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Belize-Country detail


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Belize-Country detail

  1. 1. BELIZE Belize* INTRODUCTION General Capital/Other major cities: Belmopan/Belize City, Orange Walk, San Ignacio Area: 22,966 km2 Population: 294,385 Language: English Currency: Belizean dollar (BZD) Country telephone code: 501 National holidays (excl. weekends)** : 2nd half 2007 — Sep 10, 21, Oct 15, Nov 19, Dec 25, 26 2������ ������� ���������������� ������������������������������������008 — Jan 1, Mar 10, 21, 24, May 1, 24, Sep 10, 22, Oct 13, Nov 19, Dec 25, 26 Business hours: 08:00–12:00 13:00–17:00 (Mon–Thu) 08:00–12:00 13:00–16:30 (Fri) Banking hours: 08:00–15:00 (Mon–Thu) 08:00–16:30 (Fri) Stock exchange: Belize International Stock Exchange (BISE) ** Source: Government Legislature Parliamentary democracy with a bicameral National Assembly composed of the Senate and the House of Representatives. Senate – 12 members appointed by the governor general (six on the advice of the prime minister, three on the advice of the leader of the opposition, and one each on the advice of the Belize Council of Churches and Evangelical Association of Churches, the Belize Chamber of Commerce and Industry, the Belize Better Business Bureau, and the National Trade Union Congress and the Civil Society Steering Committee) for five-year terms. House of Representatives – 29 members are directly elected by popular vote for five- year terms. The next elections are scheduled for March 2008. Head of state Queen Elizabeth II since February 6, 1952. Represented by Governor General Sir Colville Young since November 17, 1993. Political leader Said Wilbert Musa, prime minister sinceAugust 28, 1998. Musa took over leadership of the PUP (People’s United Party) in 1996 and led the party to victory in elections in 1998 and 2003. Sectoral distribution of GDP (% of GDP) Agriculture 22.5% Industry 14.8% Services 62.6% (2006) ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ * Please note that rules, regulations and market practice are evolving. As a result, they may diverge from the formal regulatory framework described in this country profile and their interpretation may differ accordingly. If you are planning any business activity in the country, we would recommend that you seek independent advice on the latest market and regulatory developments as well as legal and tax advice.
  2. 2. CASH, TRADE TREASURY CENTRAL AMERICA BELIZE Economy 2001 2002 2003 2004 2005 2006 2007 Q2 Q3 Q4 YEAR Q1 Exchange rate* (BZD per USD)** 2.0000 2.0000 2.0000 2.0000 2.0000 2.0000 2.0000 2.0000 2.0000 2.0000 Interest rate (lending rate) % 15.45 14.83 14.35 13.94 14.26 14.20 14.20 14.21 14.21 NA Unemployment % 9.1 10.0 12.9 11.6 11.0 NA NA NA NA NA Consumer inflation*** % + 1.2 + 2.2 + 2.6 + 3.1 + 3.6 NA NA NA NA NA GDP volume growth*** % + 4.6 + 4.8 + 9.1 + 4.6 + 3.1 NA NA NA NA NA GDP BZD m 1,738 1,853 1,962 2,071 NA – – – NA – GDP USD m 869 927 981 1,036 NA – – – NA – GDP per capita USD 3,475 3,706 3,772 3,983 NA – – – NA – BoP (goods, services income) as % GDP – 26.5 – 22.5 – 22.5 – 19.1 NA – – – NA – * Official rate. ** End period. *** Year on year. Source: International Financial Statistics, IMF, June 2007. Country credit rating Fitch Ratings does not publish a sovereign credit rating for Belize. LEGAL AND REGULATORY Central bank Established in 1982, the Central Bank of Belize (CBB) operates in accordance with the Central Bank of Belize Act and its amendments. Bank supervision The CBB acts as the supervisory and regulatory authority for the financial sector in Belize, via its Financial Sector Supervision Department (FSSD), in accordance with the Banks and Financial Institutions Act (BFIA). Resident/Non-resident A resident company is one that is incorporated in and has a registered office in Belize. Bank accounts Foreign currency accounts held by residents both domestically and abroad are permitted, but approval from the CBB is required. Resident accounts in domestic currency (BZD) cannot be held abroad and cannot be converted into foreign currency. Non-resident foreign currency accounts are permitted, but approval from the CBB is required. Only international banks are permitted to hold foreign currency accounts of non-residents. Non-resident domestic currency (BZD) accounts are allowed. They can be credited with proceeds acquired via the sale of foreign currency and are convertible into foreign currency. Reporting There are no central bank reporting requirements for companies. Exchange controls The Belizean dollar (BZD) is Belize’s official currency. The BZD is pegged to the USD at a rate of BZD 2 per USD 1. Daily rates are quoted by the CBB for the Canadian dollar (CAD), pound sterling (GBP), and various Caribbean Community and Common Market (CARICOM) members’ currencies. A stamp duty of 1.25% is levied on all conversions from BZD to USD. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
