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Netherlands Antilles

 
   
Executive Summary
The Netherlands Antilles were previously called the Netherlands West Indies, the islands are a part of the Lesser Antilles just off the coast of Venezuela to the South-East of the Virgin Islands. The Netherlands Antilles constitute an autonomous part of the Kingdom of the Netherlands, and cover an area of 800 sq km. Willemstad is the capital of the Netherlands Antilles. Dutch, English and Papiamento are its official languages. Spanish is not an official language, but it widely used within the territory of the Netherlands Antilles.

The head of the Netherlands Antilles is the ruling monarch of the Netherlands, who appoints a governor to represent him within the jurisdiction. Executive power belongs to a Prime Minister who forms the government; the governor assigned by the monarch has a representative power, the Netherlands is responsible for defense and international relations of the Netherlands Antilles. Legislative power belongs to delegates of the islands who actively cooperate within the government, and local governors of every island who deal with everyday affairs at a local level. The Netherland Antilles are not a part of the EU.

Economy of the islands mostly depends on tourism, financial industry, international trade and shipping. The US, Venezuela and Mexico are main countries from which food products and other goods are imported to the Netherlands Antilles. Dutch government provides a significant aid to the development of the jurisdiction. Main problem to ensure a constant agricultural development of the Netherlands Antilles is the lack of rain and poor soils.

The Netherlands Antillean Guilder (ANG) is the national currency.

N.B. From the year 2004 the Netherlands Antilles have been living a significant reorganization and its completion has occurred in 2009, in terms
of which the jurisdiction is now broken up into autonomous Curacao, St Maarten ad Aruba, but the remaining islands of Saba, Bonaire and St
Eustatius are supposed to be brought under the direct control of the Dutch government. The information provided below gives an overview of the
Netherlands Antilles, as its existent companies will remain operative andshould be re-registered following specifically outlined legislation till 2019.

Geography
Due to the volcanic origin, the Netherland Antilles have a beautiful hilly landscape, which however results in not being adequate to a substantial agricultural activity. Mount Scenery is the highest point of the islands, which raises at 862 metres above the sea level.

Tropical climate is characteristic to the Netherlands Antilles, there are almost no changes of the temperature during the whole year. In the summer months hurricanes may occur on the territory of the Netherlands Antilles.

Map, Flag and Coat of Arm


Types of Company

Limited Liability Company

Shareholders may be individuals or corporate entities and at least one shareholder may incorporate this type of company. Meeting must be held in the Netherlands Antilles, but shareholders are permitted to be represented by their proxies. At least one managing director must be resident in the Netherlands Antilles, other directors, private persons or corporate entities need not be residents of the jurisdiction. Bearer shares are possible to issue, but they must be paid-up fully. A registered office must be registered within licensed management company or accountants. Annual accounts need not be audited and filed. This type of company cannot offer its shares to the general public. A specific license must be obtained in order to conduct banking, insurance or fund management business.

Offshore Company
This type of company has the same forms as a Limited Liability Company, at the same time having a particularly favourable tax treatment. Its resident status is achieved at least by maintaining a registered office within the jurisdiction. Such a company must conduct all its activities outside the physical boarders of the Netherlands Antilles. All the company’s shares must belong to non-resident entities or private persons. Usually an authorized local company is appointed in order to represent the required management power on behalf of this structure. However, New Fiscal Framework has abolished any distinction between onshore and offshore companies.

Besloten Vennootschap
The New Fiscal Framework has introduced this type of company that is easier and faster to incorporate than a Limited Liability Company. Any language can be used for incorporation documents, but if different from English and Dutch, a certified translation should be provided. There are no minimum capital requirements. Shares with par or no par value, with or without voting and participation rights may be issued. Bearer shares are not allowed. This company can be converted to a Limited Liability Company and vice versa.

Exempt Besloten Vennootschap
This type of company can obtain an exempt status for profits and withholding taxes purposes when it satisfies the following requirements: it files an application for a 0% tax rate; its board of directors must consist of authorized companies or resident individuals, such a company should conduct financial industry activities, however, different from the banking business.

General Partnership
All the partners of this type of partnership are fully liable for a partnership’s obligations and debts. A general partnership need not be audited, and its accounts need not be filed. Data on partnerships and their partners must be submitted to the Commercial Register.

Limited Partnership
This type of partnership has at least one general partner who is responsible for managing the partnership and at least one limited partner who is liable to a partnership’s debts up to the capital invested. The identity of limited partners need not be disclosed to the authorities.

Foundation
This structure in civil law jurisdictions is similar to trusts in common law countries, but unlike trusts, a foundation has a legal personality. It is often used for charity purposes. Persons who participate in a foundation receive certificates that testify it. Certificates can be registered or bearer, and can be easily transferable. A foundation needs to be entered in the commercial register of the Chamber of Commerce. There are no members or shareholders in a foundation.  At least one of directors must be resident in the Netherlands Antilles, directors can be private persons and corporate entities. Accounts must be kept but need not be audited. Identities of certificate holders need not be disclosed. If some profits are created from activities different from charitable purposes, they are treated the same way as those gained by a Limited Liability Company.

Taxation

Personal

A person’s nationality is not a factor that determines an individual’s tax status. It is residence to determine the tax liability which is defined by a person’s habitual place of living, permanent home and centre of economic and social activities. Residents are taxed on world-wide income derived from employment, business, real estate, capital and several periodic receipts.

Income tax and social security contributions are payable by private persons. Income tax has a scalable nature, reaching the maximum of 38%. Income from a business in which a person has at least 5% of shares is taxes at 19.5%. Individuals’ capital gains are not taxed. There is also a property tax; inheritance and gift taxes can reach a maximum rate of 24%, as well as significant import duties. A sales tax is applied on most goods and services at a rate of 5%. Import duties are charged on most goods and commodities at rates ranging from 3% up to 28%.

Corporate
The New Fiscal Framework introduced in 1999, came into force in 2002, which cancelled any distinction between an offshore and an onshore company and simplified taxation legislation. Moreover, a new type of company – Besloten Vennootschap was introduced, in order to allow offshore business management.

All companies that are incorporated in the Netherlands Antilles or those foreign companies the management of which is conducted from within the jurisdiction are considered to be resident for taxation purposes, and are liable to pay taxes on their worldwide income. Non-resident corporate entities are liable to pay taxes in the Netherlands Antilles only on income derived from activities conducted on the territory of the jurisdiction.

A standard rate of profits tax is 30% which is applied to all non-exempted companies. Withholding tax at a rate of 10% is charged on profit distributions. Exemptions for withholding taxes purposes are available if a company is listed on a recognized stock exchange or if 99% of a company’s shares are held by a company listed on such an exchange; if the distributing company is Besloten Vennootschap or if a distributing company is in a Free Zone.

 
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