Transparency of the Regulatory System
There are no reports that Government policies, processes and laws significantly distort or discriminate against foreign investors. Nonetheless, some investors have complained of systematic shortfalls including 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 hinder doing business in Belize. U.S. firms have also identified challenges in participating and competing in areas related to the bidding, procurement and dispute settlement processes, particular to SOEs.
There are no NGOs or private sector associations that manage regulatory processes. NGOs and private sector associations do lobby on behalf of their members but have no statutory authority.
Regulatory authority exists both at the local and national levels with national laws and regulations being most relevant to foreign businesses. The cabinet dictates government policies that are enacted by the legislature and implemented by the various government ministries. There are also quasi-governmental organizations mandated by law to manage specific regulatory processes on behalf of the Government of Belize, e.g. the Belize Tourism Board, BELTRAIDE, and the Belize Agricultural Health Authority. Regulations exist at the local level, primarily relating to property taxes and registering for trade licenses to operate businesses in the municipality.
Some supra-national organizations and regulatory structures exist. For example, some elements of international trade affecting U.S. businesses are affected by CARICOM treaties, as in the case of the export of sugar within CARICOM.
Accounting, legal, and regulatory systems are consistent with international norms. Publicly owned companies generally receive audits annually, and the reports are in accordance with International Financial Reporting Standards and International Standards on Auditing.
Draft bills or regulations are generally made available for public comment through a public consultation process. Once introduced in the House of Representatives, draft bills are sent to Standing Committees, which then meet and invite the public and interested persons to review, recommend changes, or object to draft laws prior to further debate. The mechanism for drafting bills, enacting regulations and legislation generally apply across the board and include investment laws and regulations. Public comments on draft legislation are not generally posted online nor made publicly available. In a few instances, laws are passed quickly without meaningful publication, public review or public debate.
Government does not generally disclose the basis on which it reviews regulations. Some government agencies make scientific studies publicly available for example studies related to environmental impact assessments.
Some government ministries also make available policies, laws, and regulations pertinent to their portfolio available on their respective ministry websites or Facebook pages. Printed copies of the Belize Government Gazette contain proposed as well as enacted laws and regulations and are publicly available for a subscription fee. Additionally, enacted laws are published free of cost on the website of the National Assembly or Parliament but there is a delay of a few weeks in updating the website.
Regulations and enforcement actions are appealable with regulatory decisions subject to judicial review. The Office of the Ombudsman also may investigate allegations of official wrongdoing but has no legal authority to bring judicial charges. Reports of wrongdoing are submitted to the affected Ministry. Additionally, the Annual Report of the Ombudsman is tabled before the National Assembly and is a publicly available document.
In March 2021, the Government amended the Central Bank Act authorizing the Central Bank to provide emergency programs and facilities to a wide array of institutions, including banks, financial institutions, statutory corporations and other similar bodies. These emergency programs and facilities will allow for wider array of financial support to businesses, including the “purchase of financial assets including debt, equity and securities, credit facilities or discounting of notes, drafts or bills of exchange.” Through this measure the Government hopes to make available US $25 million in liquidity to invest in the productive sector, particularly in tourism businesses. Additionally, this amendment increased the limit of direct advances that the Central Bank can make to Central Government from 8.5 percent to 12 percent of the previous year’s recurrent revenues.
Further legislative reforms introduced in February 2021 purport to increase transparency with regard to Government finances but are yet to be finalized in the National Assembly. The first was a motion to reconstitute the Public Accounts Committee (PAC) to include three representatives from the social partners. This change will allow for a combined majority to the opposition and social partners representatives. The Committee is chaired by a member of the Opposition. The amendment provides a significant shift to public transparency as the PAC was previously a defunct committee of the legislature where the Government majority ruled. The PAC holds an important function in examining, considering and reporting on Government’s budget and public expenditures as well as reports of the Auditor General. The second motion was an amendment to the Finance and Audit Reform Act that will establish a contingency fund to be used for urgent and unforeseen expenditures for which there are no other provisions. And the third motion will amend the Contractor General Act and establish a Public Contracts Commission to monitor the award and implementation of public contracts and to investigate fraud, corruption, mismanagement, waste or abuse in the award of public contracts.
Information on public finance, both the government’s budget and its debt obligations (including explicit and contingent liabilities) are widely accessible to the general public, with most documents available online. The budget documents do not include information on contingent or state owned enterprise debt unless Government guarantees or is paying these debts. Nonetheless, the audited annual reports of all major State Owned Enterprises (SOEs) were publicly available on their websites. The Auditor General’s report on government spending, however, is often years delayed.
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.
Besides 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 with 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 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 and precedent.
