UK
Malta
Seychelles
Oops! Something went wrong while submitting the form
Netherlands Antilles
Company formation in brief
The most widely spread organisational and legal forms of companies attractive for foreign investors for the establishing of business in the Netherlands Antilles are as follows:
• Naamloze Vennootschap (NV) – public limited liability company
• Netherlands AntillesBesloten Vennootschap (NABV) – private company of the Netherlands Antilles
• Vrijgestelde Vennotschap (V.V) – private limited liability company registered in Aruba
• Stichting - private foundation
Although the Netherlands Antilles Commercial Code has no legal definition of offshore companies, in practice, these are companies established by non-residents generating profit from sources abroad.
Naamloze Vennootschap (NV) – public limited liability company may be established by one participant (physical or legal person, resident or non-resident) and is characterised as follows:
• the company charter drawn up in Dutch must be approved by the Minister of Justice of the Netherlands Antilles, and the company registration data must be published in the official newspaper;
• minimum charter capital is US$ 28’000;
• at least 20% of the capital is paid up at the time of registration;
• both registered and bearer shares may be issued.
• no shares may be offered by the company to the public and any shares transfer always requires certification by notary;
• all company shares have a nominal value and voting rights;
• shareholders meetings are held at least once a year and on the island where the company was established;
• one director (physical or legal person) may manage the company;
• director may be a company shareholder;
• at least one director must be a resident of the Netherlands Antilles;
• company maintains accounting records but is not required to submit an audit report on the results of its activities.
Netherlands Antilles Besloten Vennootschap - NABV (Netherlands Antilles Private Company) is a limited liability company that may be established by one shareholder (physical or legal person of any residence) without a need for him to pay any charter capital; it is characterised as follows:
• both registered and bearer shares with and without a nominal value (although bearer shares are not recommended by local agents) may be issued;
• shares may not be publicly offered;
• no shares transfer to third parties requires certification by notary (although it is recommended by all local agents as guarantee for due recording);
• shareholders meetings are held at least once a year and on the island of the Netherlands Antilles where the company was established;
• company may have one director - physical or legal person; directors’ names and residential addresses are supposed to be registered in the public register of the Chamber of Commerce of the Netherlands Antilles;
• for a company to apply for tax exemption, at least one director must be a resident of the Netherlands Antilles. The Company may obtain the tax exempt status provided that it carries out investment and holding activities exclusively, and provides relevant financial services;
• director may be a company shareholder.
NABV charter may be written in any language. Although the company registration is subject to publication in the official bulletin, approval of the charter by the Minister of Justice of the Netherlands Antilles is not required. Shareholders’ names may not be disclosed in the State registers of the Netherlands Antilles.
Vrijgestelde Vennotschap (V.V) - private limited liability company registered in Aruba may be established by one shareholder (physical or legal person) and is characterised as follows:
• the company charter drawn up in Dutch must be approved by the Minister of Justice of the Netherlands Antilles, and the company registration data must be published in the official bulletin;
• minimum charter capital is US$ 6’000;
• at least one share is paid at the time of registration;
• both registered and bearer shares may be issued.
• no shares may be offered by the company to the public and any shares transfer always requires certification by notary;
• shareholders meetings are held at least once per year and on the island where the company was established;
• one director (physical or legal person) may manage the company;
• director may be a company shareholder;
• directors are not required to be residents of the Netherlands Antilles;
• company is exempt from taxation in the Netherlands Antilles, provided that it carries out investment and holding activities exclusively and provides relevant financial services;
• benefits provided by the tax law of the Kingdom of the Netherlands (including benefits related to holding companies) are not applicable.
Stichting is a private foundation formed as a legal entity which has no members or shareholders but has only management board composed of one or more members (physical and/or legal persons).
The Deed of Formation specifies the founder’s name, the private foundation's name, the purpose of its establishing, names of persons - beneficiaries of profit distribution and the procedure for appointing and dismissing of the management board members. The Deed of Formation also includes a charter which specifies the foundation's name and the purpose of its creation, as well as the procedure of appointing directors. All constituent documents are signed before a notary of the Netherlands Antilles. The Private Foundation is then registered with the Antilles Chamber of Commerce and Industry.
No capital is required to be paid up for establishing a foundation.
At least one director must be a resident of the Netherlands Antilles. Directors may not participate in the profits.
Each private foundation has three important features:
• it may not carry out business activities, however, for example, holding shares is not considered as business activity;
• a private fund may effect payments both in favour of the founders and in favour of third parties;
• payments are not required to have a humanitarian purpose.
Inherently, a private foundation established in the Netherlands Antilles for any legitimate purposes is exempt from the income tax and the gift tax in the Netherlands Antilles and therefore, is not required to file financial statements with the tax authorities. However, if a private foundation is deemed to be leading an entrepreneur activity (as outlined below), it has to pay income tax at a rate of 34.5%.
