The Belize Government policies do not appear to discriminate or distort foreign investors; however, private companies don’t tend to implement internal codes of conduct, ethics and compliance programs; additionally, bribery of government officials is commonplace.
Regulative authority exists at both local and national levels, with national laws dictated by cabinet, passed by parliament, and implemented by government ministries. There are also quasi-governmental organizations mandated by law to oversee specific regulatory processes.
Relationship Between Cross-Border Trade Activities
Belize, lacking domestic natural resources, relies heavily on trade partners for basic goods and services. These partners include the United States, Mexico, China, Guatemala and Honduras as primary importers for Belize while they also supply energy essential to economic development in Belize.
Belize’s export sector encompasses agricultural products, construction materials and machinery. Sugar, timber and fish products are among the key agricultural exports while manufacturing industries produce rum, soft drinks, beer and cigarettes; additionally, fertilizers, wire nail products and roofing materials are produced here.
Tourism plays an integral part of Belizean economic success. Tourists can experience everything from fishing and diving, ecotourism and birding to natural and cultural sites like Caracol Archaeological Site. Belizean mountains provide ample opportunity for hiking and mountain biking while the Caribbean Sea makes for prime snorkeling and diving destinations.
Foreign investment continues to pour into Belize’s agricultural sector, with much of it going towards sugar production. Unfortunately, however, agriculture in Belize remains vulnerable to weather conditions and pests; thus, the Belizean government is working towards improving productivity with genetically modified crops.
Government efforts are also focused on decreasing dependence on imports by creating a biofuel industry. Agrofuel production will produce biodiesel and ethanol, renewable fuels which can power vehicles as well as produce electricity.
Belize has taken measures to reform its tax regime yet remains susceptible to money laundering. Foreign actors have been seen moving funds through Belize while there remains malfeasance at higher ranks of tax service. Belize maintains a semi-autonomous interagency group called Financial Intelligence Unit for which technical support from US has been provided.
Human smuggling in Belize has become an acute problem over time, mainly as a result of poverty, food insecurity and climate shocks. Most migrants arriving smuggled are Central Americans seeking to bypass stringent border controls in their home countries by entering Belize legally instead.
Import and Export Businesses
Belize recognizes the right of private entities to establish, own and operate business enterprises freely and engage in remunerative activities without interference by government authorities. Private entities must register with relevant government authorities in order to legally conduct business and pay taxes, with both foreign and domestic private entities subject to this rule. Regulatory authority exists both locally and nationally with cabinet ministers overseeing implementation and quasi-governmental organizations mandated by law to administer regulatory processes on their behalf e.g. Belize Tourism Board or BELTRAIDE.
Belize’s dynamic economy and expanding infrastructure offer investment opportunities. Belize government actively encourages foreign direct investment (FDI) as a way of relieving fiscal strain and diversifying the economy, especially in sectors like tourism, BPO services, agriculture and telecom. However, investors must be wary of bureaucratic or regulatory barriers which might hamper these endeavors.
International financial transactions can be conducted in Belize through banks operating there as well as its limited capital market; however, due to lack of a stock exchange and underdevelopment in these markets.
Belize’s economic and trade policies are coordinated at a regional level through CARICOM membership, with import tariffs set by CARICOM’s Common External Tariff primarily determining them. Furthermore, Belize is signatory to the OECD Convention on Investor-State Dispute Settlement as well as having two regional Economic Partnership Agreements signed with CARIFORUM and EU.
Belize is a significant trading partner with the US and imports mainly mineral fuels and oils, machinery and mechanical appliances, vehicles and automotive parts, plastic articles, pharmaceuticals, iron & steel as well as food & beverages from there. Furthermore, Belize serves as an important hub for transiting counterfeit electronic and electrical goods from China & Singapore targeting US markets; additionally Belize serves as an important site for illegal trafficking of excise products such as cigarettes & alcohol from Mexico into its borders.
