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Country Commercial Guides for FY 2000:
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VII. INVESTMENT CLIMATEOPENNESS TO FOREIGN INVESTMENT:
THE BELIZE GOVERNMENT GENERALLY WELCOMES FOREIGN INVESTMENT AND NORMALLY ENCOURAGES PROJECTS WHICH RESULT IN INCREASED PRODUCTION, DOMESTIC INCOME, EMPLOYMENT OPPORTUNITIES, FOREIGN EXCHANGE EARNINGS AND SAVINGS, DIVERSIFICATION OF THE ECONOMIC BASE, AND THE TRANSFER OF TECHNOLOGY AND SKILLS. ABOVE ALL, THE GOVERNMENT GIVES SPECIAL CONSIDERATION TO EXPORT-ORIENTED BUSINESSES ESTABLISHED IN LESS-DEVELOPED AREAS.
THE GOB HAS STATED THAT IT RECOGNIZES THE IMPORTANCE OF CREATING AN ENABLING ENVIRONMENT TO ATTRACT GENUINE LOCAL AND FOREIGN INVESTORS AS A CATALYST TO ACHIEVE SUSTAINED ECONOMIC GROWTH AND FACILITATE FURTHER DIVERSIFICATION OF THE BELIZEAN ECONOMY. TO THIS END, THE MINISTRY OF COMMERCE AND INDUSTRY HAS ALREADY STARTED DRAFTING NEW LEGISLATION TO ESTABLISH AN INDUSTRIAL DEVELOPMENT BOARD, WHOSE PRIMARY FUNCTION WLLL BE TO PROMOTE INDUSTRIAL DEVELOPMENT OF NON-TRADITIONAL INDUSTRIES OF THE PRODUCTIVE SECTOR.
BECAUSE PROMOTION OF INVESTMENT IN BELIZE HAS ALWAYS BEEN COMPLICATED BY RED-TAPE, WITH SEVERAL GOVERNMENT MINISTRIES SHARING AUTHORITY OVER ANY GIVEN INVESTMENT, THE GOB ESTABLISHED THE TRADE AND INVESTMENT PROMOTION SERVICE (TIPS) IN 1997 TO SERVE AS AN ONE-STOP SHOP FOR INFORMATION TO INVESTORS. TIPS HAS IDENTIFIED THE FOLLOWING SECTORS OF THE ECONOMY AS PRIORITY AREAS FOR INVESTMENT:
- AGRICULTURE, AGRO-INDUSTRIES, FOOD PROCESSING AND LIVESTOCK.
- TOURISM AND TOURISM-RELATED INDUSTRIES.
- AQUACULTURE AND HORTICULTURE.
- LIGHT-MANUFACTURING INDUSTRIES AND OFFSHORE ASSEMBLY PLANTS.
- DEEP-SEA FISHING AND PROCESSING.
- FORESTRY AND FORESTRY-BASED INDUSTRIES.THERE ARE SEVERAL INCENTIVE SCHEMES DESIGNED TO ENCOURAGE INVESTMENT IN BELIZE, INCLUDING THE FISCAL INCENTIVES ACT, INTERNATIONAL BUSINESS AND PUBLIC COMPANIES ACT, EXPORT PROCESSING ZONE ACT, AND COMMERCIAL FREE ZONE ACT. HOWEVER, MANY FOREIGN INVESTORS HAVE COMPLAINED THAT THESE INVESTMENT PROMOTION TOOLS ARE RARELY AS OPEN AND EFFECTIVE AS THEY ARE PORTRAYED. INVESTORS ARE NOT REQUIRED TO HAVE DEVELOPMENT CONCESSIONS OR TO WORK IN FREE TRADE ZONES IN ORDER TO INVEST IN BELIZE. NONETHELESS, MANY FACTOR THESE INCENTIVES INTO THEIR INVESTMENT DECISIONS AS AN ESSENTIAL TOOL TO SAVE ON LOCAL TAXES AND DUTIES.
SECTORS CLOSED TO FOREIGN DIRECT INVESTMENT:
WHILE NON-BELIZEANS CAN INVEST IN ANY SECTOR OF THE ECONOMY, CERTAIN ACTIVITIES REQUIRE SPECIAL PERMITS AND LICENSES, WHICH MAY NOT BE GRANTED TO NON-BELIZEANS. THESE ACTIVITIES INCLUDE:
- MERCHANDISING
- FISHING (WITHIN THE BARRIER REEF)
- SUGAR CANE CULTIVATION
- INTERNAL TRANSPORTATION
- RESTAURANTS AND BARS
- SOUVENIR MANUFACTURING FOR LOCAL MARKET
- BEE-KEEPING
- CRUISE SHIPS
- SIGHTSEEING TOURS (SEA, OVERLAND, RIVER)
- ACCOUNTING
- LEGAL SERVICES
- REAL ESTATE AND INSURANCE
- ENTERTAINMENT
- BEAUTY SALONSVISA, RESIDENCE, AND WORK PERMIT REQUIREMENTS:
ON FEBRUARY 5, 1999, THE GOB INTRODUCED A SET OF NEW POLICIES GOVERNING IMMIGRATION AND NATIONALITY REQUIREMENTS FOR VISITORS TO BELIZE. THE NEW POLICIES WERE INTRODUCED TO ACHIEVE FOUR OBJECTIVES: 1) PROTECT BELIZEAN WORKERS, 2) CONTROL AND MANAGE BELIZE'S BORDERS, 3) APPREHEND AND DEPORT THOSE WHO WILLFULLY VIOLATE BELIZEAN LAWS, AND 4) IMPROVE THE SERVICES OF THE IMMIGRATION AND NATIONALITY DEPARTMENT.
