Dateline: Kuala Lumpur, Malaysia
An increasing number of people around the world have turned to offshore banking as a legal way to diversify and protect their assets while enhancing their ability to invest in foreign markets.
The world of offshore banking, however, has changed dramatically in the past few decades, and compliance standards have increased dramatically since the days of secretive Swiss bank accounts. With new laws and regulations like FATCA, the Common Reporting Standard, and FBAR, it’s more important than ever that your offshore strategy is transparent and legitimate.
As a result, navigating traditional offshore banking hubs like Belize can be difficult at times. Although it’s one of the best-known offshore banking jurisdictions in North America, you’ll still encounter problems that are common among what I call classic offshore banking jurisdictions.
While Belize might not be the best or the biggest offshore banking jurisdiction, it’s relatively easy to bank there. In fact, you can even open an account remotely if you so choose.
And while banks in Belize don’t always have the best reputations, many of them are stable and regulated. Four types of financial institutions exist in Belize, each one offering a different range of options. This means you have a pretty good chance of finding the right bank for you.
However, Belize isn’t always the best place to bank offshore. Opening a remote bank account requires lots of patience and paperwork, and as a classic offshore banking jurisdiction, banks in Belize often fall under greater scrutiny than banks in other jurisdictions.
This article will therefore help you learn more about offshore banking in Belize by discussing how to open an offshore bank account in Belize, the best banks in Belize, and whether banking in Belize is a good choice for you.
Who Can Open an Offshore Bank Account in Belize?
For the most part, Belize is open to everyone.
Because Belize isn’t exactly a prestigious offshore banking jurisdiction, basically any individual or any company can open a bank account there, including US citizens. Banking minimums there are also quite low, so unlike more exclusive jurisdictions, you don’t need a lot of money to bank there.
Benefits of Banking in Belize
While Belize isn’t the best banking jurisdiction in the world, it can be a good option for individuals looking to diversify their funds or even just put a bit of money back for retirement since it’s quite easy to maintain a bank account there,
Navigating a language barrier is difficult as-is, and it becomes even more of a hassle when trying to do business. Even in countries like Georgia, which are quite good for offshore banking, you’ll need to go to major branches of large banks to find fellow English speakers.
The official language in Belize, however, is actually English, which makes banking much easier, and your options for banking won’t be limited by a language barrier.
Liquidity and Loans
In Belize, all banks are required to have a 24% liquidity ratio, meaning that they hang on to at least a quarter of all deposits at all times.
In comparison, most US banks only have a 3-4% liquidity ratio. And in the face of the Coronavirus, the Federal Reserve actually reduced reserve requirement ratios to zero percent. Beginning March 26, 2020, all reserve requirements were eliminated for all depository institutions.
A bank’s liquidity ratio indicates whether it is apt to make a large number of loans, which can affect the bank’s solvency. Additionally, banks in Belize do not manufacture new money, which further enhances their financial security.
In addition to the country’s high liquidity ratios, there are other aspects that make Belize banks more stable than other offshore jurisdictions.
The country’s currency is pegged to the US dollar, which means that you won’t be dealing with any unexpected currency nosedives, and the country’s government is stable and democratic.
Issues like hyperinflation or a Cypriot-style money grab likely won’t arise in Belize, making it a relatively safe place to bank.
Because it’s not the most prestigious jurisdiction, Belize is a fairly easy place to open a bank account – even if you’re opening a corporate account.
Banks in Belize will allow offshore companies from basically anywhere to open up an account. If your offshore structure isn’t conducive to banking in better jurisdictions, then you can likely find a bank in Belize that will accept you.
While this can be a benefit to some extent, it also means that Belize isn’t exactly the best option for everyone.
When it comes to a corporate structure, Belize should actually be seen as a last resort for this reason.
How To Open an Offshore Bank Account in Belize Remotely
Another benefit of banking in Belize is that it’s one of the better places to open an offshore bank account remotely.
Personally, I’m not a huge fan of opening offshore bank accounts remotely. I think it’s unnecessarily tedious, and I also believe that nothing can truly replace meeting bank representatives in person and having them feel comfortable with you in their branch.
That being said, Belize is one of the better places in the world to open a remote bank account. Because they’re used to dealing with foreigners opening accounts remotely, the process is a bit more established here than in other parts of the world.
The first step to opening an account from home is gathering your documents, which can include everything from personal and business references from people that you have known for at least two years to utility bills or even apostilled copies of your birth certificate.
If you are opening a corporate account, then you must also include relevant documents about your company.
Each of these documents must first be emailed for approval. Once they are reviewed and approved, you then have to send the same documents by mail.
Once the bank has adequately reviewed the documents that you provide and approved them, you may then wire money to the bank to open your account.
Should I Open an Offshore Bank Account in Belize Remotely?
As you can likely guess, this whole process can quickly become a headache, so it is actually easier to visit the bank once in person to open your account.
Going to the bank in person and sitting down to talk to someone means that you will not have to gather all of these documents in the first place. This can lead to a much easier process and fewer problems along the way.
With that being said, Belize is one of the few places left where you can still open up a bank account remotely. Other jurisdictions require potential customers to come in person.
If remote opening is an absolute must on the list of things you need from an offshore bank account, then Belize probably is the best way to go. However, it can be a slow process, so you should be prepared to wait for a long period of time while the bank processes your documents.
The Best Offshore Banks in Belize
Because Belize isn’t exactly the most prestigious offshore jurisdiction, it’s particularly important that you choose a high-quality bank there.
There are several types of banks in Belize: local banks, credit unions, Offshore Class A banks, and Offshore Class B banks.