  3. 3. CASH, TRADE TREASURY CENTRAL AMERICA BELIZE Belize is a member of CARICOM. Belize has established bilateral payments arrangements with the central banks of Anguila, Antigua, Barbados, Dominica, Grenada, Guyana, Montserrat, St. Kitts/ Nevis, St. Lucia and St. Vincent. Exchange controls are administered by the CBB. Atraveler may take only BZD 500 abroad.Amounts above this sum require approval from the CBB. The amount of foreign currency that can be taken abroad by a resident traveler is limited. Non-residents may take out up to the equivalent of BZD 500. Travelers can bring in up to BZD 500. Export proceeds are required to be surrendered to authorized dealers within six months of the shipment date unless the CBB states otherwise. The CBB requires direct surrender of sugar export proceeds. Prior approval from the CBB and clearance from the Commissioner of Income Tax (CIT) are required for commission/interest payments. An income statement and a declaration of dividends are also required in addition to CIT clearance for transfers of profits and dividends. Loan repayments also require prior approval from the CBB in addition to a copy of the loan agreement, amortization schedule and some proof of loan disbursement. Proceeds from invisible transactions and current transfers are required to be sold to authorized dealers. CBB approval is required for all capital transactions, although controls are liberally administered. If profits are to be repatriated, all inward investments are required to be registered with the CBB. Anti-money laundering/counter-terrorist financing* Belize has implemented anti-money laundering legislation (the Money Laundering (Prevention) Regulations 1998, amended 2003; the Misuse of Drugs Act 1990, amended 2000; the Financial Intelligence Unit Act 2002). Belize has established a financial intelligence unit (FIU) that is a member of the Egmont Group. Belize is a member of the Caribbean Financial Action Task Force (CFATF) and the Organization of American States/Inter-American Drug Abuse Control Commission (OAS/CICAD). Financial institutions in the broadest sense, apart from the gaming industry, are required to report suspicious transactions to the FIU. Records of these and all large currency transactions must be kept for at least five years. All cross-border currency transactions must be reported and all individuals entering or departing Belize with more than BZD 20,000 in cash or negotiable instruments must declare this to the authorities at customs, the CBB and the FIU. Account opening procedures require formal identification of the account holder. The one-off transaction limit above which identification is required is set at BZD 20,000. Offshore banks, international business companies and trusts are authorized to operate from within Belize, but shell banks are prohibited within the jurisdiction. For companies registered in Belize, the following data should be obtained: the original or certified copy of the certificate of incorporation; the memorandum and articles of association; the name and address of the beneficial owner and/or the person on whose instructions the signatories on the account are to act; a bank or credit reference; and a board resolution, power of attorney or similar authority given by the directors. A file search at the Registrar of Companies should also be made from time to time. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
  4. 4. CASH, TRADE TREASURY CENTRAL AMERICA BELIZE For non-Belizian registered companies, similar documents should be obtained and the identities of the directors and influential shareholders of the company verified in accordance with the requirements for non-Belizian personal customers. All financial institutions must monitor customer activity and maintain detailed business transaction records, capable of reconstructing the transaction. All records must be kept for at least five years. * Supplied by BCL Burton Copeland (see for background explanatory article). Data as at March 2007. TAXATION† Resident/Non-resident A company is considered resident in Belize if it is incorporated in Belize and has a registered office in Belize. A foreign company is considered resident if it is registered in Belize (as a foreign company doing business within Belize) and has a registered office and representative in Belize. Tax year The tax year corresponds to the calendar year; however, a company may apply to the Commissioner of Income Tax for permission to use a different year end. If a company elects to file a corporate income tax return, it must be filed within three months of the end of the financial year. Business tax returns and payments are made by monthly payments no later than the 14th day of every