AS BEFORE, NO VISAS ARE REQUIRED FOR CITIZENS OF THE U.S., UNITED KINGDOM AND ANY OTHER COMMONWEALTH COUNTRY. UPON ARRIVAL AT ANY OF BELIZE'S PRINCIPAL POINTS OF ENTRY, A VISITOR IS GIVEN A MAXIMUM OF THIRTY DAYS PERMIT TO REMAIN IN THE COUNTRY. THIS TIME PERIOD DEPENDS ON THE VISITOR'S FINANCIAL SITUATION ($30/DAY) TO COVER HIS/HER PLANNED STAY IN BELIZE. HOWEVER, IF THE VISITOR WISHES TO STAY IN BELIZE FOR AN EXTENDED PERIOD PAST THE INITIAL THIRTY DAYS, THE INDIVIDUAL WILL HAVE TO VISIT THE IMMIGRATION DEPARTMENT TO RENEW HIS/HER VISITOR'S PERMIT. IN THIS CASE, THE IMMIGRATION DEPARTMENT MAY GRANT THE INDIVIDUAL AN EXTENSION OF THREE MONTHS, DEPENDING ON THE SPECIFIC NEEDS OF THE INDIVIDUAL. A VISITOR IS REQUIRED TO PAY A MONTHLY PERMIT FEE OF BZDOLS 25 ($12.50) FOR THE FIRST SIX MONTHS; THEREAFTER THE FEE IS BZDOLS 50 PER MONTH. IF, ON THE OTHER HAND, THE VISITOR INADVERTENLY LETS HER/HIS PERMIT EXPIRE, S/HE IS SUBJECT TO A FINE OF BZDOLS 1,000.
FOREIGNERS WHO WISH TO BECOME LEGAL RESIDENTS OF BELIZE MUST SATISFY SEVERAL REQUIREMENTS OF THE IMMIGRATION DEPARTMENT. AS OF FEBRUARY 5, 1999, AMERICANS WISHING TO OBTAIN PERMANENT RESIDENCY IN BELIZE ARE REQUIRED TO PAY AN APPLICATION FEE OF BZDOLS 1,250 AND BZDOLS 125 FOR THE PERMANENT RESIDENCE CARD. DETAILED INFORMATION CAN BE HAD BY CONTACTING THE DEPARTMENT AT TEL: 501-8-22611 OR FAX: 501-8-22662.
NON-BELIZEANS IN BELIZE ON A VISITOR'S PERMIT ARE NOT ALLOWED TO WORK. ALSO, AS PART OF GOVERNMENT'S NEW IMMIGRATION POLICIES, BUSINESSES THAT HIRE ILLEGAL IMMIGRANTS ARE SUBJECT TO HEAVY FINES OF UP TO BZDOLS 5,000 AND PAYMENT OF REPATRIATION COSTS. WORK PERMITS WILL NOT BE ISSUED TO ALIENS WHO SEEK EMPLOYMENT AS WAITERS, VENDORS, DOMESTIC AND FARM WORKERS. FOREIGNERS WHO QUALIFY FOR A WORK PERMIT ARE REQUIRED TO PAY A FEE FOR THE PERMIT. THE FOLLOWING FEES APPLY TO THE DIFFERENT CATEGORIES OF WORK PERMITS (FIGURES ARE IN BZDOLS):
- PROFESSIONAL AND TECHNICAL WORKERS 1,500/YEAR - GENERAL WORKERS (EXCEPT SEASONAL AGRICULTURAL WORKERS 200/YEAR - SEASONAL AGRICULTURAL WORKERS 50/CROP - ENTERTAINERS PERMORMING IN GROUPS OF TWO OR MORE BUT LESS THAN SIX PERSONS 500/WEEK - ENTERTAINERS IN GROUPS OF SIX PERSONS OR MORE 750/WEEK - ENTERTAINERS PERFORMING ALONE 300/WEEK - RELIGIOUS, EDUCATIONAL AND VOLUNTARY WORKERS 50/YEAR TO APPLY FOR A WORK PERMIT, VISITORS MAY CONTACT THE LABOR DEPARTMENT AT TEL: 501-8-22281 OR FAX: 501-2-34545.
CONVERSION AND TRANSFER POLICIES:
THE BELIZE INVESTMENT GUIDE STATES THAT FOREIGN INVESTORS ARE REQUIRED TO REGISTER ANY INVESTMENTS MADE IN BELIZE WITH THE CENTRAL BANK OF BELIZE TO FACILITATE THE REPATRIATION OF PROFITS, DIVIDENDS, ETC. THE GOB ALLOWS COMPANIES WITH PROPER DOCUMENTATION TO GO DIRECTLY TO THE COMMERCIAL BANKS TO REQUEST FOREIGN EXCHANGE. HOWEVER, THERE ARE OCCASIONAL SHORTAGES OF FOREIGN EXCHANGE IN THE COMMERCIAL BANKS, WHICH RESULT IN SOME DELAYS IN PAYMENTS FOR CURRENT INTERNATIONAL TRANSACTIONS. TRANSFER OR SALE OF LAND IN EXCESS OF 10 ACRES TO OR FROM NON-BELIZEANS REQUIRES THE APPROVAL OF THE MINISTER OF LANDS, BUT THIS IS USUALLY NOT AN OBSTACLE.
