Transparency of the Regulatory System
Regulatory authority exists both at the local and national levels with national laws and regulations being most relevant to foreign businesses. Despite these measures, some investors complain that the regime for incentives did not always meet their needs, that land titles are not always reliable and secure, and that bureaucratic delays or corruption can be hindrances to doing business in Belize.
There are quasi-governmental organizations mandated by law to manage specified regulatory processes on behalf of the Government of Belize, e.g. the Belize Tourism Board, BELTRAIDE, and the Belize Agricultural Health Authority. There are no reports that these processes significantly distort or discriminate against foreign investors.
The cabinet dictates government policies that are enacted by the legislature and implemented by the various government ministries. Regulations exist at the local level, primarily relating to property taxes and registering for trade licenses to operate businesses in the municipality.
Accounting, legal, and regulatory systems are consistent with international norms. Publicly owned companies are generally audited annually and the reports are prepared in accordance with International Financial Reporting Standards and International Standards on Auditing.
The mechanism for drafting bills, regulations and enacting legislation generally apply across the board and apply to investment laws and regulations. The government publishes in the Gazette, proposed as well as enacted laws and regulations that are publicly available for a minimal fee.
Draft bills are generally open to public comment. Once introduced in the House of Representatives, they are sent to Standing Committees of the House of Representatives, which then meet and invite the public and interested persons to review, recommend changes, or object to draft laws prior to further debate. Public comments on draft legislation are not generally posted online nor made publicly available. It would be the prerogative of an interested party to attend public consultations, committee meetings, or to request the public comments from the National Assembly or relevant Ministry. Additionally, laws are sometimes passed quickly without meaningful publication, public review or public debate; as was the case with the Central Bank of Belize (International Immunities Act) and the Crown Proceedings (Amendment Act) of 2017.
Government ministries also make available policies, laws, and regulations pertinent to their portfolio available on their respective ministry websites. Since 2016, enacted laws have been published on the website of the National Assembly. There is however, a delay in updating the website.
Regulations and enforcement actions are appealable with regulatory decisions subject to judicial review. There have been no regulatory systems including enforcement reforms announced in the last year.
Information on the public finance, the government’s budget and debt obligations (including explicit and contingent liabilities) are widely accessible to the general public, with most documents available online.
International Regulatory Considerations
As a full member of the Caribbean Community (CARICOM), Belize’s foreign, economic and trade policies vis-a-vis non-members are coordinated regionally. The country’s import tariffs are largely defined by CARICOM’s Common External Tariff.
Belize is also a member of several other treaties because of its CARICOM membership. A primary example is the Economic Partnership Agreement (EPA) between CARIFORUM and the European Union (EU). In the wake of Brexit, these countries also signed a CARIFORUM – United Kingdom Economic Partnership Agreement in March 2019. The latter agreement is expected to come into effect by January 2021or soon after the UK leaves the EU.
Outside of CARICOM, Belize is a member of the Central American Integration System (SICA) at a political level, but is not a part of the Secretariat of Central American Economic Integration (SIECA) that supports economic integration of Central America.
Belize is also a member of the WTO and adheres to the organization’s agreements and reporting system. The Belize Bureau of Standards (BBS) is the national standards body responsible for preparing, promoting and implementing standards for goods, services, and processes. The BBS operates in in accordance with the WTO Agreement on Technical Barriers to Trade and the CARICOM Regional Organization for Standards and Quality. The BBS is also a member of the International Electrotechnical Commission (IEC), the International Organization for Standardization (ISO), and Codex Alimentarius.
Legal System and Judicial Independence
The Belize Constitution, is the supreme law and is founded on the principle of separation of powers with independence of the judiciary from the executive and legislative branches of government. As a former British colony, Belize follows the English Common Law legal system, which is based on established case law. Belize has a written Contract Act, supported by precedents from the national courts as well as from the wider English speaking and Commonwealth case law. Contracts are enforced through the courts.
General information relating to Belize’s judicial and legal system, including links to Belize’s Constitution, Laws and judicial decisions are available at the Judiciary of Belize website www.belizejudiciary.org . There are specialized courts that deal with family related matters including divorce and child custody, but no specialized courts to deal with commercial disputes or cases.
The current judicial process continues to face challenges including frequent adjournments, delays, and a backlog of cases. Several measures are being implemented to improve the country’s judiciary. The training of mediators and the introduction of court-connected mediation support alternative methods to dispute settlement. This effort along with better case management procedures is expected to decrease the court’s caseload, time delays, and cost particularly for smaller claim civil cases.
Regulations and enforcement actions are appealable. Regulatory decisions are also subject to judicial review. Judgments by the Belize Supreme Court and the Court of Appeal are available at http://www.belizejudiciary.org . In 2010, Belize adopted the Caribbean Court of Justice (CCJ) as its final appellate court on civil and criminal matters, replacing the Judicial Committee of the Privy Council of the United Kingdom. Judgments by the Caribbean Court of Justice, are available at http://www.caribbeancourtofjustice.org .
