been able to stay within this range for six years.

“Belize’s three main industries are finance (banking, trust companies, etc.), eco-tourism, and oil. Yes, oil, which has been discovered off the coast in volumes that appear to be as great as those off the coast of Texas. Drilling is under way…in a way so as to preserve the eco-system of the shore and the reef. No oil platforms out in the ocean.

“You can open a bank account at my bank in Belize with zero dollars. Why? Because we, like all Belize banks, are focused on attracting small- to medium-sized investors. We’re not going after mega-clients. Mega-clients attract attention. Remember, Belize is a low-key jurisdiction, happy to stay off the world’s radar.

“That’s not to say we’re ready to open an account for any shyster who comes along. The days of sewage banking are over. The banks that threw off a stench in places like Panama and Belize, are gone. No more numbered accounts. We need your name and your address (not a P.O. Box).

“And we’re going to ask you how you made the money you’re depositing. We need to know our clients. We need something to fill in the blank on the application form. This helps to protect fellow account-holders, as well as the bank.

“Remember, Belize speaks English. So your account manager is an English-speaker. And Belize is in Mountain Time. You don’t have to get up at Midnight to have a conversation with your banker.

“Americans and Canadians can open either a personal account or what’s called a structure account. This is the preferred option. It’s an account formed for you by someone else that’s not in your personal name but in the name of a structure–a trust, a company, or a foundation, for example.

“Once you’re offshore, you want to do as little in your own name as possible. Put everything possible in the name of a structure.

“You don’t have to come to Belize to open your account. In most jurisdictions, including Panama, you must appear in the bank in person to fill out the forms, sit through the interviews, and sign on the dotted line. Not so in Belize. You don’t ever have to step foot in the country if you don’t want to.

“But I’d suggest you come have a look. You’ll find yourself in familiar company. This is where the Baby Boomers are headed. They’re coming our way in growing numbers. Walk down the street on Ambergris Caye, and you hear the music the Boomers all around–the Beatles, the Rolling Stones, Janis Joplin…

“These folks had a great time in the 1960s…then they became the most boring people on the planet. They made a lot of money…and now they’re looking to reclaim their lives. They’re finding their way, in retirement, to places like Belize…where they’re listening to their music again…

“It’s also got the most appealing banking industry in the world right now.”