Ministry’s tax reforms mean more advantages for investors

The Ministry of Finance of the Netherlands Antilles is making significant changes in the tax system that will create new advantages for investors. It is currently working with the International Monetary Fund and other international organizations to reform the local system, and aims to lower taxes, widen the tax base, and implement some advantageous double-taxation agreements to attract more foreign investment.

Curaçao’s role in the financial sector of the Netherlands Antilles will become even more important after the current restructuring, according to Ersilia T.M. de Lannooy, Minister of Finance. Both St. Maarten and Curaçao will be having a new status. There will be two islands allowed to have debt, and they will benefit from tax relief from the Netherlands that will cover 70 percent of their current debt. Curaçao’s position as a key regional financial-services hub is certain to get even stronger.

The Ministry of Finance has a history of cautious fiscal policies, and this has served it well in this year’s difficult conditions. “Thanks to our conservative 2009 budget, we have not felt the effects of the global financial crisis. The central bank’s rule is that only 40 percent of institutional investments can be abroad, and this has helped insulate us from the crisis,” the minister explains.

De Lannooy is very positive about Curaçao as a business base, noting that new companies investing in tourism ventures are allowed a tax holiday of two to 11 years. “Curaçao can offer a lot,” the minister concludes.

Commissioner of Finance

“We want to turn red tape into a red carpet for investors.”

Curaçao has a very strong financial sector that includes thriving offshore and onshore financial-services companies. Since Curaçao is part of the Kingdom of the Netherlands, international corporations based on the island can count on various tax advantages. The sector benefits from good supervision and from Curaçao’s commitment to adhering to all international financial-sector guidelines.

Michael Willem, Commissioner of Finance and Chief Commissioner of the Island Government, heads Curaçao’s financial sector. He says, “I serve as the island’s wallet.” The commissioner’s role is to oversee the government’s financial-sector regulatory activities, the internal revenue agency, a gaming board, and offices that manage various government-owned enterprises.

Current priorities for Curaçao’s financial sector, according to Willem, include proposed tax reforms aimed at broadening the tax base and reducing taxes. “Our tax rates are currently too high and this limits our potential,” he says. The commissioner is also a strong supporter of increased transparency and better corporate governance in all sectors.

The financial sector will continue to play a key role in the island’s economic development as Curaçao diversifies. In addition to promoting tourism and financial services, the government aims to stimulate the growth of knowledge-based industries and logistics. “Our best resource is our people,” Willem observes.

Another goal is to reduce the red tape involved in doing business in Curaçao. “We want to turn red tape into a red carpet for investors,” Willem explains, noting that the proposed new tax rates should draw even more investors to Curaçao.

Korpodeko

“We have many interesting products for international companies.”

Korpodeko is building the foundations for Curaçao’s sustainable social economic development by providing financial support for a wide range of projects. “We try to focus on projects that will generate or conserve the country’s foreign-exchange revenues, including in the tourism and infrastructure sectors as well as in new sectors such as e-commerce and call centers,” explains Managing Director Arthur B. Rosaria. The organization, which serves as Curaçao’s development bank, generally provides loans of around 150,000 to a few million Antillean guilders.

Korpodeko grew out of two foundations in order to provide a wider range of services and more in-house know-how to support local entrepreneurs. Korpodeko also serves as a strong local partner for international investors. “We have many interesting products for international companies, including a green fund for purchasing and implementing energy-saving products and techniques. You get it at our lowest interest rate, and repay your investment through the savings you have on your energy bill. This is a product which not only is good for the local and foreign investors, but is also good for the island in general,” Rosaria explains.

Competitive interest rates

Korpodeko sees itself as a complement to the local commercial banks with which it often partners. Explaining Korpodeko’s advantages over banks, Rosaria says, “We are less risk-averse than standard commercial banks and can offer competitive interest rates of 6 percent to 8.5 percent as well as a lower minimum initial contribution. We are also more flexible than the standard commercial bank.”

Korpodeko now operates as a revolving fund and has adopted a more aggressive policy of providing larger loans. It aims to continue to innovate and seek out new funding sources. It is also strongly supporting increased foreign investment in Curaçao. “More international investors should come here because it is an excellent place to do business,” Rosaria concludes.

Spigthoff

“When clients choose us, they get a winner in their corner.”

Law firm Spigthoff, founded in 2001, has 15 attorneys in Curaçao and 53 in Amsterdam, and excels at providing exceptional customer service. Karel Frielink, Partner, explains, “As far as the Curaçao office is concerned, we are not particularly interested in growing, because providing quality is number one for us. We want to be the best law firm on the island.”

Spigthoff focuses on serving the financial-services sector, and recently has been advising clients on dealing with the global financial crisis. “We have been advising several parties and helping to deal with the products that helped cause the current credit crunch,” Frielink explains. Around 65 percent of the firm’s clients are international.

In an outreach effort, Frielink has launched a blog that shows clients what Spigthoff can offer and informs people about local conditions and events, without divulging any confidential information. The blog has proved to be a very effective marketing tool for the firm.

Focus on the customer

Spigthoff’s competitive edge is that it offers in-depth understanding of the local market, an international perspective, and a willingness to focus on satisfying each customer’s needs. The firm and its partners have made a long-term commitment to Curaçao and support many community-service projects.

Curaçao is an ideal place to live, invest and work. Frielink explains, “If a customer wants to invest or set up a holding in a jurisdiction for tax purposes, the last thing the customer wants is uncertainty. Curaçao offers an excellent infrastructure of banks and telecommunications, accountants and tax advisers, as well as political stability and a judicial system that is part of the Netherlands. It is definitely not a banana republic!”

Urging potential clients to contact Spigthoff for their legal services in Curaçao, Frielink concludes, “When clients choose us, they get a winner in their corner.”

VanEps Kunneman VanDoorne

“We are perceived as the leading law firm on the island.”

Law firm VanEps Kunneman VanDoorne, Curaçao’s biggest and most prestigious law firm, provides world-class services to well-known international and local companies. Randolph Van Eps, Partner, explains that his firm is able to handle the kinds of cases that in Curaçao were once taken on by larger international law firms.

The firm works with international clients that make up around half the firm’s business. Van Eps explains that although Curaçao does not offer the same tax advantages of some other destinations, “international companies favor Curaçao as an offshore destination because of the high level of services, legal infrastructure and professionalism. One of the advantages is that litigation can be taken to the Supreme Court in The Hague, which provides comfort to international clients. These are the reasons Curaçao remains an important financial-services center.”

VanEps Kunneman VanDoorne is associated with the reputable Dutch firm Van Doorne and is part of the global Lex Mundi association of independent law firms, a guarantee of the highest international standards. “We are perceived as the leading law firm on the island, in particular as far as international corporate law and finance transactions are concerned,” Van Eps says. The firm employs 21 attorneys in Curaçao, 4 in Aruba, 1 in its recently opened offices in Bonaire, and plans further expansion in St. Maarten this year.

Van Eps praises Curaçao as a business base and for its excellent quality of life, which helps international firms like VanEps Kunneman VanDoorne attract the best attorneys and staff. “We know the local community very well and we are in a perfect position to assist international clients doing business here in Curaçao,” he concludes.