Voluntary contributions and donations made to a private foundation by non-residents are exempt from the gift tax in the Netherlands Antilles. Contributions and donations made by a private foundation are exempt from the gift tax in the Netherlands Antilles. Since contributions and donations in the form of assets, as a rule, are subject to the gift tax in the donor's country, and this tax rates and the taxation method differ quite substantially in various countries, it is strongly recommended that a potential private fund member review in detail all possible scenarios in certain individual situations.
A private foundation is actually a trust instrument for civil law jurisdictions and can be used in situations when a private or family capital should be divided and transferred to a legal entity which will enjoy a favorable tax regime. For example, a private foundation may serve as an instrument of capital transfer to future generations or other legitimate successors without a need for such generations or successors to have a direct right to disposing of the property.
In addition, a private foundation may be used as a tool of protecting assets from expropriation, economic and other risks, for example, a family wealth embezzlement risk.
A private foundation may also be used as a company carrying out passive management of assets. In this case, a private foundation is an attractive alternative to a limited liability company established in the Netherlands Antilles.
A private foundation may also be used as a holding company for passive holding of active subsidiaries’ shares. Holding of shares is not deemed passive if a private foundation’s management board members are the same persons who are in the management board of base companies. Contributions to a private foundation’s assets may be made by tangible and intangible assets.
A private foundation may be also used to own real estate as a passive investment provided that it is not engaged in such operations as buildings maintenance, active collection of rental payments, etc.
Finally, a private foundation may be used if the founder believes that in selling certain assets significant capital gains may be realised in the future. In selling those assets, capital gains are transferred to a private foundation. As an option suggested by Antilles lawyers, a private foundation may buy a long-term call option (at a fair market price); this enables the private foundation to buy an asset at a fixed price in the future. In the event of a significant increase in the asset value (as expected), the private foundation exercises the option and receives tax-free capital gains.
A private foundation founders’ names may remain undisclosed since the Chamber of Commerce of the Netherlands Antilles registers only names of the management board member(s). The ultimate beneficiaries’ names are not disclosed either, and their identity remain unknown even to the notary. The beneficiary’s identity is known only to the law firm – a duly licensed services provider since it is legally required to know it.
Although one person may be a founder, trustee, management board member and beneficiary at the same time, this is not recommended in practice because this may lead to adverse tax effects in the founder’s country of permanent residence since the foundation may be considered transparent.
In order to guarantee that a private foundation would be preserved as an instrument of property trust management, the private foundation’s bank account is usually managed by the management board itself in the person of a local resident director. However, at a client’s urgent request, the management board may provide the founder with the monitoring rights which enable him to access the account and to initiate the transfer of funds. At the same time, the authority to authorize such transfers remains with the management board members only.
Private foundations may transfer their registered office from the Netherlands Antilles to other jurisdictions.
Trading and trust companies established in the Netherlands Antilles are required to pay taxes on all their worldwide income at a rate of 24% to 44%, depending on their profit. Such companies are also subject to municipal taxes on the islands. The exception is NABV offshore companies which may receive tax exemption of up to 90% of their profit.
Investment and holding companies pay taxes at a rate of 2.4% to 3% depending on the profit. Holding companies that own real estate abroad are exempt from taxation in the Netherlands Antilles.
Loan interests paid to banks (or other licensed financial institutions) are exempt from withholding tax.
Dividends received from investments in securities (shares, bonds and other) are subject to preferential taxation when the profit generated from operations with securities is taxed at a rate of 2.4% to 3%.
Capital gains resulting from value growth or disposing of shares are not subject to taxation in the Netherlands Antilles.
Dutch holding companies having interests in offshore companies established in the Netherlands Antilles are exempt from any taxes on offshore companies’ income (including taxes on dividends, capital gains and shares sale).
Non-resident shareholders of offshore companies established in the Netherlands Antilles are exempt from profit taxes on dividends, interests, sale or donation of shares and other property. It should be noted that those exemptions are not applicable to private limited companies registered in Aruba (V.V).
A free economic zone is established on the island of Curaçao where the income tax rate is only 2%. However, in order to register a company in this zone, it is required to obtain an approval by the local authorities which are governed by considerations of how beneficial a particular company would be to the Netherlands Antilles’ economic development.
Offshore companies are not subject to foreign exchange control in the Netherlands Antilles.
A company formation in Netherlands Antilles could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in the Netherlands Antilles. To set up a company in the Netherlands Antilles is possible by correspondence, but to open a bank account in the Netherlands Antilles will, most probably, require a personal visit.
Oops! Something went wrong while submitting the form
