March 14, 2014
Ambergris Caye, Belize
One of the great things about being a foreigner in developing countries is how easy it is to get access to influential decision-makers.
If you’re in the UK or US, for example, the chances of sitting down with the President or Treasury Secretary are almost nil.
In developing countries, this access is much easier to obtain. I often start with a country’s biggest law firm—top lawyers are typically very well-connected… as are real estate agents and property developers.
Through this approach, I’ve routinely been able to meet with Prime Ministers, Presidents, Ambassadors, government ministers, etc. around the world to gain unique insights into who exactly is running the country, and what their next moves are.
Here in Belize it’s no different. And I just had the chance to sit down for a nice chat with Jose Manuel Heredia, Jr., the country’s Minister of Tourism.
In our conversation, we talked investment opportunities in Belize, residency, and what the government is doing to make things easier and more streamlined for foreigners.
He gave me some really insightful data, including a sneak peak at how they are planning on vastly improving Belize’s popular retiree program.
Once these improvements are made, I would rank residency in Belize quite favorably relative to other options. So this country should definitely be on people’s radars if they’re looking for a potential escape hatch.
You can read excerpts of the interview below:
Simon Black: It’s no secret that Belize certainly has a lot of great things going for it. This isn’t some hidden paradise nobody has ever heard of—the word is definitely out. Beautiful Caribbean setting. English language. And so close to the US and Canada—as you point out, at 2.5 hours, it’s quicker to fly from Dallas to Belize than from Dallas to Washington, DC.
And it’s really been growing, changing, improving… it certainly has since I was last here.
Minister of Tourism: I would love to say that even though my hometown is right here in San Pedro, Belize, I believe this is one of the best destinations in the world.
If you had asked me six years ago about Belize, I would have felt that it was just another place to be. But today, learning to appreciate what we have and seeing what Belize has and having traveled so much now, I can see that we have a complete package.
Simon: Speaking of a complete package, let’s talk about a popular package here that Belize offers for foreigners—a sort of ‘residency’ package you call the QRP.
MoT: The QRP (Qualified Retired Persons) program was founded and initiated several years ago. We are always trying to make it more attractive.
To qualify, someone has to be able to demonstrate $2,000 in monthly income, and be at least 45 years old.
Simon: Is it a really bureaucratic process?
MoT: Being the minister, I try to make sure that I can expedite this process to get it done as soon as possible, so that people feel like they can get things done in Belize.
I mean, I actually get involved personally to make sure that people have confidence that when they’re applying, they will be able to have their QRP and residency within the shortest possible time.
Once through the process, people have residency to live in the country and can bring anything that they want to bring into the country– household goods, a car, a boat, an airplane, all free of duties. And any income is not taxable as well.
Simon: In the past, there have been some issues with this program—that the QRP does not lead to Belizean citizenship. But you mentioned that this is probably changing.
MoT: Yeah. In the past, if you wanted to become a citizen of the country, even though you might be living ten years over here on the QRP, and you wanted to become a citizen, you would have to give up your QRP and start from scratch [with a different residency program].
We want to change this. The attorney general and myself, we talk to [the other ministers and leaders in government], and say that if you have lived legally for five years in Belize, even under the QRP, you can qualify for citizenship.
Simon: That’s fantastic, it’ll fix a major flaw in the program, thanks for that information.
So, one of the other very interesting things about this place is that there is some interesting investment opportunity in the tourism space. Here in Ambergris Caye, the island definitely goes through periods where some of the hotels have an occupancy rate of practically 100%.
MoT: Yes. As I mentioned before, forty percent of tourists to Belize come here to the island.
Simon: And those tourist numbers are growing rapidly.
MoT: Yes- we embarked three years ago on an aggressive marketing campaign, and it has started to pay off fruitfully. Two years ago, our tourism growth was 10.5%. Last year it was another 7.5%. Based on the numbers we saw in January, we are projecting similar growth this year.
Simon: Belize has a lot of islands, but this is definitely one of the nicest and most developed. But being an island, it is constrained by size, and that limits supply. Do you know how many hotel rooms are on the island now?
MoT: If I am not mistaken, then I am sure we have about two thousand rooms.
Simon: Two thousand rooms. Okay. Not really a ton of space, then.
MoT: No. Thirty years ago, back when San Pedro was a small fishing village with probably no more than two thousand residents, we had one hotel with just 7 or 8-rooms.
Simon: And you mentioned earlier, you’ve worked with a few other major airless to establish new service to Belize, including Copa in Panama… so that will really open the South American market to you.
So, with two thousand rooms, do you know, more or less, what the occupancy rates are right now across all those rooms on the island?
MoT: At this moment, I think we are doing better than sixty percent.
Simon: What was it like back in 2008, 2009 in the early days of the recession?
MoT: At that point, it was no more than forty percent. Slow season was terrible. A number of the hotels had to close during that time because it was just not sustainable.
Simon: And the slow season is getting shorter and shorter now.
MoT: Yes. Slow season used be the end of July. August. September. October. November. Today, the peak season runs all the way to September.
Simon: That’s really interesting. Some friends of mine are getting involved in the hotel business here, and they’ve shown me the numbers. It matches exactly what you’re saying—the growth rates are very interesting, and they’re projecting to be able to return 20% or better to investors, even under a rather conservative scenario. And they’re very confident in making the investment here.
MoT: The investment confidence here is strong; it has to do with a government’s credibility. Belize used to be perceived as one of the most corrupt countries in the region. And when we took over a few years ago, the credibility of the previous government was zero.
Simon: Yeah, Belize was pretty famous for scandal and corruption.
MoT: Today, the credibility of government is higher. And with the confidence so great now, I am seeing more and more nationwide development starting to happen. The potential is great.
Simon: Excellent, thanks so much for the insights.