Luigi Wewege explains how offshore wealth management works in Belize
Here is something the film and entertainment industry has a great interest in: Global wealth is set to grow at a pace of 6.1% annually. The number of high-net-worth individuals (HNWI’s) around the world are on the rise and these people are more scattered around the world than ever before: they are no longer concentrated solely around the United States and Europe. Given these trends, we take a closer look at offshore wealth management.
To get a clear picture of all the latest in offshore investment opportunities, we interviewed Luigi Wewege, Senior Vice President, and the Head of Private Banking at Caye International Bank in Belize:
How do people usually arrive at the decision to go offshore?
“It all starts with diversification as a means to increase your chances of building and retaining wealth. A lot of people now are deciding to move a portion, for example 20 to 50% of their wealth out of their country of residence and into an offshore bank account.”
Many HNWI’s obviously want to be protected against some elements in their home country. What are these elements?
“This is a very in-depth topic. But in summary, people are concerned about various ways of wealth confiscation and erosion – which can come in many forms. They want to hedge themselves against costly liabilities such as nasty divorces and other lawsuits especially frivolous, so they’re looking for different corporate structures abroad that can lend greater privacy. If you live in a country where there were severe pension cuts and austerity measures, you’ll be one of those who will consider allocating a portion of your pension to a Belize or offshore bank account for sure. Naturally there are people with more pressing concerns – like the stability of the government where they live, and civil unrest which can destabilize an economy fairly quickly. One such example is Trump impeachment – see how divided the country is that leads democracy in the world – then just think what would happen in your part of the world if the power structures become so divided”.
You mention privacy. Help people understand the difference between privacy and anonymity:
“We all know the difference in definition that a dictionary would offer. Yet from a private banking perspective, they can offer similar benefits. Both protect the banks client from people knowing who they are. However, since various OECD initiatives went into force, anonymity such as in the form of numbered accounts fell away which is one of the reasons why Switzerland lost its appeal. But when it comes to privacy, where the bank does not disclose your details to anyone, Belize is a leader in the privacy stakes. When choosing the best location for private offshore banking, privacy is one of the most important issues people consider”.
Can you tell us what are the main reasons Belize has become so popular with offshore banking?
“You have a number of reasons, not just one, which will steer the decision-making process of any smart investor. Belize has friendly relations with world powers all over and are seen as one of the most neutral countries on geopolitical issues. Therefore, when there is turmoil, trade wars and the risk that one country will retaliate against the citizens of another who invested there (for example US/China), you know that if your money is in Belize, you’re not affected. The same goes for the Middle East, which is frankly rather on edge – and Europe, where a string of mutual agreements and exchange treaties have made it an unpleasant environment for investors who want peace of mind. In Belize we have zero tax on various corporate structures, so you do not have to donate your hard-earned money to the host country. In fact, people come to Belize to EARN money because interest rates are much higher than many other jurisdictions. Of course, you also have 24/7 access to your money with so many different options – and the ability to draw money at an ATM anywhere in the world with a bank card. We also have some of the best client service officers in Belize – so there is peace of mind that you’re backed by highly qualified financial service professionals who are working with you to achieve your financial goals”.
How does offshore banking work in Belize?
“At Caye International Bank, we are straightforward with our clients and there to serve them. If you know what your precise objectives are, then great. If not, then a financial service professional will help you determine which offshore banking option is best for you. With that in hand, you can decide which type of account is most suitable and you will receive assigned to you a dedicated Private Banking Officer. Some people simply want a savings account with interest, others just want a bank card with which they can access funds, and others are looking for alternative investment options. Caye has it all and the client will also receive 24/7 online platform access, enabling you to get access to your bank account from anywhere in world, and thus have no need to visit Belize for any reason unless you want to enjoy the tropical weather or meet us in person out of personal preference.”
I heard people are leaving their banks in Europe because banks are pushing due diligence too far. Is that true, please tell us more about this?
“Look all banks have to obey the local law regulations and various global banking compliance statutes, as well as take a stance against terrorism and many other evil things in the world. But when someone goes to draw 500 Euros at the counter in Ireland, Greece or Italy – and they are asked to explain like a 5-year old why they want their own money, that is highly annoying and precisely why many good European citizens are fed-up with this. It does not happen in all European countries – but in some it does happen and I can tell you that folks are shifting their savings out of there, moving a lot of their money to Belize, Bahamas, Dubai, the Caymans, Mauritius, Seychelles, and many more places for this reason”.
How did things like the “Panama papers”, OECD press and other stories affect offshore banking?
“Very good question. I’d say the Panama papers leak as we know it, only boosted offshore banking because ordinary wealthy people realize that the leaders who always told them to bank at home, were banking elsewhere – and now they’ll be doing the same. So never assume anything: don’t think for one moment that offshore banking is going out of fashion or is being clamped down on, because I would argue that the contrary is happening”.
Caye is known as one of the pioneers of the Gold Loan Program. Tell us about it:
“Well we have various views on Gold in the world – Warren Buffet thinks it is useless, with others like Peter Schiff, Marc Faber and Jim Rogers being heavily in favor of it. We understand that people who hedge against a doomsday scenario tend to favor gold a lot. So, with this program, our bank helps you to store your gold in a secure facility in Zürich (but administered in Belize) in one of the safest vaults in the world. Then, Caye International Bank will offer a line of credit for up to 75 percent of the market value of your gold which is kept in Switzerland. To protect both the bank and the client against volatility, we have a simple measure: if the amount of your loan exceeds 85 percent of the value of your physical gold in the vault, we calculate the difference and you need to either supply additional capital or a portion of your gold is sold at market value to cover the loan. In case of a sale, excess profit is transferred to the bank client”.
What should people know about transparency and legality?
“Firstly, it is important to know that for most citizens it is not illegal to have an offshore bank account. The issue is more about transparency and reporting. These days, with automatic reporting almost now worldwide no one should attempt to hide their money. You can still enjoy all the benefits associated with offshore banking without breaking the law. This is obviously where good advice comes in handy: working with financial service professionals who understand international laws is a great advantage”.
More about Luigi Wewege:
Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution, which is available in audio, kindle plus paperback formats throughout all major international online bookstores and is now in its third edition.