An extended history of armed conflict between Belize and Guatemala has left lasting scars on political sensibility, which cannot easily be resolved through legal means or negotiation. Therefore, in order to properly prepare Belizean society to manage cross-border financial and trade activities will require extensive engagement from civil society institutions.
International Transactions
Small economies like Belize rely heavily on external sectors to offset limited domestic markets and so require efficient funds transfer mechanisms. Foreign investments are welcomed and there are incentive programs in place for both foreign and local investors. Furthermore, Belize has signed twenty tax information exchange agreements and one multilateral convention against money laundering.
Regulative authority exists both locally and at a national level, with the latter more relevant to foreign businesses. Cabinet policies are approved by parliament before being implemented through various ministries by way of executive orders from different ministries. Furthermore, quasi-governmental organizations mandated by law manage specific regulatory processes e.g. the Belize Tourism Board, BELTRAIDE and the Agricultural Health Authority. A gazette contains proposed and passed laws and regulations relevant to their portfolio while individual ministry websites also publish relevant policies, laws and regulations pertinent to their field of operation.
The Statistical Institute of Belize (SIB) releases trade data monthly on its website with one month lag and press releases discussing key trends and driving factors but does not release service sector data which limits its usefulness for surveillance. Belize recently revised its national accounts with assistance from CARTAC, IMF and Statistics Canada which has improved methodology significantly.
Belize provides an assortment of currencies, with its official one being the Belizean Dollar; most banks allow account holders to maintain accounts in major global currencies like USD and EUR. Investors should keep in mind, however, that Belizean law restricts certain investments into their country.
At present, Belize only promotes investments that are at least 51% Belizean-owned and has strict currency controls on foreign investments requiring specific permission from the Central Bank for any capital transactions between residents and non-residents.
Belizean courts have upheld several international arbitration judgments against their government and in 2021 passed a Crown Proceedings Act which impacts enforcement of foreign arbitral awards against it. Furthermore, three international conventions related to foreign investments have also been adhered to.
Efficient Funds Transfer Mechanisms
Belize offers investors some attractive investment opportunities due to its relatively high per capita GDP, political and currency stability, bilingual population and developing infrastructure. Unfortunately, however, international surveys of ease of doing business rank Belize poorly; furthermore, foreign investors remain subject to various bureaucratic and regulatory impediments that hamper economic expansion.
Although the government encourages foreign direct investment (FDI) as a way of alleviating fiscal pressure and diversifying its economy, there remain bureaucratic barriers that impede investment and growth. Labor laws remain burdensome to investors: foreign businesses cannot hire directly from the public sector but must follow Central Bank of Belize regulations regarding hiring Belizeans; additionally, SMEs and tour operators businesses must have 51 percent local ownership.
Belize’s foreign exchange earnings mainly derive from tourism, agricultural exports and remittance inflows. While the tourism industry is resilient against external shocks, agriculture relies heavily on limited number of commodities which may be subject to price fluctuations on international markets. Furthermore, poverty rate remains high with over one third of population living below international definition of poverty in 2021 – this situation compounded with less participation by women and Mayans from labor force further exacerbating poverty reduction efforts.
Belizean judiciary remains independent from executive branch control, and its judgments are widely respected. Furthermore, Belize ratified and implemented United Nations Convention on Receipt and Enforcement of Foreign Arbitral Awards while adhering to International Financial Reporting Standards as standard accounting framework for domestic banks and financial institutions.
Remittances do not face time restrictions; however, individuals must obtain a Belizean ID in order to remit funds through local banks. Furthermore, the Central Bank mandates all foreign investments made in Belize be reported directly.
Regulation exists at both national and local levels of government in Belize, with laws passed by cabinet being implemented through various ministries. Furthermore, several quasi-governmental organizations such as Belize Tourism Board and BELTRAIDE are authorized by law to manage specific regulatory processes – this includes being responsible for licensing.