However, when it comes to offshore banking, the most common type of banks are Class A banks. These types of banks only deal with nonresidents and foreign currency, making them the best option for those outside of Belize wanting to open an account.
Additionally, if you are using a Class A bank and decide to move to Belize, you will still be able to keep use of your accounts, but there might be some slight changes when it comes to how to use the bank.
The top three nonresident banking options are all Offshore Class A banks. However, if you want to live in Belize, local banks may be of more interest to you.
If you decide to open an offshore bank account in Belize, then you should likely choose from the following three options.
Caye International Bank
Caye International is considered the most diverse bank in Belize since it has the best options for investment accounts. The bank even offers gold storage and leverage programs to its customers.
In fact, Caye International Bank is considered one of the best investment banks in the world, and its compliance with US regulations makes it a safe bet even for US citizens.
However, despite this bank’s mostly positive reputation, it has started charging US persons a fee to open an account with them. In addition, their online wiring system is outdated, which means that online transfers can take days to process.
Caye International Bank is therefore only a good option if you’re looking primarily for an investment account. If you need to make more than a handful of transactions per month, however, then this bank might not be your best bet.
Atlantic International Bank
Atlantic International Bank is a great bank for those who consider themselves to be Do It Yourself investors.
The staff is well-trained on any issues that can arise from international accounts, including FATCA and similar regulations, and its online wire transfer system works better than other banks in Belize.
However, this bank has more thorough due diligence procedures than the other banks on this list. For example, even if you’re opening an account in person, you will need to have a reference from a bank that you have been using for at least two years.
In addition to those more stringent requirements, all investment advice that you receive from the bank must be given in person, leaving remote banking users in the lurch on that front.
Overall, Atlantic International Bank certainly has a good reputation for being compliant and high-quality, but it has high standards without having much in the way of unique investment opportunities or diversification options.
Belize Bank is one of the largest banks in the country. It has more individual branches than any other bank in Belize, and it’s also the best one for online banking.
In general, I mostly recommend this bank to people who actually live in Belize – even if only part-time. Belize Bank’s services are mostly focused on residents, and non-residents may even find it difficult to open an account here. Additionally, investment banking options are few and far between at Belize Bank.
Therefore, while this bank may be a convenient option for online banking if you live in Belize, it’s not the best choice for non-residents.
Potential Challenges with an Offshore Bank Account in Belize
Although there are a number of benefits to banking in Belize, this jurisdiction can be challenging to bank in at times. The following are a few common issues that people often encounter when they open an offshore bank account in Belize.
Lack of Services for High-Value Customers
Put simply, if you make six or seven figures, then there are better options out there for offshore banking.
This isn’t to say that Belize banks are lesser than, but any company or individual who has a six or seven figure income would probably benefit more from a different offshore banking option.
A lot of wealthy people want to diversify their money, which is never a bad idea in my opinion, but diversification goes beyond just squirreling your money away in various countries. You want to hold various currencies, assets like gold or silver, and investment accounts.
Unfortunately, many banks in Belize do not offer these options, and if they do, the scope of those options is likely limited. Therefore, if you’re looking for the kinds of banking services that you’ll find in a place such as Singapore, you’ll be fairly disappointed by Belize.
In recent years, the US and other international organizations have made an effort to crack down on tax evasion, money laundering, and other illicit activities in the global financial system.
These efforts, which have become known as “de-risking,” have damaged classic offshore jurisdictions like Belize. Thanks to the country’s proximity to the US and reputation as an offshore banking hub, Belize was heavily targeted in many de-risking activities.
Although Belize is stable for the most part, its economy is still developing and is thus quite fragile, so when US officials targeted banks in Belize, they didn’t hold up well. Anyone who had a bank account at one of the international banks could not send or receive money during this time.
In addition, local citizens, residents, and businesses owners also suffered because they could not send or receive money from anywhere outside of Belize.
Just as people had their accounts frozen during US de-risking efforts, some even had their accounts closed and were paid out in local currency, which they couldn’t use as non-residents.
While this issue has also subsided as Belize banks have gotten their houses in order, the threat of account closures in Belize is still very real.
Finally, these de-risking efforts have also created fear that the US might choose to cut off merchant account processing, which would mean that nowhere in Belize could a credit card be processed.
St. Kitts saw something similar happen just a year before the fiasco in Belize, and people were forced to carry around cash to pay for everything. No credit cards could be processed, and ATMs were completely shut down.
Many people fear being frozen out of their accounts if something like this happens again. While the worst is likely over for Belize, there’s always a chance that US de-risking efforts could destabilize banks in Belize yet again.
Is Banking In Belize Right For Me?
Despite these major drawbacks, you’ll often see Belize listed as one f the best places for offshore banking around the internet. But why?
This could be for a handful of reasons. While Belize certainly isn’t the greatest option, it’s a lot more accessible from the US than other countries, and the fact that bank officials will speak English makes banks in Belize a bit easier to use than in other countries.
However, part of the reason why Belize is mentioned so frequently is because a number of bloggers have a vested interest in promoting it.
Therefore, to make an informed decision about where to open an offshore bank account, you need to tune out the hype and focus on what bank and what jurisdiction actually meets your needs.
For the most part, I don’t recommend using Belize for offshore banking.
The fact is that there are simply better places to bank than Belize. Whether you want the prestige and stability of a place like Hong Kong or Singapore or interesting CD options in Armenia or Georgia, you’ll likely find more of what you need somewhere else.
That being said, there are a handful of circumstances that could warrant opening a bank account in Belize. If your offshore structure is outdated and based in a place like Mauritius, for instance, then you may need to open a bank account there in order to store your money.
If you need help deciding whether opening an offshore bank account in Belize is right for you, feel free to apply for a strategy call.