Deposit Protection for the Belize IBC
The offshore financial sector in Belize is one of the most important locations for international small business owners and location independent entrepreneurs to manage their global corporate activities. Unlike the BVI, Bermuda and the Cayman Islands where multinationals and public companies retain rather expensive services, Belize open the doors for solo entrepreneurs, small and medium sized enterprises, and startups. The offshore financial industry is attractive to many due to its flexibility and lax administrative requirements imposed on international businesses and their beneficiaries.
An individual company owner can choose the most appropriate service provider from virtually any location in the world in a borderless and global environment. By following this strategy, Belize offshore companies often retain financial services outside of the country. Since the traditional jurisdictions for wealth management like Monaco, Switzerland and Hong Kong have strict requirements on its clientele and their jurisdictional footprint, the Belize IBC often banks in other international financial centers known for their aptitude towards the offshore financial industry.
Choosing the right jurisdiction to match the corporate activities and locations involved is not always easy. Offshore banks are often privately owned and operate in an environment that draws the attention, rightly or not, of regulators and the international community. Not only should offshore entrepreneurs identify banks that are easy to use internationally, but they also need to look at capitalization, the regulatory environment, and the availability and eligibility of foreign account holders under the domestic deposit guarantee scheme. All three are equally important and when considered altogether, they create the stability needed by international entrepreneurs.
Banking and finance heavily relies on public confidence. Financial institutions avail themselves this position substantiated by policy objectives, economic theories and governmental approval. To allow and encourage financial institutions to lend out and invest the money deposited with them, credit institutions operate under a special regime. They must hold reserves, mitigate conduct risk, and provide bank deposit protection or deposit insurance to eligible account holders. Bank supervision and regulatory compliance is a continuous process while free market principles place weight into the hands of customers to penalize financial institutions for their wrongdoing. This combination creates a playing field where under normal circumstances assets or secure and the bank continues its operation.
When banks fail deposit protection for the Belize IBC is a process that requires close attention of the beneficiaries. Timeframes, claim submission procedures and eligibility can turn security into an uncertain and disappointing event. To avoid being letdown and ensure that all the boxes are ticket, a deposit guarantee claim should follow appropriate preparation. Instead of doing all the work themselves, many Belize IBC account holders hire an external adviser – often working on the basis of no win, no fee – to help them build their case, file their claim and get paid. Something everyone victim in this situation should consider to safeguard their position.