EXPROPRIATION AND COMPENSATION:
THERE HAVE BEEN NO INSTANCES WHERE THE GOVERNMENT HAS EXPROPRIATED OR NATIONALIZED A FOREIGN COMPANY. HOWEVER, THERE HAVE BEEN SEVERAL CONTENTIOUS CASES WHERE GOVERNMENT, UNDER ITS RIGHT OF EMINENT DOMAIN, APPROPRIATED LAND WHICH BELONGED TO PRIVATE PROPERTY OWNERS, INCLUDING MANY FOREIGN INVESTORS. THESE EXPROPRIATIONS WERE OSTENSIBLY MADE FOR PUBLIC PURPOSES, BUT SEVERAL WERE UNCOVERED AS POLITICAL PAYOFFS. THE GOVERNMENT HAS SUBSEQUENTLY STRENGTHENED THE MINISTRY OF NATURAL RESOURCES TO PREVENT ABUSES AND MADE A GOOD FAITH EFFORT TO SETTLE CLAIMS. NEVERTHELESS, ALTHOUGH BELIZEAN LAW REQUIRES THAT THE GOVERNMENT ASSESS AND PAY APPROPRIATE COMPENSATION BASED ON FAIR MARKET VALUE, SUCH COMPENSATION CAN OFTEN TAKE YEARS TO SETTLE. THE GOVERNMENT OF BELIZE ALLOCATES A VERY SMALL AMOUNT OF ITS ANNUAL BUDGET TO PAYING THE LARGE AND GROWING AMOUNT OF UNPAID PROPERTY CLAIMS.
DISPUTE SETTLEMENT:
SINCE 1967, BELIZE HAS RECOGNIZED AMONG ITS NATIONAL LEGAL STATUTES THE ARBITRATION ACT (INTERNATIONAL INVESTMENT DISPUTES) OF 1966 OF THE UNITED KINGDOM. THE ACT ESTABLISHES THE MACHINERY FOR ARBITRATION IN CASE OF DISPUTES AND COMPENSATION IS BINDING. HOWEVER, IN RECENT YEARS, THERE HAVE BEEN NO CASES THAT HAVE APPLIED THIS LAW, BECAUSE MOST INDIVIDUAL CONTRACTS INCLUDE A CLAUSE THAT PROVIDES FOR BINDING ARBITRATION.
PERFORMANCE REQUIREMENTS AND INCENTIVES:
THE GOB OFFERS A NUMBER OF FISCAL AND OTHER INCENTIVES IN ORDER TO ATTRACT PRIVATE INVESTMENT. FOUR OF THE MOST POPULAR INCENTIVES SCHEMES INCLUDE: (A) THE FISCAL INCENTIVES ACT, (B) INTERNATIONAL BUSINESS AND PUBLIC INVESTMENT COMPANIES ACT, (C) EXPORT PROCESSING ZONE ACT, AND (D) COMMERCIAL FREE ZONE ACT.
UNDER THE FISCAL INCENTIVES ACT, A MINIMUM INVESTMENT OF $125,000 MUST BE MADE TO QUALIFY FOR A DEVELOPMENT CONCESSION. CONCESSIONS ARE EVALUATED BASED ON THE INVESTMENT'S CONTRIBUTION TO THE BELIZEAN ECONOMY AND ITS APPROPRIATENESS IN TERMS OF THE GOVERNMENT'S DEVELOPMENT PLAN. INVESTMENT INCENTIVES INCLUDE:
- TAX HOLIDAY PERIODS FOR UP TO 25 YEARS;
- EXEMPTION FROM IMPORT DUTIES ON CAPITAL EQUIPMENT, AS WELL AS ON IMPORTS FOR EXPORT PRODUCTION (DUTY EXEMPTION IS NOT AVAILABLE ON PERSONAL-USE PASSENGER CARS OR FUEL);
- EXEMPTION FROM TAX ON PROFITS EARNED DURING THE TAX HOLIDAY (UP TO AN AMOUNT EQUIVALENT TO THE SHAREHOLDER'S INVESTMENT);
- GUARANTEED REPATRIATION OF INITIAL INVESTMENT AS WELL AS PROFITS AND RETURNS FROM CAPITAL GAINS;
- CARRYING FORWARD OF NET LOSSES INCURRED DURING THE TAX HOLIDAY IS PERMITTED UPON EXPIRATION OF THE HOLIDAY; AND
- RENTAL OF FACTORY SHELLS IN AN INDUSTRIAL ESTATE ON CONCESSIONARY TERMS, WHEN AVAILABLE.
- THE LENGTH AND EXTENT OF A DEVELOPMENT CONCESSION IS DETERMINED BY SEVERAL FACTORS, INCLUDING: (A) THE EXTENT OF LOCAL VALUE ADDED; (B) THE PROJECTED PROFITABILITY OF THE ENTERPRISE; (C) FOREIGN EXCHANGE EARNINGS OR SAVINGS; AND (D) EMPLOYMENT OPPORTUNITIES CREATED.
UNDER THE INTERNATIONAL BUSINESS COMPANY (IBC) INITIATIVE, IBC'S, ALSO KNOWN AS OFFSHORE COMPANIES, ARE NOT ALLOWED TO OWN PROPERTY OR CONDUCT BUSINESS IN BELIZE, BUT NONETHELESS ENJOY A HOST OF INCENTIVES, INCLUDING TAX EXEMPTIONS ON THE FOLLOWING:
- ALL INCOME OF AN IBC;
- ALL DIVIDENDS OR OTHER DISTRIBUTIONS PAID BY AN IBC TO PERSONS RESIDENT IN BELIZE OR ELSEWHERE;
- ALL INTEREST, RENT, ROYALTIES, COMPENSATION AND OTHER AMOUNTS PAID BY AN IBC TO PERSONS WHO ARE NOT RESIDENT IN BELIZE;
- CAPITAL GAINS REALIZED WITH RESPECT TO ANY SHARES, DEBT OBLIGATIONS, OR OTHER SECURITIES OF AN IBC BY PERSONS WHO ARE NOT RESIDENT IN BELIZE.
