In 2004, a new corporate law was introduced in the Netherlands Antilles, as “Book 2” of the jurisdiction's Civil Code, which simplifies some aspects of the formation and operation of most of the corporate forms dealt with below.

 

NV (“naamloze vennootschap”)

 

This is the form historically taken by almost all companies in the Netherlands Antilles, whether for domestic purposes or for international structuring.

 

These are some of the main characteristics and requirements attaching to Netherlands Antilles public limited liability companies (NVs): a minimum of one shareholder is required, who may be an individual or a corporate entity; there must be at least one director – more importantly, there must be at least one director resident in the Netherlands Antilles; directors can be individuals or corporate entities; directors exercise wide powers, including those of the Anglo-Saxon company secretary; authorized capital must be at least NAF 50,000.= (approximately € 21,500.=), of which 20% must be paid-up on incorporation; shares can be registered or bearer; a registered office must always be maintained in the Netherlands Antilles.

 

The incorporation process involves an investigation of prospective shareholders by the Ministry of Justice, permission for the chosen name from the Commercial Register of the Curaçao Chamber of Commerce & Industry, and other administrative procedures.

 

The most-efficient way to acquire a Netherlands Antilles NV, is to purchase a company “from the shelf”. These kind of companies are widely used and accepted in The Netherlands Antilles, and they can be obtained much faster than tailor-made ones, and with much less effort.

 

Offshore NV (“naamloze vennootschap”)

 

In the Netherlands Antilles, the expression “offshore company” has historically referred to a standard public limited liability company (NV) as described above, which conforms to some additional conditions, allowing it to receive privileged tax treatment.

 

The New Fiscal Framework (NFF) abolishes the previous distinction between onshore and offshore companies for new formations, although “old regime” NV companies are still available “from the shelf”.

 

NABV (“besloten vennootschap”)

 

The Netherlands Antilles private limited liability company (NABV), which was introduced alongside the New Fiscal Framework (NFF), has the following characteristics: unlike the public limited liability company (NV), no ministerial approval is required; incorporation is quick and relatively informal; there are no minimum capital requirements; the deed of incorporation can be in any language; shares may or may not have a par value, voting rights, or participation rights; bearer shares are not permitted.

 

The management arrangements are more similar to common law models than to the usual Civil Code structure.

 

Exempt NABV (“vrijgestelde vennootschap”)

 

The private limited liability company (NABV) can be exempt from profit tax and withholding tax when it conforms to the following conditions: an application for a 0% tax rate needs to be filed with the fiscal authorities; directors must be resident individuals or resident certified trust services providers; the purposes and activities of the NABV should consist entirely or nearly so of lending and investment, financial services, or other activities connected with these.

 

Due to the newness and lack of definition of the legislation setting-up the NABV, professional guidance is crucial before considering any involvement with this type of company.

 

General partnership (“vennootschap onder firma”)

 

Partnerships are recognized under the Netherlands Antilles Civil Code. In the general partnership each partner is liable for all the debts of the partnership, as in common law partnerships.

 

Partnerships are fiscally transparent.

 

Details of partnerships and of the partners must be entered in the Commercial Register of the Curaçao Chamber of Commerce & Industry.

 

Limited partnership (“commanditaire vennootschap”)

 

The limited partnership is similar to the general partnership, except that it has one or more general partners with unlimited liability, who manage the partnership, and one or more limited partners, each of whose liability is limited to the amount of contribution.

 

The identity of the limited partners does not have to be entered in the Commercial Register of the Curaçao Chamber of Commerce & Industry, or otherwise publicly disclosed.

 

Foundation (“stichting”)

 

The foundation is the equivalent in this civil law jurisdiction of the trust in a common law jurisdiction, although unlike the trust, the foundation has legal personality.

 

A foundation is constituted under the Netherlands Antilles Civil Code; the main characteristics of the foundation are as follows: it must be entered in the Foundations Register of the Curaçao Chamber of Commerce & Industry; there is no minimum capital requirement; it does not have members or shareholders; it is managed by one or more directors who do not share in the profits or assets, and who can be individuals or corporate entities – at least one director must be resident in the Netherlands Antilles; the identity of beneficiaries or holders of certificates of participation need not be publicly disclosed.

 

A foundation may transfer its seat into and out of the Netherlands Antilles, provided that the other jurisdiction concerned has “suitable” legislation.

 

Under the National Ordinance on Profit Tax 1940, the profits of a foundation created for other than charitable purposes are treated in the same way as those of a Netherlands Antilles public limited liability company (NV).

 

Private foundation (“stichting particulier fonds”, SPF)

 

A relatively new instrument is the private foundation, introduced by the Netherlands Antilles legislature as a flexible variant of the long existing “common” foundation.

 

The private foundation is a specific and flexible form of the legal entity (“common”) foundation, which has been described above. Therefore a private foundation neither has shareholders, members or the like. Even beneficiaries do not have to be appointed if such appointment is not desired. In other words, the private foundation is a separate legal entity, with assets and liabilities in its own name.

 

While the purpose of a “common” foundation may not be the making of distributions (except distributions of an idealistic or social nature) to the incorporators or to others out of its income or out of its assets, a private foundation is allowed to do so.

 

Therefore, the purpose of a private foundation may include the making of distributions to incorporators and/ or others, such as children or grandchildren, without serving an ideal or social purpose.

 

To whom distributions can be made, can be described in the articles of incorporation, in very general or very specific terms. The purpose clause could for instance only authorize the foundation to make gifts as and when the (supervisory) board considers this appropriate.

 

Another requirement is that the private foundation's purpose may not be to run a business or enterprise for profit. Managing its assets and acting as a holding company will, however, not qualify as “running a business”.

 

By creating the private foundation, the Netherlands Antilles wanted to launch a product that could compete with certain products of other jurisdictions, like the Anglo-Saxon trust.

 

A private foundation is incorporated as such by deed executed before a Netherlands Antilles civil-law notary, and is then registered in the Foundations Register of the Curaçao Chamber of Commerce & Industry.

 

The articles of incorporation must regulate the appointment and dismissal of the members of the (supervisory) board. The authority to appoint and dismiss board members can be granted to the board itself, the incorporator, or to any other specific person or group of persons.

 

The board must manage the assets of the foundation, and make distributions or gifts, in accordance with the articles of incorporation.

 

The private foundation is tax-exempt if its articles of incorporation include a statement that it is a private foundation.

 

This rather new concept of the foundation has proved to appeal to clients and practitioners from both civil law and common law jurisdictions.

 

Needless to say that a private foundation is for instance an ideal vehicle to protect and preserve family wealth or art collections.

 

Examples of the use of a private foundation are:

 

- estate planning;

- asset protection;

- holding of shares;

- deferral of income;

- minimizing wealth taxes;

- preservation of family assets;

- minimizing taxes on future growth.