month, in respect of the previous month. Corporate taxation Resident companies are only subject to taxation on their income derived in Belize. Non-resident companies are taxed on income derived through activities in Belize. The corporate income tax rate is 25%. Capital gains tax Capital gains are not taxed in Belize. Withholding tax (subject to tax treaties) Payments to: Interest Dividends Royalties/Fees Resident companies Nil 15% Nil Non-resident companies in non-tax-treaty country 15% 15% 15% For some types of payment, business tax acts as a withholding tax. Withholding taxes are subject to tax treaties. Thin capitalization There are no formal thin capitalization rules in Belize. Transfer pricing There are no formal transfer pricing rules in Belize. Business tax Companies pay a business turnover tax at rates varying from 0.75% to 25%. Examples of some of these rates are: Media businesses 0.75% Trade or businesses 1.75% Rent from real estate 3.0% ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
  5. 5. CASH, TRADE TREASURY CENTRAL AMERICA BELIZE Professional services 6% Interest on deposits 0.0% Financial services 15% Dividends 15% Telecommunication services 19% Management fees paid to a non-resident 25% There are exclusions to avoid double taxation. Companies and self-employed persons may opt to have the monthly business tax on gross revenues treated as a final tax, in which case there is no obligation to file any other returns at the end of the financial year. However, if a loss has been made, a tax return based on net results of operations (audited financial statements) has to be filed in order to get a credit against the business tax expense in the next year, up to a maximum of 20% per annum. Persons making payments on contracts in excess of BZD 3,000 are required to withhold 3% of the gross contract sum. This tax is regarded as a credit to the business tax of the contractor. International business companies (IBC) IBCs registered in Belize are free from all local taxes in Belize, but are prohibited from doing business with residents of Belize. Stamp duty Transactions involving the Government are subject to stamp duty at various rates. The transfer of real estate title is subject to a 15% stamp duty to non-Belizeans and non-CARICOM citizens and 5% for Belizeans and other CARICOM citizens. Sales taxes A sales tax of 9% is chargeable on the sale of goods manufactured in Belize and on services. The sales tax is also levied at 9% on importation of goods into the country. Fuel, alcohol and tobacco are taxed at 14%. A number of goods (including exports, basic foods, pharmaceuticals and books) and services (including education, utilities and some transport services) are exempt from sales tax. There is an accommodation tax of 9% (this is not a sales tax). Payroll and social security taxes Social security contributions are required as follows: Employer (BZD) Employee (BZD) Weekly earnings under BZD 70.00 3.57 0.83 Weekly earnings from BZD 70.00 to BZD 109.99 5.85 1.35 Weekly earnings from BZD 110.00 to BZD 139.99 8.45 1.95 Weekly earnings BZD 140.00 to BZD 179.99 9.65 3.15 Weekly earnings from BZD 180.00 to BZD 219.99 11.25 4.75 Weekly earnings from BZD 220.00 to BZD 259.99 12.85 6.35 Weekly earnings from BZD 260.00 to BZD 299.99 14.45 7.95 Weekly earnings from BZD 300.00 and over 16.05 9.55 Employed persons (60–64 years) who have not received retirement benefit 2.60 – Employed persons 65 years and older 2.60 – † All tax information supplied by Deloitte Touche ( Data as at February 1, 2006. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
  6. 6. CASH, TRADE TREASURY CENTRAL AMERICA BELIZE BANKING Major banks Bank Total assets (USD millions)* December 31, 2006 Domestic commercial licensed banks The Belize Bank Ltd 405 Scotiabank (Belize) Ltd (Bank of Nova Scotia Group) 198 Atlantic Bank Ltd 150 First Caribbean International Bank (Barbados) Ltd 117 Alliance Bank of Belize Ltd 71 Banks licensed under the International Banking Act Total assets (USD millions)* December 31, 2006 Provident Bank Trust of Belize Limited 136 Belize Bank International 71 Investment Commerce Bank Limited 31 Atlantic International Bank Ltd 27 Oxxy Bank Limited 20 Handels Bank Trust Company Ltd 13 Caye International Bank Ltd 11 * At BZD 2 per USD 1. Sources: Central Bank of Belize and Overview There are currently five commercial banks (two of which – Scotiabank and First Caribbean International Bank – are foreign banks) and seven international (offshore) banks in Belize. First Caribbean International Bank was only issued a domestic banking license in 2002, when it acquired the Belize branch of Barclays Bank. The largest commercial bank in Belize is the domestically owned Belize Bank. Belize Unit Trust Corporation (BELUTC) became the first non-banking financial institution to be granted a license to operate