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. 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 judicial system remains independent of the executive branch for the most part. Case law exists where the judiciary has ruled against the government, and its judgements are respected and authoritative. The highest appellate court exists outside of Belize at the Caribbean Court of Justice, providing a level of independence for the judiciary. Notwithstanding, the current judicial system has some systemic problems – frequent adjournments, delays, and a backlog of cases caused by only a small number of judges and justices. 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 .
Businesses and citizens may appeal regulations and enforcement actions. 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 .
As a Member of the Caribbean Community (CARICOM), Belize is also a member of the Caribbean Court of Justice ( www.ccj.org ) based in Trinidad and Tobago. This Court has two jurisdictions in relation to CARICOM Members States. In its appellate jurisdiction, the CCJ is the final court of appeal for both civil and criminal matters emanating from CARICOM Member States. In its original jurisdiction, this Court is responsible for interpreting and applying the Revised Treaty of Chaguaramas, the treaty establishing the Caribbean Community and CARICOM Single Market and Economy.
Laws and Regulations on Foreign Direct Investment
The country has an English Common Law legal system supplemented by local legislation and regulations. The legal system does not generally discriminate against foreign investment and there are no restrictions to foreign ownership. The Exchange Control Act and its subsidiary laws and regulations, however, provide the legal framework that applies to foreign ownership and control. Other laws stipulate that foreign investment can qualify for incentives; citizens have the right to private property; contracts are legally binding and enforceable, and regulations are subject to judicial review among other provisions favorable to foreign investment.
Major laws enacted or amended are generally available in the National Assembly’s website at www.nationalassembly.gov.bz . For the previous year, these include:
- International Banking Act
- Deposit Insurance Act
- Mutual Administrative Assistance in Tax Act
- Electronic Transactions Amendment Act
- Cybercrime Act
There is no “one-stop-shop” website for investment and 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 Antitrust 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 and import licensing requirements.
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 2020. However, claimants in previous cases of expropriation assert that the Government failed to adhere to agreements entered into by a previous administration. Belizean law requires that the government assess and compensate according to fair market value. Expropriation cases can take several years to settle and there are a few cases where compensation is still pending. Belize nationalized two companies in public-private partnership: Belize Electricity Limited and Belize Telemedia Limited. These actions were challenged in the courts and resolved in 2015 and 2017, respectively.
ICSID Convention and New York Convention
Belize formally acceded to the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) on March 15, 2021. Even though the Convention was extended to Belize by an act of the United Kingdom when Belize was a colony, Belize did not sign on to the Convention after independence.
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.
The United Kingdom on behalf of Belize signed the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID convention) in 1965 and the country has not ratified it.
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 Economic Partnership Agreements (EPA): 1) between CARIFORUM and the EU; and 2) CARIFORUM and the United Kingdom. These 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.
Over the past decade, the Government of Belize has been involved in approximately five to eight 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 Columbia or the Caribbean Court of Justice (CCJ). Most of the judgments went against the Government, which has settled the majority and continues to settle other cases.
Local courts are empowered to recognize and enforce foreign arbitral awards against the government, but these are generally challenged up to the CCJ. The Crown Proceedings (Amendment) Act and the Central Bank of Belize (International Immunities) Act were passed in 2017, affecting the enforcement of foreign arbitral awards against the government. Essentially, the Crown Proceedings Amendment Act provides that should a foreign judgment be entered against the government, but a court in Belize later declares the judgement “unlawful, void or otherwise invalid”, the foreign judgment would be legally set aside. The Act also provides for hefty penalties of fines and/or imprisonment on a person, individual or legal, seeking to enforce the foreign judgment after being set aside. 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.
There has not been a history of extrajudicial actions against foreign investors.
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 through arbitration. The Supreme Court also provides for a 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 Caribbean Court of Justice (CCJ).
Cases involving State Owned Enterprises (SOEs) have gone before domestic courts with rulings both in favor and against the SOE. Foreign businesses generally consider these rulings fair and impartial.
The Bankruptcy Act of Belize provides 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. The bankruptcy law generally outlines actions a creditor may take to recoup his losses. Bankruptcy protections are not as comprehensive as U.S. bankruptcy law.
Belize ranked 135 of 190 economies in the 2020 World Bank’s Doing Business Report. The poor ranking was attributed to low depth of credit information, the lack of a credit bureau and of a collateral registry as well as problems related to payment of debts in situations of bankruptcy. According to this report, a receivership proceeding takes at least two years until the creditor is repaid all or part of the money owed and has a cost of 22.5 percent of the debt. Additionally, the insolvency procedure does not have a good framework to commence operations, to manage debtor´s assets, and to involve creditors in the reorganization proceedings, among others.