Laws and Regulations on Foreign Direct Investment
The country has an English Common Law legal system supplemented by local legislation and regulations. Enacted laws are generally available in the National Assembly’s website at www.nationalassembly.gov.bz . Examples of key legislation passed in 2018 include:
- Designated Processing Areas Act, 2018
- Income and Business Tax (Amendment) Act, 2018
- Stamp Duties (Amendment) Act, 2018
- International Business Companies (Amendment) Act, 2018
- Bill of Sales (Amendment) Act, 2018
- General Sales Tax (Amendment) Act, 2018
- Customs Excise Duties (Amendment), 2018
- International Financial Services Commission, 2018
The laws, rules, procedures, and reporting requirements related to investors differ depending on the nature of the investment. BELTRAIDE provides advisory services for foreign investors relating to procedures for doing business in Belize and incentives available to qualifying investors. Further information is available at the BELTRAIDE website: http://www.belizeinvest.org.bz
Competition and Anti-Trust Laws
Belize does not have any laws governing competition, but there are attempts to limit outside competition in certain industries (such as food and agriculture) by levying high import duties.
Expropriation and Compensation
The Government has used the right of eminent domain in several cases to appropriate private property, including land belonging to foreign investors. There were no new expropriation cases in 2018. However, there are allegations that several previous expropriations were done for personal or political gain. Belizean law requires that the government assess and compensate according to fair market value. Such expropriation cases can take several years to settle and there are a few cases where compensation is still pending. In the cases of expropriations, the claimants assert that the Government failed to adhere to agreements entered into by a previous administration.
The process to acquire land titles is open to abuse with numerous cases of land title manipulation involving foreigners and Belizeans. The government continues efforts at improving the land title system and in addressing delays in processing land transactions.
ICSID Convention and New York Convention
The Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) was extended to Belize by an act of the United Kingdom when Belize was a colony. After independence, Belize did not ratify the Convention nor is it listed as a contracting state. Nevertheless, the Arbitration Act governs arbitration and expressly incorporates three international conventions into domestic law. These conventions include the 1923 Geneva Protocol on Arbitration Clauses; the Convention on the Execution of Foreign Arbitral Awards; and the New York Convention. A 2013 Caribbean Court of Justice judgment also upheld the Arbitration Act giving effect to the New York Convention in domestic law.
Belize signed but has not ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID convention). For more information visit http://sice.oas.org/dispute/comarb/icsid/w_conv1.asp
Investor-State Dispute Settlement
Belize is signatory to various investment agreements which make provisions for the settlement of investor-state disputes. Belize is also a member of the CARICOM Single Market and Economy, as well as a party to two regional Economic Partnership Agreements (EPA): 1) between CARIFORUM and the EU; and 2) CARIFORUM and the United Kingdom. These regional arrangements make provisions for the settlement of investor-state disputes.
Since Belize is not a party to any Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with the United States, investment disputes involving U.S. persons are taken either before the courts or before international arbitration panels.
Local courts are empowered to recognize and enforce foreign arbitral awards against the government but these are generally challenged up to the CCJ. In January 2017, the Crown Proceedings (Amendment) Act and the Central Bank of Belize (International Immunities) Act were passed, which also affect the enforcement of foreign arbitral awards against the government. Essentially, the Crown Proceedings Amendment Act provides that if a foreign judgment is entered against the government and later declared as “unlawful, void or otherwise invalid” by a court in Belize, the foreign judgement would not be enforced in or outside Belize. The Act also provides for hefty penalties of fines and/or imprisonment on a person, individual or legal, seeking to enforce the foreign judgment. The Central Bank (International Immunities) Act restates the immunity of the Central Bank of Belize assets “from legal proceedings in other states.” This Act similarly provides for penalties of fines and/or imprisonment on a person, individual or legal, which initiates any such proceedings. Despite these legislative acts, there has not been a history of extrajudicial actions against foreign investors.
Over the past decade, the Government of Belize has been involved in numerous investment disputes with one involving a U.S. company. Most cases were initially entered in arbitration panels, but were eventually appealed either before the U.S. District Court of Colombia or the CCJ. The majority of the judgements went against the Government, which has settled some and continues to settle other cases.
International Commercial Arbitration and Foreign Courts
Belize’s Arbitration Act allows the Supreme Court of Belize to support and supervise dispute settlement between private parties by arbitration. In 2013, the Supreme Court also introduced the process of court-connected mediation as an alternative method to dispute settlement between private parties and as a means of reducing costs and duration of litigation.
Local courts are empowered to recognize and enforce foreign arbitral but these are generally challenged up to the CCJ, Belize’s highest appellate court.
There are numerous instances of cases involving State Owned Enterprises (SOEs) which went before domestic courts with rulings both in favor and against the SOE.
Chapter 244 of the Laws of Belize (Bankruptcy Act) provides and allows for bankruptcy filings. The Act provides for the establishment of receivership, trustees, adjudication and seizures of the property of the bankrupt. The court may order the arrest of the debtor as well as the seizure of assets and documents in the event the debtor may flee or avoid payment to creditors. The Act also provides for imprisonment on conviction of certain specified offenses. The Director of Public Prosecutions may also institute proceedings for offenses related to the bankruptcy proceedings.