BELIZE'S MAIN EXPORT PROCESSING ZONE INCENTIVES INCLUDE:
- FULL IMPORT DUTY EXEMPTION, EXTENDING TO ALL SPARE PARTS, OFFICE FURNITURE, CAPITAL EQUIPMENT, INTERMEDIATE GOODS AND SERVICE VEHICLES UTILIZED INSIDE THE EPZ;
- EXEMPTION FROM CAPITAL GAINS TAX, PROPERTY AND LAND TAX, VALUE-ADDED TAX, SALES AND CONSUMPTION TAX, TRADE TURNOVER, EXCISE TAX, FOREIGN EXCHANGE TAX, AND TRANSFER TAX;
- A GUARANTEED INCOME TAX HOLIDAY OF 20 YEARS WITH AN OPTION TO EXTEND AND TO DEDUCT LOSSES FROM PROFITS FOLLOWING THE TAX HOLIDAY PERIOD;
- DIVIDEND TAX EXEMPTION IN PERPETUITY;
- OPPORTUNITY TO OPEN FOREIGN CURRENCY BANK ACCOUNTS IN BELIZE AND ABROAD;
- OPPORTUNITY TO SELL, LEASE, OR TRANSFER ITEMS, GOODS, AND SERVICES WITHIN AN EPZ;
- CUSTOMS INSPECTION AT THE ZONE FOR EXPEDIENCY;
- WORK PERMITS AT NO COST FOR ALL PROFESSIONAL AND TECHNICAL STAFF AND, IF NECESSARY, FOR A 20 PERCENT FOREIGN WORKFORCE;
- NO QUOTAS ON IMPORTS OR ANY RAW MATERIAL RESTRICTIONS;
- NO TRADE, IMPORT, OR EXPORT LICENSE REQUIREMENTS.
BELIZE'S MAIN COMMERCIAL FREE ZONE INCENTIVES INCLUDE THE FOLLOWING:
- ALL MERCHANDISE, ARTICLES, OR OTHER GOODS ENTERING A CFZ FOR COMMERCIAL PURPOSES SHALL BE EXEMPT FROM IMPORT DUTIES AND REVENUE REPLACEMENT DUTIES;
- ALL FUEL AND GOODS INCLUDING BUILDING MATERIALS, FURNITURE, EQUIPMENT, SUPPLIES AND PARTS REQUIRED FOR THE PROPER FUNCTIONING OF A CFZ BUSINESS SHALL BE EXEMPT FROM ALL DUTIES AND TAXES MENTIONED ABOVE;
- ALL IMPORTS AND EXPORTS OF A CFZ TO OR FROM WHATEVER DESTINATION SHALL BE EXEMPT FROM ALL CUSTOMS DUTIES, CONSUMPTION TAXES, EXCISE TAXES, INTRANSIT TAXES, EXPORT TAXES, OR VALUE-ADDED TAXES, EXCEPT THOSE DESTINED FOR AND DIRECTLY ENTERING AREAS SUBJECT TO THE NATIONAL CUSTOMS TERRITORY;
- NO RESTRICTIONS SHALL BE MADE ON FOREIGN EXCHANGE INCLUDING THE SALE OF FOREIGN CURRENCY OR THE TRANSFER OF FOREIGN EXCHANGE INTO, OUT OF OR WITHIN A CFZ BY CFZ BUSINESSES;
- EACH CFZ BUSINESS SHALL OPEN AN ACCOUNT IN ANY CURRENCY WITH A DULY REGISTERED BANK OF ITS CHOICE WHICH IS LOCATED IN THE CFZ;
- DURING THE FIRST FIVE YEARS OF ITS OPERATION, A CFZ BUSINESS SHALL BE EXEMPT FROM INCOME TAX OR CAPITAL GAINS TAX OR ANY NEW CORPORATE TAX LEVIED BY THE GOB, AND ANY DIVIDENDS PAID BY A CFZ BUSINESS SHALL BE EXEMPT FROM SUCH TAX FOR THE FIRST 20 YEARS OF ITS OPERATION; AND
- WHERE A CFZ BUSINESS INCURS A TOTAL NET LOSS OVER THE FIVE YEAR TAX HOLIDAY, THAT LOSS MAY BE CARRIED FORWARD AND DEDUCTED AGAINST PROFITS IN THE THREE YEARS FOLLOWING THE TAX HOLIDAY PERIOD.
APPLICATION AND SCREENING PROCESS:
INVESTORS INTERESTED IN OBTAINING A DEVELOPMENT CONCESSION UNDER THE FISCAL INCENTIVES ACT ARE REQUIRED BY LAW TO INCORPORATE THEIR COMPANIES IN BELIZE. THE APPLICATION FORM FOR A DEVELOPMENT CONCESSION SHOULD BE SUBMITTED TO THE MINISTRY OF ECONOMIC DEVELOPMENT IN TRIPLICATE ALONG WITH THE FOLLOWING DOCUMENTS:
- COPY OF THE COMPANY'S ARTICLES OF ASSOCIATION;
- COPY OF THE COMPANY'S MEMORANDUM OF ASSOCIATION;
- COPY OF THE CERTIFICATE OF INCORPORATION;
- BANKER'S REFERENCE ON THE BANK'S OFFICIAL LETTER-HEAD;
- LAND TENURE DEED;
- PRO FORMA PROFITABILITY STATEMENT UP TO THE SECOND YEAR OF FULL PRODUCTION; - LIST OF ITEMS REQUESTED FOR DUTY EXEMPTIONS; AND
- DETAILS OF LOCAL INPUTS.THE MINISTRY OF ECONOMIC DEVELOPMENT ESTIMATES THAT THE DEVELOPMENT CONCESSION APPROVAL PROCESS TAKES ABOUT SIXTY DAYS AFTER APPLICATIONS HAVE BEEN SUBMITTED. THESE CONCESSIONS ARE VALID FOR UP TO 25 YEARS FOR EXPORT INDUSTRIES EXCLUSIVELY OR FOR 5 YEARS WITH AN OPTION FOR RENEWAL OF UP TO 10 YEARS FOR OTHER INDUSTRIES. THE CONCESSIONS NORMALLY INCLUDE PROVISIONS FOR TAX HOLIDAYS AND RELIEF FROM IMPORT DUTIES ON CAPITAL EQUIPMENT AND RAW MATERIALS.
