Belize: A Safe Haven For Investors?

Belize is a safe place to invest in, but there are some risks to be aware of. The country has a stable, democratic political system, a strong economy focused on growth, and a business-friendly environment. It is also one of the few countries where foreigners enjoy the same rights as citizens when it comes to land ownership. Additionally, Belize offers incredible tax benefits, including no capital gains tax and low property taxes.

However, there are reports of scams and fraud in the real estate market, as well as issues with squatting, vandalism, and theft. The country is also prone to natural disasters such as hurricanes and flooding. It is important to do your due diligence, seek professional help, and be cautious when investing in Belize.

Scams and fraud

Belize is a popular target for "developers" who start projects and dupe unsuspecting buyers into paying for condos that never get built. These scams involve sophisticated promotional materials in print, online, and on television, and the use of marketing firms to lure investors in.

One of the most prominent scams is the so-called "Sanctuary Belize" scam, which has also been known as Sanctuary Bay and The Reserve. This scam has been described as the largest foreign real-estate scam ever investigated by the Federal Trade Commission (FTC). It involved the sale of plots of land, costing between $100,000 and $500,000, in a sham luxury development on the southern coast of Belize. The scammers used deceptive tactics to persuade even sophisticated consumers, including those who conducted due diligence and were aware of allegations of fraud.

Another scam to be aware of is the "tire scam", where people purposely damage rental car tires so that when the renter pulls over to fix the flat tire, they are robbed. This scam has been reported in both Costa Rica and Belize.

• Do your due diligence and research everything about the development or builder. Look for reviews online and on social media, and join relevant Facebook groups.
• Always hire a local, ethical Belize attorney-at-law to review any contracts and conduct a complete title search on the specific property you are buying. Ensure that the property is free and clear of all liens, judgments, and encumbrances.
• Be wary of high-pressure sales pitches and fast-talking real estate brokers or attorneys. Take your time with any real estate transaction and do not be afraid to walk away.
• Be cautious of cheap monthly payments and small down payments that may hook you into a scam.
• If something looks or sounds too good to be true, it probably is.

Natural disasters

Belize is highly susceptible to natural disasters, including hurricanes, tropical storms, flooding, and drought. These disasters affect the country regularly and cause significant infrastructure and economic losses, particularly in the agricultural sector during the hurricane season, which lasts from June to November.

Belize has experienced several major hurricanes and tropical storms since 1930, with 16 hurricanes, eight of which were categorised as major hurricanes, and 17 tropical storms making landfall in the country. These storms have resulted in extensive flooding and damage to various industries, including banana, sugarcane, papaya, rice, corn, and vegetables.

One of the deadliest hurricanes in Belize's history occurred in 1931 when a Category 4 hurricane with 135 mph winds made landfall in Belize City, killing approximately 2,500 people. Another notable hurricane, Hurricane Hattie in 1961, had sustained winds of up to 155 mph and gusts of 200 mph. It caused a storm surge that killed more than 400 people and left thousands homeless, leading to the relocation of the capital city from Belize City to Belmopan.

In addition to hurricanes and tropical storms, Belize is also vulnerable to flooding and drought, which can have significant impacts on agriculture and local communities. For example, the villages of Santa Martha and Calla Creek are vulnerable to floods, drought, and fire, while farmers in the village of Concepcion are mainly affected by drought.

Given the frequency and severity of natural disasters in Belize, it is essential to implement effective disaster risk reduction strategies and strengthen preparedness, response, and rehabilitation capabilities.

Unlicensed brokers

Belize is an attractive country for investors due to its pro-business environment, investment incentives, and stable political, social, and business climate. However, it is important to be cautious when investing in any country, including Belize, to avoid falling prey to unlicensed brokers and scams. Here are some key points about unlicensed brokers in Belize:

• Regulation: Belize has a regulatory authority, the International Financial Services Commission (IFSC), that oversees financial activities in the country. However, compared to regulations in countries like Australia, the European Union, and the USA, Belize's regulations are relatively lax. This makes it easier for unlicensed brokers to operate in the country.
• Risk of Scams: Unlicensed brokers may engage in fraudulent activities, scamming unsuspecting investors. Belize's less stringent regulations can make it challenging to hold these brokers accountable.
• Lack of Investor Protection: Licensed brokers in reputable jurisdictions often have investor protection schemes in place. These schemes protect clients in the event of broker insolvency or other financial issues. Unlicensed brokers in Belize may not offer such protection, leaving investors vulnerable to losses.
• Difficulty in Recourse: If you encounter issues with an unlicensed broker, seeking legal recourse can be difficult. Unlicensed brokers may operate without a physical office or a clear chain of accountability, making it hard to track them down and resolve disputes.
• Unregulated Financial Products: Unlicensed brokers may offer financial products that are not approved or regulated by the IFSC. These products may be highly risky, and investors may not have the same level of protection as they would with regulated products.
• Data and Privacy Concerns: Unlicensed brokers may not adhere to data protection and privacy standards. Your personal and financial information may be at risk, leading to potential identity theft or financial loss.

To protect yourself from unlicensed brokers in Belize, always verify the broker's license and regulation status. Check with the IFSC or seek guidance from reputable financial advisors or regulatory bodies. Conduct thorough due diligence before investing, and be cautious of high-pressure sales pitches or offers that seem too good to be true. Remember, if an opportunity seems too risky or unclear, it's better to walk away and protect your capital.

Squatting

Belize has strict anti-squatting laws, and unlike Costa Rica, Panama, Honduras, and other Central American countries, it does not recognize squatters' rights. Squatters are not a concern when it comes to owning property in Belize.

In Belize, to claim the title to a piece of land, one must prove to the Supreme Court of Belize that they have had continuous and undisturbed possession of the property for 30 years on National and Conveyed lands, and for 12 years on registered lands.

In 2015, 20 families who were squatting on the border of two suburban communities of the City of Belmopan, San Martin and Maya Mopan, were ordered to leave by the Belmopan City Council. The families were in danger of being flooded out by a nearby creek, and they did not own any part of the land. The Council ordered the removal of some structures in the area, but the residents claimed that they were not formally notified. The squatters argued that they had rights over the land by virtue of occupying and developing it for many years. Ultimately, the Council maintained that it must be right and fair to other residents who wanted land by legal means.

To protect against squatters in Belize, it is recommended that property owners carry out thorough inspections of their property and remain vigilant. Regular site inspections are important, as even slight acts of ownership by the true owner can be enough to negate a squatter's claim.

Crime

Belize has one of the highest per capita murder rates in the world, and violent crime such as sexual assault, home invasions, armed robberies, and murder are common. A significant portion of violent crime is gang-related, and the local police often lack the resources and training to respond effectively to serious criminal incidents. Most crimes remain unresolved and unprosecuted.

Gang violence is a notable issue in Belize, particularly in Southside Belize City, where gangs frequently clash to gain control of territories for illegal activities. Gang members often use weapons to resolve disputes, and tourists could find themselves in the wrong place at the wrong time, even though they are not usually targeted.

In addition to violent crime, petty crime such as pickpocketing and purse snatching also occurs in Belize, with criminals often operating in groups and targeting tourists, even at resorts. Credit card and ATM fraud are also common, especially in San Pedro.

To avoid becoming a victim of crime in Belize, it is recommended to remain vigilant and aware of your surroundings at all times, avoid travelling after dark, keep your cellphone charged, and refrain from displaying signs of wealth, such as expensive watches or jewellery. If threatened, it is advised to comply and hand over cash and valuables without resistance.

Frequently asked questions