By Fatima Romero
The global economy is facing challenges and uncertainties that practically force investors to look to diversify their portfolios, and in Central America, two countries may be a good option.
Panama and Belize stand out in the isthmus for their economic stability, business-friendly environments, and growth prospects of 4.2% and 5% by 2023, according to projections by the Economic Commission for Latin America and the Caribbean (ECLAC).
According to Luigi Wewege, President of Caye International Bank, based in Ambergris Caye, Belize, these two countries are the main emerging markets in Central America for investors.
Panama is known to be one of the fastest-growing economies in the region, with an average annual growth rate of 4.6% from 2000 to 2020, according to IMF estimates.
It is also considered a global logistics hub due to the Panama Canal, and the expansion of the Panama Canal in 2016 made the country an even more important player in international trade.
In addition to its logistics industry, Panama has a thriving financial sector and is known for its favorable tax policies, making it attractive for foreign direct investment (FDI).
WHY INVEST IN BELIZE?
Many consider Panama a “Latin American Singapore” for its economic success, but relatively little is known about Belize, a country of less than half a million people.
Wewege said Belize is a market with untapped potential and has also experienced remarkable growth in recent years, with an economy driven by tourism, agriculture, and fishing.
“The government has been proactive in promoting foreign investment and economic diversification, making it an attractive destination for investors seeking new opportunities,” added the Caye International Bank president, who shared his views with ‘Centralamerica.com’.
In addition, its location on the Caribbean coast, close to major markets such as the United States and Mexico, offers significant potential for growth in sectors such as logistics and manufacturing.
“With a commitment to environmental sustainability and renewable energy development, coupled with a stable political environment, Belize is attractive as an investment destination,” Wewege said.
BELIZE, AN OPTION FOR OFFSHORE BANKING
Wewege, the co-author of “The Digital Banking Revolution” book, said that if an investor is considering offshore banking, they may have heard of destinations such as Hong Kong, Dubai, or Switzerland.
However, Belize offers some distinct advantages over these locations, and these are some reasons why:
- English-speaking country: Belize’s official language is English, as a former British colony. This makes it a convenient location for English-speaking investors.
- Setting up an account is easy: Belize has a simple and less bureaucratic process for setting up an offshore account, making it a good choice for anyone looking to establish their offshore banking presence quickly and efficiently.
- Privacy and confidentiality: Belize has strong privacy laws that protect the confidentiality of account holders. There are no tax information exchange agreements with many countries, including the United States. This makes Belize an attractive option for those who value financial privacy.
- Tax benefits: The country has a tax-neutral environment for offshore banking. There is no capital gains tax, inheritance tax, or exchange controls. This can be a great advantage for investors who wish to minimize their tax obligations.
- Asset Protection: Belize has strong asset protection laws that can help safeguard clients’ assets from legal action and creditors. By establishing an offshore trust or International Business Company (IBC) in Belize, individuals and companies can provide an additional layer of asset protection.
- Political and Economic Stability: Belize has a stable political environment and a democratic government that supports the growth of its offshore financial sector. This stability can give investors confidence that their assets are safe and secure.
- Proximity to North America: Belize’s strategic location in Central America, close to the US and Canada, can be useful for North American investors. This proximity can facilitate communication and travel compared to Europe or Asia.
POTENTIAL RISKS TO CONSIDER
Emerging markets such as Belize and Panama have political risks, currency fluctuations, and infrastructure constraints that investors should know about.
“With due diligence and risk management strategies, investors can manage these risks,” Wewege said, adding that Central American emerging markets offer investors unique opportunities for diversification and stable returns amid US economic turmoil.
“These countries have shown strong growth potential and a commitment to economic diversification, making them attractive options for investors.”
Still, it is important to consider individual circumstances, so the specialist recommended consulting with a financial advisor or tax professional before making any decisions.
With information from Bloomberg
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