FEES FOR THESE DEVELOPMENT CONCESSIONS VARY DEPENDING ON THE AMOUNT OF THE PROPOSED INVESTMENT CAPITAL. IF THE INVESTMENT IS NOT LESS THAN $125,000 AND DOES NOT EXCEED $250,000, THERE IS AN APPLICATION FEE OF $2,500; IF THE INVESTMENT IS NOT LESS THAN $250,000 AND DOES NOT EXCEED $375,000, THE APPLICATION FEE IS $3,000; AND IF THE INVESTMENT EXCEEDS $375,000, THE APPLICATION FEE IS $3,500. APPLICATION FEES ARE NONREFUNDABLE.
INVESTORS INTERESTED IN ESTABLISHING A BUSINESS IN AN EXPORT PROCESSING ZONE MUST FIRST APPLY TO THE DIRECTOR OF THE EPZ UNIT IN THE MINISTRY OF TRADE AND INDUSTRY FOR EPZ STATUS. INVESTORS ARE REQUIRED TO SUBMIT THE FOLLOWING:
- COVER LETTER WITH GENERAL DESCRIPTION OF THE PROJECT;
- TWO BANK REFERENCES ON THE COMPANY'S MAIN PARTNERS;
- COMPANY'S MEMORANDUM AND ARTICLES OF ASSOCIATION AND CERTIFICATE OF REGISTRATION FOR A LIMITED LIABILITY COMPANY;
- COMPLETED GENERAL INFORMATION FORMS; AND
- BUSINESS PLAN WITH:
- FIVE-YEAR CASH FLOW PROJECTION;
- FLOW CHART OF PRODUCTION PROCESS WITH WASTE AND POLLUTION MANAGEMENT PLAN;
- MARKETING PLAN FOR ACHIEVING 100 PERCENT EXPORT SALES;
- ORGANIZATIONAL MANAGEMENT CHART.THE COMMERCIAL FREE ZONE ACT STIPULATES THAT AN INVESTOR DESIRING OF ESTABLISHING A BUSINESS WITHIN A CFZ MUST SUBMIT THE FOLLOWING:
- COPIES OF THE COMPANY'S MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION AND CERTIFICATE OF INCORPORATION;
- TWO BANK REFERENCES ON THE COMPANY AND ITS PARTNERS;
- ONE COMMERCIAL REFERENCE ON THE COMPANY AND ITS MAJOR SHAREHOLDERS; AND
- A PROJECT PROPOSAL INCLUDING:
- COMPANY PROFILE;
- PHYSICAL MASTER PLAN SHOWING OVERALL LAYOUT;
- PROPOSED CONSTRUCTION SCHEDULE;
- CAPITAL COST ESTIMATE;
- STAFF AND MANAGEMENT ORGANIZATION;
- FIVE-YEAR FINANCIAL PROJECTIONS, INCLUDING LEASING OR SALE ARRANGEMENT PLAN;
- A PROCEDURAL MANUAL DESCRIBING INVENTORY CONTROL AND RECORDKEEPING IN ACCORDANCE WITH INTERNATIONALLY ACCEPTED
ACCOUNTING PRINCIPLES TO BE USED BY THE COMPANY; AND
- A FORMAL COVER LETTER OF APPLICATION.RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT:
THE BELIZE INVESTMENT GUIDE STATES THAT WHILE GOVERNMENT SUPPORTS AND ENCOURAGES JOINT VENTURE AND PARTNERSHIP INVESTMENTS AS A PREFERRED MECHANISM FOR INVESTMENT, IT DOES ALLOW 100 PERCENT FOREIGN OWNERSHIP OF AN ENTERPRISE. WHILE NON-BELIZEANS CAN INVEST IN ANY SECTOR OF THE ECONOMY, CERTAIN ACTIVITIES REQUIRE SPECIAL PERMITS AND LICENSES, WHICH MAY NOT BE GRANTED TO NON-BELIZEANS. THESE RESTRICTED ACTIVITIES ARE LISTED IN "SECTORS CLOSED TO FOREIGN DIRECT INVESTMENT" ABOVE. IN ADDITION, FOREIGNERS MUST OBTAIN APPROVAL FROM THE MINISTER OF NATURAL RESOURCES IN ORDER TO PURCHASE OR HOLD LAND IN EXCESS OF HALF AN ACRE FOR URBAN AREAS OR IN EXCESS OF TEN ACRES FOR RURAL AREAS.
PROTECTION OF PROPERTY RIGHTS:
THE CONSTITUTION OF BELIZE PROTECTS THE RIGHT TO PRIVATE PROPERTY. CHAPTER II, ARTICLE (3A) GUARANTEES "PROTECTION FROM ARBITRARY DEPRIVATION OF PROPERTY." AMONG OTHER DOCUMENTS, RECORDS OF COMPANIES AND REAL ESTATE MORTGAGES ARE KEPT IN THE GOVERNMENT'S GENERAL REGISTRY OFFICE.
THERE ARE MANY PROPERTY DISPUTES INVOLVING FOREIGN INVESTORS AND OTHER LAND OWNERS, BECAUSE IT IS OFTEN DIFFICULT TO RELIABLY TRACE THE OWNERSHIP HISTORY OR SPECIFIC BORDERS OF LAND HOLDINGS. TITLE INSURANCE IS NOT COMMONLY AVAILABLE IN BELIZE. GENERALLY, AS IN THE U.S., PROPERTY BUYERS WILL AVOID PROBLEMS BY DEALING WITH REPUTABLE REAL ESTATE PROFESSIONALS AND LAWYERS EXPERIENCED IN LOCAL PROPERTY LAW.