in Belize in January 2003. Scotiabank Belize (part of the Canadian Bank of Nova Scotia Group) is the largest foreign bank in the country. PAYMENT INSTRUMENTS Cash Cash is an important payment instrument in Belize, particularly for consumer and small business transactions. Credit transfers Electronic credit transfers are only possible on an intrabank basis. As a result, larger organizations tend to have accounts with the main banks for their payroll and supplier payments. However, it is possible to arrange manual credit transfers on an interbank basis. Credit transfers are used by corporate clients for low-value payment transactions such as direct deposit of payroll and by financial institutions for same-day settlement of large-value checks through central bank accounts. Business customers transfer information for direct deposit of payroll via the Internet or on diskette. This requires at least one day’s notice for processing and settlement. Financial institutions submit credit transfer instructions manually. This requires at least two days’ notice for posting and settlement. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
  7. 7. CASH, TRADE TREASURY CENTRAL AMERICA BELIZE Direct debits Direct debits are used for the payment of utility bills and other consumer bills. This requires at least one business day for posting and settlement. Direct debits make up a very small share of non-cash payment instruments. Checks The check is the main non-cash payment method and comprises the largest share of the total non-cash payments. Large-value checks are cleared and settled on a same-day basis. Low-value checks drawn on city banks are cleared and settled on T+2 and those drawn on out-district branches are cleared and settled on T+6. Bank drafts are cleared the same way as checks. Card payments Both debit and credit cards are used in Belize. Payment cards can be used to withdraw cash from ATMs as follows: Visa card (debit credit) – Atlantic Bank Limited, Belize Bank Limited and First Caribbean International Bank. MasterCard (debit credit) – Atlantic Bank Limited, Belize Bank Limited. Cards with Plus or Cirrus Logos – Belize Bank Limited. International debit cards linked to Visa/Plus – First Caribbean International Bank. Visa electron debit card (locally issued) �������������������������������������– �����������������������������������Atlantic Bank Limited, Belize Bank Limited, First Caribbean International Bank. ATMs of Alliance Bank of Belize Limited and Scotiabank Belize Ltd accept only locally issued cards utilized by their customers. The above payment cards can also be used at various POS machines countrywide. American Express cards can only be used at merchants who have a POS facility with Belize Bank Ltd. ATM/Debit cards are issued on checking and savings accounts and allow ATM withdrawals and the inquiries of bank balances and POS payments. Credit card payments have increased during the last five years, but debit card usage has remained very low. Credit cards are offered by commercial banks. Most credit cards are issued under the Visa and MasterCard brands. Prepaid telephone cards are available and used. PAYMENT SYSTEMS Type The Belize Bankers’ Clearing House is a deferred net settlement system owned and operated by the CBB. It is used to clear and settle BZD checks. Large-value transfers for settlements of large-value checks or large financial transactions are done through the CBB on a gross settlement basis, but are not real- time since the system is not fully automated. Participants The Belize Bankers’ Clearing House currently has six direct participants/members, including the CBB, and one indirect participant. All commercial banks and the Government of Belize can effect credit transfers through the CBB. Transaction types processed The Bankers’ Clearing House processes all checks denominated in BZD. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
  8. 8. CASH, TRADE TREASURY CENTRAL AMERICA BELIZE Operating hours The Belize Bankers’ Clearing House operates between 08:15 and 15:00 ET. Large-value transfers can be made between 08:00 and 15:00 ET. Clearing cycle details 08:15–15:00: The CBB accepts transactions for settlement of large-value checks and other credit transfers. 15:00: Closing time for delivery of transactions. Belize Bankers’ Clearing House 08:15: Direct clearers physically exchange checks and authorize settlement of net balances. 