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Executive Summary
Curaçao is an island located in the southern part of the Caribbean Sea near Venezuela. It covers a total area of 444 sq km. Willemstad is the capital of Curaçao; Dutch, Papiamento and English are its official languages, and Spanish is a recognized regional language.

After having gained a self-government status in 1954, Curaçao has become a part of the Netherland Antilles, and this status became a topic of active discussion in 2000. It has been decided, through referendums and state institutions’ activities, to make Curaçao an autonomous territory under the Kingdom of the Netherlands, but outside the Netherlands Antilles group of islands.

Salt and phosphate mining were the first industries of Curaçao. Due to its geographical location, the island has become an important commercial centre in 19th century. Curaçao has one of the most developed infrastructures in the Caribbean region today and it has one of the highest GDP per capita among the countries of the region. Its economy is mainly based on oil refining, financial services and tourism. The jurisdiction is known for well developed gambling activities. Port of Willemstad which is appropriately equipped and may be used as a Free Zone generates a significant part of the state income. It has been the aim of the government to diversify economy, and in comparison to other Caribbean territories, which are mainly dependent on tourism and/or financial services, Curaçao has succeeded in achieving a major level of diversification. The US, Venezuela and the EU are main trading partners of Curaçao. Prostitution is officially tolerated.


Geography
Geographically Curaçao is considered to be a part of South America, but at the same time it is also regarded as a part of Leeward Antilles. To the South-East off the Curaçao main island a smaller island of Klein Curaçao is located. The country has picturesque coral reefs, making it an excellent place for diving.  Its flora differs from typical tropic vegetation, it has a number of local plants some of which have healing qualities. There is a big variety of animals and fish species as well. Christoffelberg is the highest point of the country which rises at 375 metres above the sea level.

The climate of Curaçao is characterized as semi-arid savanna-like climate, with two seasons in a year – dry (January to September) and wet (October to December). Temperature fluctuations over the year are minimal, generally changing in the range of +25 – +30 degrees C. The country does not lie in the hurricane belt, but may be affected by hurricanes occasionally.


Map, Flag and Coat of Arm


Types of Company

In order to conduct a business activity in Curaçao, it is necessary to obtain a license, by following a precisely specified procedure. Information on the nature, location and financing of business must be submitted to the local authorities. Different regulations and taxation rates apply to companies engaged in portfolio management, real estate, finance, royalties, consulting, trading, fund management, insurance, banking and shipping activities. As Curaçao has obtained a major autonomy and separated from the Netherlands Antilles, it is now in a transition period in its company formation practice and taxation regime reforms.

Limited Liability Company (BV)
This type of company has registered shares and it can be managed by shareholders. It is generally liable for profit tax but full exemption is available on several occasions.

General Partnership (VOF)
This is a general partnership, all partners of which are fully and jointly liable for all its debts and obligations.

Limited Partnership (CV)
At least one general partner with unlimited liability and one limited partner with limited liability up to the capital invested can form a limited partnership. Limited partners are not allowed to participate directly in a partnership’s management. Generally, partners of general and limited partnerships are taxed on the individual basis, as a partnership is not a separate legal entity. The exception is applied to limited partnerships by shares, which are liable for profit tax, however, general partners are still  liable to individual tax on profits.

Sole Proprietorship
A business owner is fully liable for all the company’s debts and obligations.

Branch of a Foreign Company
in order to conduct a business activity in Curaçao a foreign company needs to register its local presence with the state authorities by submitting a number of requested documents.

Foundation
This is a separate legal entity with its rights and liabilities. This type of company is often established for religious or charity purposes. The structure is often used as a trustee or custodian for investment purposes, as well as managing assets of third parties. Therefore, a foundation may become an efficient solution for transferring assets without transferring the control over them.

The peculiarity of this structure consists in that it does not have shareholders and its capital is not divided in shares. Board of managing directors must be appointed. The duration of a foundation can be unlimited, limited by time or by occurrence of specific events.

Holding Company
If structured in an appropriate way, it may be profitable to incorporate a holding company in Curaçao.

Taxation

Personal
Residents of Curaçao are liable to taxation on their world-wide income. Income tax has a progressive nature and can reach a maximum rate of 57.2%. Capital gains may be taxed, withholding tax is levied on various transactions. Social security contributions are payable. Residents are taxed for inheritance and gift tax purposes at varying rates from 2% to 4% depending on the nature and value of the asset; non-residents are generally exempted from these types of tax.

Corporate
A flat rate of 34.5% is levied for the purposes of profit tax. Turnover tax is levies at a rate of 5%, and a company can become exempted from it on various occasions. Significant tax incentives are offered to e-commerce companies – they are liable to a reduced rate of profit tax, exempted from import duties and turnover tax on certain products and services.
Import duty is levied at varying rates from 5% to 22%, some food products are exempted from it. Excise duties are applicable to alcohol, tobacco and fuel.
 
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