The Washington Times / March 23, 2000
By Larry Luxner
BELIZE CITY, Belize -- The Central American nation of Belize has approved new legislation that aims to copy Costa Rica's success in luring rich retirees to its shores.
The Belize Retired Persons Incentive Program, signed into law last October, is aimed specifically "for those people who wish to live in Belize and can prove a permanent and consistent income from investment, pension or other retirement benefits."
At present, only U.S., Canadian and British citizens aged 45 years or older can qualify, though the law will soon be amended to include many more countries in Europe and South America, says Anthony Mahler, director of product development at the Belize Tourist Board.
"Since we began this program two months ago, we've had at least 500 inquiries, and we haven't done any marketing yet," Mahler said during an interview in Belize City.
Belize -- which has only 250,000 inhabitants in a country the size of El Salvador -- touts its sub-tropical climate, its proximity to the U.S. and Mexico, its stable economy and its English-speaking population as some of the key benefits of retiring in Belize.
In order to qualify, applicants must submit an official bank statement proving they receive a pension or annuity of at least $1,000 a month. Also required is a financial statement from a Belizean bank, credit union or building society certifying that the applicant's investment or deposit will generate at least $2,000 a month, or the equivalent of $24,000 a year. Upon approval, the applicant becomes a Qualified Retired Person (QRP).
"These people don't get citizenship, or even residency," says Mahler. "They get retirement status, which allows them to come and go as they please. And they'll be able to own land and invest, but not to do business or hire people."
The new law isn't the only way Belize is trying to make itself more attractive to visitors. A few months ago, despite overwhelming opposition by the Catholic Church, the government of Prime Minister Said Musa approved a measure that allows casino gambling for the first time.
Shortly after the law's passage, the 134-room Princess Hotel was inaugurated in Belize City. During its first week of business, the hotel's flashy new casino attracted thousands of well-dressed Belizeans, who came not only to play the slot machines but also to see the live show: six also to enjoy a Brazilian-style cabaret performance by six half-naked dancing girls imported from Russia.
"The people who come here are actually very nice," said the hotel's general manager, Martin Conway. "We're attracting the middle and upper classes. We don't get any garbage."
While the casino law will attract short-term tourists -- mainly from Mexico -- the retirement law seeks to lure permanent residents from wealthy countries by allowing QRPs to import cars, personal effects and even light aircraft duty-free.
Belize's new retirement incentives have already earned high marks from international attorney Joel Nagel, who calls it "arguably the most attractive incentive program anywhere for foreign retirees."
Nagel, managing partner of Pittsburgh law firm Nagel & Goldstein, writes in International Living magazine that the new law is a "win-win situation" for both retirees and the Belizean government.
"If you’re looking for tax-free living, put Belize at the top of your list," he says. "Similar to Costa Rica’s now-defunct pensionado program, the new Belize law targets North American and U.K. nationals who would spend part or all of the year in Belize, maintain a residence there, and bring their hard-earned dollars to spend in the local economy. Unlike other immigration programs, this one falls squarely under the authority of the Ministry of Tourism, which is working in conjunction with the Belize Tourist Board to make the program simple and user-friendly."
Under the new Belizean law, QRPs are exempt from the Income and Business Tax Act and from "the payment of all taxes and levies on all income or receipts which accrue to him from a source outside of Belize, whether that income is generated from work performed or from an investment."
All applications are subject to a background check by Belize's Ministry of National Security; they must also undergo a complete medical exam and be AIDS-free. In addition, applicants must submit a non-refundable application fee of $100, and various government fees totaling $605 once they're accepted into the program.
"We're using Costa Rica as a bigger model," says Mahler, though he warns that with 20,000 American retirees in that country, it's beginning to backfire. "In Costa Rica, they're taking some of those benefits back. Maybe it's starting to strain the health system. We don't want to get such big numbers -- maybe 10,000 or 12,000."
It may yet turn out to be much more, however.
"I’d advise you to act quickly if you’re considering applying for QRP status," says Nagel. "Insiders tell me that a ceiling of approximately 20,000 applications will be allowed before the program is closed to new applicants. This could take several years, as it did in the case of Costa Rica, or it could happen in as little as one year, depending on demand."
Yet Costa Rican officials claim they're not worried about competition from Belize. Noting that the country's foreign retiree population is now closer to 7,000, Eduardo Leon-Paez, director of the Costa Rican Tourism Institute, denied that Costa Rica's incentive program was cancelled because health services are overburdened.
"It doesn't matter what kinds of incentives are offered by Belize or any other country in Central Ameria," he said. "People will still come to Costa Rica because it offers the best health services, because it is a peaceful and stable country, and because it is a strategic travel point."
Hans Ketelhohn, manager of the Costa Rican Residents' Association, agrees.
"Costa Rica is famous as an ecological destination, for its climate and its friendly people," he said. "It's very strongly positioned in people's minds as the preferred place to retire. It takes time to build a reputation like that, so at the moment, I don't see a competition developing between the two countries."