Américas / May-June 2000
By Larry Luxner
Belize -- the least densely populated nation in Central America -- has approved new legislation that aims to lure wealthy 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 told Américas 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 United States and Mexico, its stable eco-nomy 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 US$1,000 a month. Also required is a financial statement from a Belizean bank or credit union certifying that the applicant's investment or deposit will generate at least US$2,000 a month, or the equivalent of US$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."
To entice foreigners to Belize, the new law allows QRPs to import cars and personal/household effects duty-free, says Mahler. Thereafter, another vehicle may be imported into Belize duty-free every five years, as long as the previous vehicle is sold, re-exported or disposed of in an approved manner. The program will also allow QRPs to import light aircraft, boats and other modes of transportation duty-free.
Belize's new retirement law has 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."
Belize hopes the law will bring badly needed dollars into the local economy, which earned US$198 million last year from tourism -- its No. 1 source of foreign exchange.
Under the new 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 US$100, and various government fees totaling US$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."