A St. Maarten Private Limited Liability Company (B.V.) offers foreigners limited liability and fast incorporation. All legal documents can be prepared in English.
The private limited liability company in St. Maarten is known as the “Besloten Vennootschap” (or B.V.) in Dutch.
Background
St. Maarten used to be a member of the Netherland Antilles island nation. Since 2010 when the Netherland Antilles dissolved, this island country located just off the coast of Venezuela joined mainland Netherlands and the islands of Curacao and Aruba to form the Kingdom of the Netherlands.
While maintaining its independent island country status, St, Maarten is described as democratically elected parliamentary system under the monarchy of the Netherlands. It is also a sovereign state of the Kingdom of the Netherlands.
St. Maarten is an island divided into two countries: the Dutch side and the French St. Martin side. No border controls exist between the two countries since both Holland and France are members of the European Union (EU) with open borders to each other.
As in Holland, English is spoken by most residents in St. Maarten and is officially its second language.
Benefits
A St. Maarten Private Limited Liability Company (B.V.) can take advantage of the following benefits:
• 100% Foreign Owners: Foreigners can own all the shares in a B.V.
• No Taxation: Several types of passive business activities have 0% taxes.
• Grandfathering Lower Taxes: All of the offshore companies set up before the higher corporate tax rates maintain a maximum 3% tax rate. Purchasing one allows grandfathering the lower corporate tax rate.
• Limited Liability: Shareholders’ liability is limited to their share capital contributions.
• Privacy: Shareholders names are not in any public records.
• Fast Incorporation: A B.V. can be incorporated in one or two days.
• No Minimum Capital: There is no required minimum share capital.
• English: English is its second official language.
St. Maarten Private Limited Liability Company (B.V.) Name
Every LLC (B.V.) must select a company name not resembling or too similar to other legal entities names in St. Maarten.
Since English is one of its official languages, the company name can end with either the words “Limited” or “Limited Liability Company” or their abbreviations “Ltd.” or “LLC”. Of course, the Dutch abbreviation of “B.V.” can also be used.
Limited Liability
A shareholder is only liable for the contribution made to the company’s share capital.
Incorporation
Years ago, the incorporation process began with an application with the Ministry of Justice for a “Ministerial Declaration of No Objection”. It would take one week before a certificate verifying the no objection could be issued so the applicant could move to the next step for incorporation. That requirement has been removed.
Currently, all it takes in order to incorporate is the filing of a notarized Deed of Incorporation. Once filed, the incorporation is complete.
Shareholders
Shareholders do not have to be citizens or reside in St. Maarten. They can live anywhere and be citizens of any country.
Shares may be issued in nominal value, with or without (or limited) voting rights, and shares giving full or only part rights to the profits. Bearer shares are prohibited. Only registered shares are permitted. The managing board of the B.V. must keep a register of shareholders.
Management
A Board of Directors manages the B.V. Directors can be citizens of any country and reside anywhere in the world.
Two options exist for establishing board of directors:
1. General Board of Directors appointed by the shareholders normally manages the B.V.
2. Executive Board of Directors appointed by and supervised by the General Board of Directors delegated to act as executive officers. This relieves the general board members of the day to day operations and the executive can be professionals with more management experience than the shareholders and general board members.
Another option is not to have a board of directors. The shareholders can opt to manage the B.V. themselves. This works better for small or family owned B.V.’s.
Directors are liable to the B.V. for performing duties improperly. Willful misconduct or negligent acts leading to damages such as loss of profits or lawsuits by creditors or persons harmed may cause the directors involved to become liable for the losses.
Minimum Capital
There is no requirement for a minimum share capital.
Taxes
Normally, the corporate tax rate on profits is 34.5%. However, a 100% tax exemption exists for certain types of business activities including near exclusive investments such as:
• Securities;
• Debt Instruments;
• Licensing Industrial and Intellectual Properties which includes receiving royalties or licensing fees for leasing rights to trademarks, copyrights, and patents; and
• Deposits such as bank account interest.
In addition, if no more than 5% of the total revenues derives from dividends received from subsidiaries located in countries with corporate tax rates of 50% or more than St, Maarten (17.2% or more) tax exemption will be granted.
Application for total tax exemption must be filed with the tax inspector. Upon incorporation, application must be made prior to or within 3 months after incorporation of the B.V.
Purchasing Older Offshore Companies
Grandfather in lower offshore corporate tax rates of 2.4% to 3% by purchasing offshore companies incorporated before the higher 34.5% rate became law. The type of business activities can be changed by amending its Deed of Incorporation.
Annual General Meetings
Annual meetings of the shareholders are required, but can be held anywhere in the world.
Public Records
The names of the shareholders are not included in any public records. The register of shareholders kept by the management are not available to the public.
Time for Formation
Depending on the speed of the preparer, a B.V. can be incorporated in one or two business days.
Shelf Companies
Shelf companies are available to purchase in St. Maarten. The older pre-tax increase companies paying only 2.4% up to 3% corporate rate tax are very desirable.
Conclusion
A St. Maarten Private Limited Liability Company (B.V.) has the following benefits: 100% foreign ownership, limited liability, privacy, possible 0% corporate tax rate, purchase older offshore company for maximum 3% corporate tax rate, no minimum share capital, fast formation, and English is its second official language.
