The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

Executive Summary

Belize has the smallest economy in Central America, with a gross domestic product (GDP) of US $1.3 billion in 2021, a 12.5 percent expansion over the previous year. Due to mounting fiscal pressures and a need to diversify and expand its economy, the Government of Belize (GoB) is open to, and actively seeks, foreign direct investment (FDI).  However, the small population of the country (2021 estimate – 432,516 persons), high cost of doing business, high public debt, bureaucratic delays, often insufficient infrastructure, and corruption constitute investment challenges. The Central Bank of Belize projects the country’s GDP will likely expand 6.0 percent in 2022 while the IMF’s projects 6.5 percent growth, led by a rebound of activity in the construction, retail and wholesale trade, transport and communication, and tourism sectors.

Public debt declined from 133 percent of GDP in 2020 to 108 percent in 2021. This was in large part due to the Blue Bond Agreement, a successful marine protection and conservation-driven financial transaction. International reserves increased from US $348 million (3.8 months of imports) in 2020 to US $420 million (3.9 months of imports) in 2021, partly due to the IMF’s Special Drawing Rights (SDR) 25.6 million allocation, which the authorities are keeping as reserve. Belize’s government encourages FDI to relieve fiscal pressure and transform the economy. The Central Bank of Belize recorded increased inflows of FDI at US $152.25 million in 2021 and outflows at US $24.4 million in the same period.  FDI inflows were concentrated primarily in real estate, construction, financial intermediation, and the hotel and restaurant industries.

Generally, Belize has no restrictions on foreign ownership and control of companies; however, foreign investments must be registered with the Central Bank of Belize and adhere to the Exchange Control Act and related regulations. The Government of Belize (GoB) made progress on the ease of doing business through trade license, stamp duty, exchange control, and land reforms to streamline business applications and related processes.

The banking system remains stable but fragile. Since January 2020, a domestic bank and an international bank each lost a correspondent banking relationship, a significant portion of the sector. In March 2022, the GoB lowered the business tax on the net interest income charged to banks and financial institutions to encourage lending in strategic foreign exchange earning sectors such as tourism, agriculture, and the Business Process Outsourcing (BPO) sectors.

There were incidents of property destruction at two American companies involved in sugar cane industry in the last year. In response, a prominent agro-productive organization wrote to the Government in January 2022 expressing concerns that the Belizean government’s failure to protect and support private sector investors in these instances led to damaging the investment climate and the Belizean economy.

Belize is categorized as a small island developing state (SIDS) that is highly vulnerable to the effects of climate change and is a relatively minor contributor to global greenhouse gas emissions. Belize’s updated National Determined Contributions (NDC) is nonetheless committed to developing a long-term strategy aligned with achieving net zero global emissions by 2050.

To access the ICS, visit the U.S. Department of State Investment Climate Statements website.