REGARDING INTELLECTUAL PROPERTY RIGHTS (IPR), AS DISCUSSED IN SECTION IV ABOVE, BELIZE IS A MEMBER OF THE UNIVERSAL COPYRIGHT CONVENTION, BUT NOT A MEMBER OF THE WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO) NOR OF THE BERN CONVENTION ON COPYRIGHTS. BELIZEAN STATUTES GOVERNING PATENTS, DESIGNS, TRADEMARKS AND COPYRIGHTS ARE BASED ON THE UNITED KINGDOM STATUTES WHICH PREVAIL THROUGHOUT THE ENGLISH-SPEAKING CARIBBEAN. HOWEVER, THE GOB VIEWS IPR AS TWO SEPARATE ISSUES: 1) IPRS FOR COPYRIGHT PROTECTION, AND 2) INDUSTRIAL PROPERTY PROTECTION THROUGH TRADEMARKS AND PATENTS. ALTHOUGH BELIZE HAS A LEGAL FRAMEWORK WHICH PROVIDES MINIMAL PROTECTION FOR TRADEMARKS AND PATENTS, THE WORKS OF ARTISTS AND WRITERS STILL REMAIN LARGELY UNPROTECTED. FOR INSTANCE, MUSIC AND VIDEO STORES IN BELIZE ARE FULL OF HAND-COPIED TAPES FOR SALE OR RENT. IN ADDITION, LEGAL PROTECTIONS FOR TELEVISED MATERIALS, BASED ON A 1956 COPYRIGHT LAW, ARE SERIOUSLY INADEQUATE. LOCAL TELEVISION STATIONS AND CABLE COMPANIES REGULARLY PIRATE AMERICAN TELEVISION NETWORKS AND CABLE CHANNELS WITH IMPUNITY.
REGULATORY SYSTEM - LAWS AND PROCEDURES:
BELIZE'S LAWS AND REGULATIONS ON TAX, LABOR, CUSTOMS, AND HEALTH AND SAFETY DO NOT SIGNIFICANTLY DISTORT OR IMPEDE THE EFFICIENT MOBILIZATION AND ALLOCATION OF INVESTMENT CAPITAL. HOWEVER, SOME INVESTORS HAVE FOUND A LACK OF TRANSPARENCY IN THE ADMINISTRATION OF SOME BELIZEAN LAWS AND PROCEDURES, SUCH AS COMPULSORY ACQUISITION OF LAND, INVESTMENT INCENTIVE PROGRAMS AND IMPORT LICENSES.
ALTHOUGH MANY BASIC COMMODITIES HAVE GOVERNMENT PRICE CONTROLS (E.G., RICE AND FLOUR), BELIZE'S REGULATIONS LARGELY ENCOURAGE COMPETITION. THERE IS ALSO A LIST OF 27 CATEGORIES OF PRODUCTS WHICH REQUIRE IMPORT LICENSES PRIOR TO IMPORTATION INTO BELIZE. THE MINISTRY OF COMMERCE AND INDUSTRY, HOWEVER, HAS STATED THAT IT WILL SOON SUBMIT FOR CABINET'S APPROVAL A PLAN FOR THE GRADUAL REMOVAL OF THIS QUANTITATIVE RESTRICTIVE POLICY. SIMILARLY, EXPORTERS HAVE TO ACQUIRE AN EXPORT PERMIT AND EITHER A ZOOSANITARY OR PHYTOSANITARY CERTIFICATE TO BE ABLE TO EXPORT CERTAIN AGRICULTURAL PRODUCTS, SUCH AS FRESH FRUITS, LIVESTOCK, AND MARINE PRODUCTS.
FOREIGN CURRENCY TRANSACTIONS COME UNDER THE EXCLUSIVE CONTROL OF THE CENTRAL BANK OF BELIZE (CBB). IN ORDER TO PAY FOR GOODS AND SERVICES PROCURED OUTSIDE OF BELIZE IN A FOREIGN CURRENCY, A FOREIGN EXCHANGE PERMIT MUST BE OBTAINED FROM AN AUTHORIZED DEALER OR DIRECTLY FROM CBB. THE CBB ALSO HAS TO GRANT APPROVAL TO BUSINESSPEOPLE OR FIRMS WHO WISH TO SECURE A LOAN FROM OUTSIDE BELIZE WHICH INVOLVES A FOREIGN CURRENCY, AND FOR THESE BUSINESSPEOPLE OR FIRMS TO BE ABLE TO SERVICE REPAYMENT OF THE LOAN. IN ADDITION, FOREIGN INVESTORS ARE REQUIRED TO REGISTER ANY INVESTMENTS MADE IN BELIZE WITH CBB IN ORDER TO FACILITATE THE REPATRIATION OF PROFITS, DIVIDEND, ETC. OFFICIALLY, NO PERSON, OTHER THAN AUTHORIZED DEALERS AND AUTHORIZED DEPOSITORIES, MAY RETAIN ANY FOREIGN CURRENCY IN THEIR POSSESSION WITHOUT THE CONSENT OF CBB.
EFFICIENT CAPITAL MARKETS:
BELIZE'S FINANCIAL SYSTEM IS SMALL BUT SOUND. IT IS LIMITED TO FOUR COMMERCIAL BANKS, A PARASTATAL LENDING INSTITUTION (THE DEVELOPMENT FINANCE CORPORATION), AND SEVERAL SMALL CREDIT UNIONS NATIONWIDE. THE CENTRAL BANK OF BELIZE REGULATES THE LIQUIDITY AND CASH RESERVE REQUIREMENTS AS WELL AS THE INTEREST RATE STRUCTURE OF THE COMMERCIAL BANKS. INTEREST RATES IN BELIZE ARE RELATIVELY HIGH. CURRENT PRIME LENDING RATES OF LOCAL BANKS ARE HIGH, RANGING FROM 15 PERCENT FOR MORTGAGE LOANS TO 17 PERCENT FOR PERSONAL LOANS. THE WEIGHTED AVERAGE IN 1998 WAS 16.5 PERCENT. IN 1998, THE CENTRAL BANK OF BELIZE LOOSENED CREDIT CONDITIONS BY DECREASING RESERVE REQUIREMENTS BY 2 PERCENT POINTS TO 24 PERCENT OF DEPOSITS. IT IS EXPECTED THAT GROWTH RATE OF CREDIT TO THE PRIVATE SECTOR WILL INCREASE IN 1999.
