A Curacao Tax Exempt NV Company offers limited liability like a European and Latin American “S.A.” company and a U.S. “C” corporation. Foreigners can own 100% of the shares. NV’s offer flexibility allowing different types of business structures for international investors.
The official name in Dutch is a Curaçao “Naamloze Vennootschap” (NV) company.
Background
Curacao is an island country situated in Lesser Antilles in the southern Caribbean Sea, off the coast of Venezuela.
It is a sovereign state of the Kingdom of the Netherlands. It used to be part of the Netherlands Antilles with Aruba and Bonaire islands which dissolved in 2010.
Its political system is described as a “unitary parliamentary representative democracy under constitutional monarchy”. While Dutch is the official language, English is a secondary official language.
Tax Exempt NV Company Benefits
A Curacao Tax Exempt NV Company has the following benefits:
• 100% Foreign Ownership: Foreigners can own all of the shares in a NV.
• Tax Exempt: Qualifying NV’s can receive 100% exemption from all taxes.
• Low Taxes: Other NV companies can qualify for 2% or 3.2% corporate tax rates.
• Limited Liability: Shareholders liabilities are limited to their contributions to the share capital.
• No Minimum Capital: There is no requirement for a minimum authorized share capital.
• One Shareholder: Only one shareholder can form a NV.
• One Director: A minimum of one director is required who can be the sole shareholder for greater control.
• English Spoken: While the primary language is Dutch, most citizens speak English which is its second official language.
Tax Exempt NV Company Name
Every NV must choose a company name not closely resembling any other legal entity’s name in the Netherland Antilles.
The company name must end with the full wording “Naamloze Vennootschap” or its abbreviation “NV”.
Incorporation
In the past, a declaration of no objection from the Ministry was required before a NV could become a corporation. That was eliminated a few years ago allowing for faster incorporation.
NV’s must register with the Commercial Register of the Curaçao Chamber of Commerce and Industry.
Articles of Association
Similar to other jurisdictions, the NV Articles of Association set forth the rules and procedures for operating the corporation.
In Curacao, the Articles of Association are free form allowing them to be written in any language without a set format to follow making them easier to resemble the owner’s native legal system.
Limited Liability
A shareholder’s liability is limited to the contribution towards the share capital.
Shareholders
Only one shareholder is required to form a NV. Shareholders may be citizens of any country and can reside anywhere. They can be natural persons or legal entities.
While the registered agent must maintain records of the shares and their owners, such information remains confidential and private.
Management
Only one director is required to manage the NV. The sole shareholder can be the only director for more control.
Corporate directors are allowed. The Management Board (Board of Directors) can be a one-tiered or two-tiered board.
Officers such as a company secretary are not required.
Registered Agent and Office
Every NV must appoint a local registered agent whose office can be the registered office for the NV.
Minimum Capital
There is no requirement for a minimum authorized share capital. However, the Articles of Association may establish one.
Taxes
Ever since 2001, Curacao eliminated their offshore companies industry. The offshore companies existing at that time were allowed to continue receiving their tax free benefits until 2019. Then they will be subject to the normal corporate tax rate of 22%.
However, there still exists a “Tax Exempt Company” which is an election a NV company can make. In order to qualify for tax exemption, these conditions must be met:
• Disclosing all beneficiaries, managers, and financial activities to the government. This means no anonymous ownership and management and privacy regarding business activities.
• Income can only be gained from investments, finance activities, and licensing intellectual and industrial property rights. Other similar usage and property rights may also be licensed to receive royalties and licensing fees.
• Finally, a maximum of 5% of total revenues can consist of dividends paid by subsidiaries who are not subject to a similar tax regime like Curacao’s 22% only paying 11% or less.
These are not insurmountable restrictions.
If a company wishes to incorporate as a Curacao NV and elect to obtain tax exempt status, the qualifications are simple. Complete transparency of ownership and management. Only conduct business activities related to making investments, and/or providing financing (loans, venture capital, etc.) and/or licensing usage rights of intellectual and industrial property rights. In addition, avoid receiving dividends from subsidiaries who are located in tax havens.
Curacao will appoint an independent expert to verify that these requirements are met in order to qualify for the tax exemption.
Qualifying companies will pay no corporate tax, no income tax, no capital gains tax, no withholding tax, and no tax on dividends.
Note: U.S. taxpayers and everyone else taxed on their worldwide income must declare all income to their tax authorities.
Other Low Tax Companies
Besides tax exempt companies and those paying the normal corporate tax rate of 22%, there are other types of NV companies who qualify for lower tax rates. These include:
• E-Zone Companies: Companies whose only business activities are internet based international e-commerce with customers and clients based in other countries and based in the Curacao E-Zones only pay a corporate tax rate of 2%.
• Export Companies: Companies engaging in exporting where at least 90% of their income is derived from exports to foreign customers pay a corporate tax rate of 3.2%.
Audits and Annual Returns
Audits are not mandatory. Accounting records must be maintained. Annual filing of financial statements are not required.
Annual tax returns are not required unless the NV owes taxes.
Annual General Meetings
Annual shareholders meetings are required.
Conclusion
A Curacao Tax Exempt NV Company enjoys these benefits: complete foreign ownership, no or low taxes, one shareholder who can be the only director, no minimum share capital, and English is the second official language.
