It is possible to acquire a banking license in Belize. Below we provide basic information about the banking system in the country and discuss the types of banks that you can set up in Belize.
The banking system in Belize consists of several financial institutions of different types with the Central Bank of Belize at the top of the pyramid. The Central Bank was established in 1982 and the latest amendments to the Act were passed in 2000. Similarly to other English-speaking countries in the Caribbean, Belize uses the British banking system as a reference point. The functions of the Central Bank of the country are as follows: it provides banking services to the Government of Belize, issues national currency, regulates the activities of commercial banks and other financial institutions, consults the Government on financial and economic issues, conducts relevant research and publishes the results, and so on.
You can find financial institutions of the following types in Belize:
- Commercial banks;
- Offshore banks;
- Credit unions;
- Mortgage societies;
- Insurance companies;
- A savings banks owned by the state;
- A state bank for small farmers and small business owners; and
- Exchange offices (casas de cambio).
An Offshore Banks Act went into effect in 1996 in Belize. It gave impetus to the development of Belize as an offshore financial center. There are type ‘A’ offshore banks in Belize and type ‘B’ offshore banks. A type ‘A’ bank is a normal bank able to provide the standard set of banking services to customers without restrictions. A type ‘B’ bank cannot provide services to the general public but it can serve the interests of a group of people or companies. In other words, a type ‘B’ bank is a private bank. A Belizean bank has to have at least two resident directors but it can have a single shareholder. The shareholders’ identities are kept private (even though a document with their names has to be kept at the registered legal address of the bank). Offshore banks do not pay taxes in Belize and their currency exchange operations are not monitored. At the same time, they have to submit financial reports to the Central Bank every year.
Offshore banks in Belize
The first bank acquired an international banking license in 1998 in Belize. Since that time, the number of offshore banks registered in the jurisdiction has been growing. Below we list seven most prominent offshore banks registered in Belize:
- Atlantic International Bank Limited;
- Investment & Commerce Bank Limited;
- Inter Bank & Trust Limited;
- Handels Bank and Trust Limited;
- Market Street Bank Limited;
- The Oxxy Bank Limited;
- Provident Bank & Trust of Belize Limited;
- Caye International Bank Limited.
These banks welcome foreign clients onboard. They provide banking services to people of all countries. Opening an account in Belize remotely is possible but the task requires professional assistance.
A banking license in Belize
You can launch your own offshore bank in Belize if you are affluent enough. Without doubt, serious preparatory work is required.
Class ‘A’ banks in Belize
To establish a bank of class ‘A’, you have to have an office in Belize as well as offices in other countries. Banks of this type are eligible to perform international financial operations without any restrictions. The number of people working at the registered legal address of the bank in Belize can be very small. The majority of the bank employees can actually work from other countries. The annual banking license fee for a class ‘A’ bank is USD 20,000.
Class ‘B’ banks in Belize
As a rule, banks of class ‘B’ are established by a large group of affiliated companies to provide banking services to the group members exclusively. A class ‘B’ bank also has to have an office in Belize similarly to a class ‘A’ bank. Only the operations specified in the license can be performed by the bank. The annual banking license fee for a class ‘B’ bank is USD 15,000.
You need at least USD 3,000,000 to launch a bank of class ‘A’ in Belize and at least USD 1,000,000 to launch a class ‘B’ bank. The procedure of acquiring a banking license in Belize is in conformity with international standards.
Steps in the procedure of acquiring a banking license in Belize
The procedure consist of five main stages:
- A preliminary meeting of the founders;
- An organizational meeting;
- Submission of the application for a license;
- Central Bank’s decision;
- License issuance.
The Central Bank of Belize also issues licenses to branches of existing banks with a good reputation registered in other jurisdictions. The jurisdiction has to follow the Basel core principles of monitoring banking activities.
The interested parties are invited to the office of the Central Bank CEO to discuss their initiative. There they can obtain the package of allocation documents.
The candidate (the applicant or his/ her authorized representative) has to have an organizational meeting with the Central Bank CEO to clarify certain issues that may not be clear enough. Beginning from this stage, the person will conduct all the communication with the Central Bank officers on behalf of the bank founder or the group of founders.
Application for a banking license
You will be given an application form if you would like to acquire a banking license in Belize. In the form, you will have to indicate the names of the key bank officers/ bank founders and supply their biographical data. In addition to that, you have to supply detailed information concerning the business side of your project. In particular, you have to share the following information with the Central Bank managers:
- Specifics of the banking services that the applicant or the group of applicants is going to provide;
- Basic corporate documentation including the Memorandum and Articles of Association, the head office address, the branches locations, and the intended level of capitalization;
- A detailed business plan plus financial plans for at least three years (the financial plans have to be in conformity with the business plan);
- Financial reports (balance sheets, profit and loss statements, etc.) for the last three years if available.
The application processing fee is USD 500. The fee is to be paid when filing the application documents and it is not returned even if the application for a banking license has been rejected.
The first thing that the Central Bank officers will want to make sure of is that the application document package is complete and all the forms are filled out correctly. If a certain document is missing or if some mistakes have been made, the authorized representative of the bank founders will be notified about that. The Management Board of the Central Bank of Belize is not going to consider the application for a banking license unless all the application documents are in perfect order.
When they are, the Central Bank will assess the application in two stages. First, the personal histories of the bank founders and key officers are going to be studied. The personal documents have to include police clearances and letters of recommendation, among other things. If the Central Bank managers are satisfied, they will go on to appraise the quality of the business proposal. They will want to make sure that the proposed bank has potential for success. The Central Bank managers are prepared to provide explanations of their decisions and issue recommendations that can improve the applicants’ chances to get a banking license.
The Central Bank’s decision
After appraising the application for a banking license, the Central Bank managers will make a final decision. They will make a positive decision if they are totally satisfied with the information that they have and the prospects that they see. Otherwise, the application will be rejected.
If the decision is positive, a banking license will be issued to the applicants. Now they can start breathing life into their new bank. They will be able to provide the banking services specified in the license.
In conclusion, we would like to re-emphasize the fact that setting up a bank in Belize is a complicated bureaucratic procedure and you will certainly need professional advice if you would like to have a bank of your own in Belize.