THE GOB HAS ENCOURAGED THE FORMATION OF A LOCAL CAPITAL MARKET. A COUNTER AT THE CENTRAL BANK HAS BEEN ESTABLISHED TO TRADE BELIZE TREASURY BILLS AND NOTES, BELIZE ELECTRICITY LIMITED (BEL) SHARES, AND BELIZE DEFENCE FORCE BONDS. IN GENERAL, FOREIGN INVESTORS ARE WELCOME TO INVEST IN THESE BUSINESS OPPORTUNITIES.
POLITICAL ENVIRONMENT:
BELIZE HAS TRADITIONALLY ENJOYED ONE OF THE MOST STABLE POLITICAL ENVIRONMENTS IN THE REGION.
CORRUPTION:
AS WITH MOST COUNTRIES IN THE REGION, CORRUPTION REMAINS A PROBLEM IN BELIZE. BELIZE'S FIRST STEP TO COMBAT CORRUPTION IN PUBLIC LIFE CAME WITH THE HIRING OF A PARLIAMENTARY COMMISSIONER ON JUNE 25, 1999. THE PARLIAMENTARY COMMISSIONER, TO BE KNOWN AS OMBUDSMAN, WILL HAVE THE PRIMARY RESPONSIBILITY OF INVESTIGATING ANY ADMINISTRATIVE ACTION AND COMPLAINTS OF OFFICIAL CORRUPTION AND WRONGDOING.
THE PREVENTION OF CORRUPTION IN PUBLIC LIFE ACT WAS ENACTED IN 1994. THIS ACT MAKES PROVISION FOR THE PREVENTION OF POLITICAL CORRUPTION AND TO PROVIDE FOR THE PUBLIC DISCLOSURE OF THE ASSETS, INCOME AND LIABILITIES OF PERSONS IN PUBLIC LIFE, SUCH AS THE GOVERNOR-GENERAL AND MEMBERS OF THE NATIONAL ASSEMBLY. IT ALSO SEEKS TO STRENGTHEN THE CODE OF CONDUCT PRESCRIBED IN THE CONSTITUTION.
THERE ARE OCCASIONAL REPORTS OF REQUESTS FOR BRIBES FROM CUSTOMS OFFICIALS IN ORDER TO FACILITATE LOWER VALUATIONS AND THUS LOWER IMPORT DUTIES. BRIBERY IS OFFICIALLY CONSIDERED A CRIMINAL ACT IN BELIZE, BUT LAWS AGAINST BRIBERY ARE RARELY ENFORCED. THE OFFICE OF THE ATTORNEY GENERAL IS RESPONSIBLE FOR COMBATING CORRUPTION. UNDER U.S. LAW, AMERICAN COMPANIES AND THEIR AFFILIATES ARE SUBJECT TO THE FOREIGN CORRUPT PRACTICES ACT, WHICH STRICTLY PROHIBITS THE BRIBERY OF FOREIGN OFFICIALS.
THE GOB HAS INDICATED THAT IT WILL SIGN THE INTER-AMERICAN CONVENTION ON CORRUPTION AND SUPPORT THE REVIVAL OF THE COMMITTEE ON PUBLIC PROBITY AND ETHNICS. THIS COMMITTEE WILL BE EMPOWERED TO REVIEW IMPLEMENTATION OF THE CONVENTION. IN ADDITION, AS A GESTURE OF GOOD INTENTIONS TO COMBAT CORRUPTION IN GOVERNMENT, BELIZE'S PRIME MINISTER ATTENDED MAY 3-5, 1999, A CONFERENCE ON "TRANSPARENCY FOR GROWTH IN THE AMERICAS" ORGANIZED BY THE CARTER CENTER. HE WAS AN ACTIVE DISCUSSANT ON CONCRETE STRATEGIES TO IMPROVE TRANSPARENCY AND COMBAT CORRUPTION.
BILATERAL INVESTMENT AGREEMENTS:
BELIZE HAS NO BILATERAL INVESTMENT TREATY OR TAX TREATY WITH THE UNITED STATES.
OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS:
THE OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC) OFFERS POLITICAL RISK INSURANCE, WHICH INCLUDES COVERAGE FOR EXCHANGE INCONVERTIBILITY, EXPROPRIATION, AND WAR. OPIC ALSO OFFERS FINANCING FOR QUALIFIED INVESTMENTS AND IS INVOLVED IN SEVERAL AMERICAN INVESTMENTS IN BELIZE. BELIZE IS A MEMBER OF THE INTER-AMERICAN DEVELOPMENT BANK (IDB) AND THE MULTILATERAL INVESTMENT GUARANTEE AGENCY (MIGA) OF THE WORLD BANK.
LABOR:
BELIZE HAS A TOTAL POPULATION OF ONLY 239,000 (1998 ESTIMATE). OF THIS TOTAL AMOUNT, ABOUT 92,100 OR 38 PERCENT IS BELOW WORKING AGE. MANY OTHER RESIDENTS, SUCH AS SUBSISTENCE FARMERS, ARE NOT COUNTED IN THE TOTAL LABOR FORCE ESTIMATE OF 85,595. AT THE END OF 1998, BELIZE HAD A TOTAL OF 12,250 UNEMPLOYED PERSONS -- ACCOUNTING FOR AN UNEMPLOYMENT RATE OF 14.3 PERCENT. ABOUT 7,650 WORKERS, MAINLY PUBLIC SECTOR EMPLOYEES, ARE UNIONIZED. IN GENERAL, LABOR-MANAGEMENT RELATIONS ARE RELATIVELY GOOD.
