By Alexis R. Milan Staff Reporter
Offshore investment in Belize is suffering as a result of the “gun to our head” financial and banking laws that GOB was recently obliged to pass, Senator Mark Lizarraga said.
At last week’s Senate meeting, Lizarraga, quoting from a recently published government Gazette, explained that approximately 10,000 foreign companies had been struck from the registry list.
Lizarraga made the assertion that Belize was forced into implementing the financial laws or risk being blacklisted by the Caribbean Financial Action Taskforce because the government has become too dependent on borrowing and increasing national debt.
Lizarraga said that Belize has been put at the mercy of these institutions because of having indebted ourselves to them.
According to Lizarraga, in 1987 Belize had an external debt of $200 million. That figure, however, has since increased to $2.16 billion in 2014.
This, he said, represented an increase of $77 million being borrowed every year by this country.
The presentation claimed that when tallied, every Belizean man, woman and child owes approximately $7,300 toward Belize’s national debt.
President of the Belize International Financial Service Association, Christopher Coye, told The Reporter that he could not verify Lizarraga’s approximation but explained that offshore companies being struck off the registry is an annual phenomenon, though 10,000 companies being stuck in one year would be an abnormal increase.
Coye further explained that the average strike off rate annually is between 17-20 percent. Companies are regularly struck off the International Business Companies (IBC) Registry for not renewing, but Coye said that a reasonable estimate of companies struck off annually would be around 4,000 and that 10,000 would represent a problem that would need to be investigated.
Coye said that while there was no empirical data to support the notion that there is any one factor that has directly contributed to the spike in offshore companies being struck off from the registry, he was aware that in the four or five months following the government takeover of IBC and IMARBE there was a lull of companies incorporating.