Legal entities

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When you start a business, you will have to choose a Legal Entity. Find out more about the different possible Legal Entities: N.V., B.V., C.V., V.O.F., Proprietorship, and Foundation.

Read below or request these documents digitally through businessinfo@curacao-chamber.cw

Jump to entity section: N.V. / B.V. | C.V. | V.O.F. | Proprietorship | Foundation

N.V. / B.V.

The private limited liability company (besloten vennootschap, hereafter also “BV”) is a flexible and highly modern form of corporation. The CIFA (the Curaçao International Financial Services Association) has taken the initiative to have the rules for the BV drafted.

The BV is a company similar to the NV. The main differences with the NV. are:

  • The BV has registered shares only;
  • The Articles of Incorporation can determine that the shareholders can be held liable for the debts of the BV;
  • The Articles of Incorporation of the BV can contain a different manner for dissolution of the company;
  • If preferential rights should be attached to shares, such should be provided for in the Articles of Incorporation of the BV;
  • Delivery of shares of an BV can only take place in the manner as provided for by law;
  • There is no distinctive financial regime such as for the “large” NV;
  • There is a more flexible regulation for convening shareholders meetings for the BV than for the NV;
  • The Independent Supervisory Board is not regulated in the law;
  • Only the BV has the possibility of company “managed by shareholders”.

The option of a company “managed by shareholders” has been introduced for the BV. This was done to meet the wishes of enterprises familiar with American law. This form of the private limited liability company does not have a Board of Managing Directors as a separate corporate body. The joint shareholders act as management, which simplifies the taking of corporate action and the management of this type of company in general. Since no Managing Directors have been appointed as such, there are no formalities of appointment, suspension, and dismissal of Managing Directors, nor is there a difference between shareholders’ meetings and Board meetings in this case. The shareholders may determine the details of the way in which they will manage the company, the division of tasks mutually agreed upon, etcetera, in a shareholders’ agreement. Using this type of company, a legal concept can be created that resembles the partnership (commanditaire vennootschap), the general partnership (maatschap), or the limited partnership (vennootschap onder firma), and at the same time benefits from the fact that, as opposed to partnerships, this company managed by shareholders is a legal entity with the ability to act, sue and be sued in its own name.

The BV is in principle subject to profit tax. However, a full exemption can be applied for if the activities are investing in debt instruments, securities and deposits. The company should not be subject to supervision of the Central Bank as being a bank or a financial institution. Also the company should prepare annual accounts and have them audited by an independent expert. These conditions are in line with current international standards and therefore should not form an unacceptable hurdle for serious investors.

C.V.

The Commanditaire Vennootschap (“CV”) is a limited partnership in which there is a distinction drawn between the limited partners and the general or managing partners. The general or managing partners manage the affairs of the CV and represent it in dealings with third parties. They are jointly and severally liable for the debts of the CV. A limited partner however contributes to the partnership a certain amount of capital. His liability is limited to the amount of capital contributed. A limited partner is prohibited from directly managing the affairs of the CV, however he can represent the general partners as their attorney-at-fact. If a limited partner is involved in the direct management of a CV he forfeits his right to the protection of limited liability and becomes jointly and severally liable for the debts of the partnership, together with the general or managing partners.

Netherlands Antilles’ partnerships are formed by either a notarial or a private deed. The absence of a signed deed however can not be used to defeat the claims of third parties. Partnerships must be registered at the Commercial Registry. It is not necessary to disclose the identity of limited partners. Foreign corporations and/or individuals can act as limited or as general or managing partner.

Taxation of the VOF and CV

The VOF is not considered a separate entity for profit taxt purposes. Therefore, the partners in the VOF are each of them individually subject to tax on their share in the profit of the VOF. The same applies to the CV. The exception is the so-called CV by shares. The CV by shares is considered a separate entity for profit tax purposes. The CV is then subject to tax, but only on the profit share of the limited partners. The general partner remains himself subject to tax on his profit.

In general terms, a CV is considered to be by shares in case the partners are free to transfer their share in the partnership's capital to another person or entity without prior consent of the other partners.

V.O.F.

The Vennootschap Onder Firma (“VOF”) is a general partnership in which the individual partners are jointly and severally liable for the debts of the partnership.

Proprietorship

What is a Proprietorship?

A proprietorship (eenmanszaak in Dutch) is a form of business where there is no distinction between the business assets and personal assets. As the owner of a one man business, you will be personally liable for all obligations of the business. A marriage settlement is important and should be considered. A marriage settlement has to be effectuated through a notary act.

Business License

Individuals born outside the Netherlands Antilles, but who have lived in the Netherlands Antilles for longer then 5 years, need a business license in order to establish a one man business.

Procedure for application

A request for a license to open a new business has to be made on an officially stamped paper of Naf. 5,- addressed to the Island Executive Council, "Bestuurscollege van het Eilandgebied Curaçao". The stamped paper can be obtained from the post office. The application needs to be submitted to the Economic Affairs Service, Business License Department, Molenplein z/n, tel: 462-1444, fax: 462-7590 stating:

  • Name of the business
  • Name of the manager, place and date of birth
  • Nationality
  • Nature and objective of the business to be established
  • Investment information

Company registration

Most companies have to register with the Commercial Register of the Curaçao Chamber of Commerce and Industry. For a registration of a proprietorship the following is required:

  • A copy of the application form for a business license
  • Identification (identification card, driver's license, passport)
  • Name of the business
  • Address of the business
  • Invested capital

Costs

The costs of the registration consist of the initial registration fees as well as the annual contribution. Both fees are determined by the amount of capital invested in the business.

New prices commercial registry 2015

An additional ANG 13,50 needs to be paid for an excerpt from the registers. An excerpt is a document where the following is provided:

  • Name of the business
  • Date of registration
  • Address of the business
  • Name of the owner
  • Registration number
  • Business purpose

In case a new extract is required, a new copy should be ordered at least one day in advance!

Taxes

For a proprietorship, business income or loss is reported on the owner's individual income tax return.

Foundation

A foundation (or stichting in Dutch) is a legal entity in its own right with its own assets and liabilities. The legal concept of the stichting developed ages ago from capital being set aside for a special nonprofit or charitable purpose and was originally used by religious and welfare groups. The stichting is still frequently used for religious and nonprofit organizations. Distributions to incorporators or to those, who constitute its bodies, are not allowed, and its distributions are furthermore restricted by law to distributions with an ideal or social purpose.

The foregoing does not mean that the use of a common foundation is restricted to charitable purposes. It can be and is extensively used in structures in which the foundation is the legal owner of assets of which others hold the economic ownership. Any distributions are then neither out of its own funds nor out of its own income and are thus permissible. Also, the restriction does not apply to liquidation distributions: it is permissible to state in the articles of incorporation that upon liquidation the assets shall be distributed to e.g. the incorporator. A stichting can for example act as custodian or trustee of assets, entrusted and transferred to it for the purpose of investing, administering and managing such assets on behalf of third parties. A stichting is therefore an ideal vehicle to realize an economic transfer, without transferring control of the assets.

The principal difference between a stichting and a corporation is that a stichting has neither members nor shareholders, nor a capital divided into shares. The board of a stichting, which manages its affairs, is therefore not subject to the overall control of shareholders or members. The initial managing board is appointed at the moment of incorporation. Thereafter vacancies are filled at the sole discretion of the sitting board or by another person or body specially nominated for that purpose.

The foundation may be formed for an unlimited duration, for a certain period of time, or until a specified event occurs. The foundation can be dissolved by resolution of the board, unless the articles of incorporation provide otherwise. It is for example possible that the incorporator has the authority to dissolve the foundation.