FOREIGN INVESTORS WHO HAVE A DEVELOPMENT CONCESSION ARE PERMITTED TO BRING IN SKILLED PERSONNEL TO COMPLEMENT THEIR LOCAL LABOR FORCE, PROVIDED THAT APPROPRIATE TRAINING PROGRAMS FOR BELIZEAN NATIONALS ARE ESTABLISHED. MOST OF THE UNSKILLED OR SEMI-SKILLED WORKERS IN COMMERCIAL AGRICULTURE ARE RECENT IMMIGRANTS OR MIGRANT WORKERS FROM NEIGHBORING SPANISH-SPEAKING COUNTRIES.
THERE IS A NATIONAL MINIMUM WAGE OF BZDOLS 2.25 (USD 1.13) PER HOUR FOR MANUAL LABOR AND BZDOLS 2.00 (USD 1.00) PER HOUR FOR AGRICULTURE AND EXPORT INDUSTRIES. THE WAGE SCALE IN BELIZE IS THE HIGHEST IN THE REGION.
FOREIGN TRADE ZONES:
THE 1990 EXPORT PROCESSING ZONE (EPZ) ACT OF BELIZE ENABLES COMPANIES TO OPERATE WITHIN SPECIAL OR GENERAL EXPORT PROCESSING ZONES IN THE COUNTRY. SPECIAL EPZS ARE ENCLOSED ONE-FACTORY OPERATIONS AND GENERAL EPZS ARE ENCLOSED MULTI-FACTORY OPERATIONS.
THE COMMERCIAL FREE ZONE (CFZ) ACT OF 1995 PROVIDES FOR THE ESTABLISHMENT AND OPERATION OF CFZS WITHIN BELIZE TO FOSTER COMMERCIAL TRADE AND INVESTMENT WITH NEIGHBORING COUNTRIES. BUSINESS ENTERPRISES GENERALLY ENCOURAGED UNDER THE CFZ SCHEME INCLUDE COMMERCIAL OFFICES, WAREHOUSES, MANUFACTURING, INSURANCE SERVICES, AND FINANCIAL SERVICES.
CAPITAL OUTFLOW POLICY:
THE GOVERNMENT GENERALLY ENCOURAGES LOCAL BUSINESSES TO REINVEST CAPITAL, BUT HAS A LIBERAL POLICY TOWARD CAPITAL OUTFLOWS. THE BELIZE INVESTMENT GUIDE STATES THE GOVERNMENT'S COMMITMENT TO GUARANTEED REPATRIATION OF INVESTMENT AS WELL AS PROFITS AND RETURNS FROM CAPITAL GAINS. INVESTORS SHOULD NOTE THAT THIS POLICY IS DEPENDENT ON THE AVAILABILITY OF FOREIGN EXCHANGE IN THE LOCAL FINANCIAL SYSTEM.
MAJOR FOREIGN INVESTORS:
THE 10 LARGEST AMERICAN INVESTMENTS IN BELIZE (FIGURES ARE IN U.S. DOLLARS) FOLLOWS:
1. BECOL - BELIZE ELECTRIC COMPANY LTD. (95 PERCENT U.S.- OWNED)
SECTOR: ENERGY (HYDROELECTRICITY)
DATE ESTABLISHED: 1994
AMOUNT INVESTED: $57 MILLION (OF $60 MILLION TOTAL)2. BELIZE TELECOMMUNICATIONS LIMITED (23.5 PERCENT U.S.-OWNED)
SECTOR: TELECOMMUNICATIONS
DATE ESTABLISHED: 1987 (DATE OF U.S. INVESTMENT: 1995)
AMOUNT INVESTED: $20 MILLION (OF $85 MILLION TOTAL)3. BARTON CREEK FARMS LTD.
SECTOR: AGRICULTURE (CITRUS)
DATE ESTABLISHED: 1990
TOTAL AMOUNT INVESTED: $14 MILLION4. ESSO STANDARD OIL S.A. LTD. - BELIZE
SECTOR: IMPORTER (PETROLEUM PRODUCTS)
DATE ESTABLISHED: 1954
TOTAL AMOUNT INVESTED: $9.6 MILLION5. YALBAC RANCH AND CATTLE CORPORATION (BELIZE) LTD.
SECTOR: TIMBER AND AGRICULTURE (CITRUS, CATTLE)
DATE ESTABLISHED: 1986
TOTAL AMOUNT INVESTED: $8 MILLION6. ADM BELIZE MILLS LTD.
SECTOR: AGRO-PROCESSING
DATE ESTABLISHED: 1974
TOTAL AMOUNT INVESTED: $7 MILLION7. NOVA COMPANIES (BELIZE) LTD.
SECTOR: AQUACULTURE (SHRIMP)
DATE ESTABLISHED: 1989
TOTAL AMOUNT INVESTED: $6 MILLION8. RAMON'S VILLAGE (REEF RESORTS LTD.)
SECTOR: TOURISM
DATE ESTABLISHED: 1981
TOTAL AMOUNT INVESTED: $5 MILLION9. TEXACO BELIZE LTD.
SECTOR: IMPORTER (PETROLEUM PRODUCTS)
DATE ESTABLISHED: 1964
TOTAL AMOUNT INVESTED: $4.5 MILLION10. WILLIAMSON INDUSTRIES, LTD.
SECTOR: MANUFACTURING (GARMENTS)
DATE ESTABLISHED: 1961
TOTAL AMOUNT INVESTED: 2.5 MILLION
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