08:30: Settlements are debited or credited to participants’ accounts at the CBB. The authors thank Ms. Marilyn Gardner, Manager Banking Currency at The Central Bank of Belize, for her help with the Payment Instruments and Payment Systems sections. CASH MANAGEMENT Domestic Notional pooling Notional pooling is not permitted in Belize. Cash concentration No information is available. Collections No information is available. Short-term investments Companies use a variety of instruments for short-term investments, including: certificates of deposit time deposits treasury bills. Cross-border Cross-borderpaymentinstructionsareroutedthroughSWIFTorothersecuremessage transfer systems and settled through accounts held with foreign correspondent banks abroad. The central bank and two of the five commercial banks are members of SWIFT. ELECTRONIC BANKING Two commercial banks (The Belize Bank and Atlantic Bank) offer online bill payments via the Internet. Customers are able to view their accounts and make third- party payments for utility bills, credit card bills and social security contributions. However, usage among consumers is relatively limited due to the low PC and Internet penetration in Belize (estimated to be 11.6% of the country’s population at the end of 2006). TRADE Trading partners Import US 31%, Mexico 11.6%, Russia 8.8%, Cuba 6%, Guatemala 5.6%, China 4.6%, Spain 4.5%. Export US 31%, UK 25.3%, France 4.9%, Jamaica 4%. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
  9. 9. CASH, TRADE TREASURY CENTRAL AMERICA BELIZE Imports Documents In order to import goods into Belize, a commercial invoice is required, which must include a full description of the imported goods.Abill of lading and, in certain cases, a certificate of origin are also mandatory. A sanitary certificate is needed for importing live animals and the majority of plants and plant products. Authorization is required from the CBB for import prepayments, although in most cases this authority is designated to the commercial banks. Licenses Licenses are required from the Ministry of Industry for importing a variety of items such as food, agricultural products and certain household and construction products for health or standardization reasons or to protect domestic industries. A permit from the pesticides control board is also required for importing pesticides. Taxes/Tariffs and other fees Products imported into Belize from outside CARICOM are subject to a common external tariff (CET). Imports are usually subject to tariffs ranging from 5% to 20%, although numerous items (particularly agricultural products) are exempt from import duty. Most public-sector and certain non-profit-entity imports, imports of an emergency or humanitarian nature and goods to be re-exported are duty free. Intra-CARICOM trade is also exempt from duties. Revenue replacement duties ranging from 5% to 25% are levied on certain items. A 2% environmental tax is levied on a wide array of imports. Certain products are also subject to specific duties and surcharges. Belize has established free trade agreements with Costa Rica and the Dominican Republic. It has preferential trade agreements with the United States, the European Union, Colombia and Venezuela. All Belizian goods imported into Canada are duty free. Prohibited imports It is prohibited to import certain items (such as beans, jam, jellies, matches, pasta, peanut butter, pepper sauce, rice and wheat flour) from outside CARICOM. Beans and rice cannot be imported if the domestic market has a surplus of these products. The Belize Marketing Board has an import monopoly on rice, potatoes, onions and carrots. Exports Documents Sanitary certificates from the Belize Agricultural Health Authority are required for exporting live animals (with the exception of pets) and agricultural products. Licenses Licenses are required for exporting sugar, flour, beans, citrus fruit, live animals (with the exception of pets), fish, crustaceans and mollusks (with the exception of aquacultural species), and logs and lumber. Taxes/Tariffs and other fees A 1.5% customs administration fee is levied on trans-shipments. Prohibited exports It is prohibited to export marine products, unprocessed coral or turtle shells, and pre- Columbian archaeological artifacts. Financing imports and exports Imports There are no financing requirements for imports. ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
  10. 10. CASH, TRADE TREASURY CENTRAL AMERICA 10 BELIZE Exports There are no financing requirements for exports. GLOSSARY Belize Bankers’ Clearing House (BBCH) – The Belize Bankers’ Clearing House is a deferred net settlement system owned and operated by the Central Bank of Belize. It is used to clear and settle checks denominated in BZD. BZD (Belize dollar) – The official currency of Belize. Central Bank of Belize (CBB) – The country’s central bank since 1982. USEFUL CONTACTS Central Bank of Belize Leading banks:  The Belize Bank Ltd Scotiabank (Belize) Ltd Atlantic Bank Ltd Government of Belize Ministry of Natural Resources and the Environment, Commerce and Industry Belize Chamber of Commerce and Industry Belize Trade and Investment Development Service HSBC CONTACT DETAILS Ms. Maritza Chong Senior Vice-president, CIB/CMB Manager Tel: +507 210 7633 E-mail: ♦