Belize: Country and Foreign Investment
This page was last updated on 14 April 2021.
Belize is centrally located in the Americas
Belize is an independent country within the Commonwealth. It is bordered by Mexico to the north, the Caribbean Sea to the west and Guatemala to the east and south. It is 24,000 sq km in size, with a population of just over 365,000 (est. 2016). The country was historically heavily forested, but there has been extensive logging. The climate is semi-tropical and there can be hurricanes. The extremely mixed population is racially harmonious. English is the official language and the main religion is Christianity. The currency is the Belizean dollar, fixed at BZD2 = USD1.
Sugar and bananas present a difficulty for the centrist Government . . .
Belize has a bicameral Westminster-style government; the lower house, the House of Representatives, consists of 31 members who are elected by means of universal suffrage; the most recent election was in November 2015. The upper house, the Senate, has 13 members who are appointed by the governor-general for five-year periods.
The government has been tackling economic problems caused by reduced access to privileged markets for sugar and bananas, by encouraging foreign investment in manufacturing and the development of mass tourism. The country's structural deficit can only be financed by overseas borrowing, but the government has been able to renegotiate the terms of repayment for the 'super bonds'.
GDP growth has fluctuated greatly in the last few years: it was 8.3% in 2015, 0.5% in 2016 and 1.0% in 2017. Recently, the government budget, which had been tightly controlled, has run quite sharply into deficit; the budget deficit was 2.9% in 2014, 7.9% in 2015 and 3.3% in 2016.
In August 2006, former Prime Minister Said Musa announced that the servicing of the country's debt, which accounted for 90% of its GDP, was "no longer a viable option" on existing terms, leading to a rearrangement of Belize’s external debt stock.
. . . and foreign pressure may hold back offshore development.
Internal Belizean taxes are moderate, with a small turnover-based tax in addition to 25% corporation tax. Employees pay a flat tax of 25% tax on income plus social contributions. There is a variety of offshore schemes, including IBC legislation, a modern trusts law, and an array of free zones and investment incentive schemes. Belize offered 'economic citizenship' until the programme was cancelled in 2002, and there is a retired persons regime.
The business environment is quite good, though e-commerce lags.
Telecommunications are state-of-the-art, but too expensive due to the telecommunications monopoly which is holding back financial opportunities. Recent moves to open up an e-commerce free zone may have come too late for Belize to catch up with more advanced jurisdictions. Air and sea communications are both good, and it may be that Belize's immediate offshore future lies more in expanding its effective and popular free zones than in other directions.