With a well-placed strategic location, good economy, and stable political conditions, Curaçao is an ideal springboard for US businesses looking to expand into South America and other parts of the Caribbean.
Curaçao, located about 35 miles off the north-western coast of Venezuela, is the largest of the six islands in the Caribbean that together form the Caribbean part of the Kingdom of the Netherlands. But following a constitutional change in 2010, Curaçao became an autonomous country to control and manage its internal affairs. The Netherlands continues to manage certain ‘external’ activities, such as defence, foreign relations, and extradition.
Because of its geographical location, Curacao – just 171 square miles in size – is well placed for business with its South American counterparts, or with the United States. The island has an international airport with direct connections to the US, and an integrated handling service for all types of cargo. Now run by an international consortium in partnership with the government, the aim is to develop the airport as a catalyst for economic development and increased employment on the island.
Curaçao has always played an important role in international trade due to its strategic location, and its deep and wide naturally sheltered main harbour at the capital, Willemstad. The port there is an important regional trans-shipment hub for container shipping, and there is also a cruise terminal plus deep-water facilities.
The island has a good infrastructure and a skilled workforce. Key industries are oil-refining and trans-shipment, international finance, and tourism – with market development opportunities in all sectors.
Free Zones in Curaçao
There are two free zones on the island, one at the airport and one at the main harbour, which give potential investors a variety of tax-saving opportunities. No import duties are taxed on goods imported into the free trade zone. Annually, at least 75% of total sales must be exported, while up to 25% of total sales may be sold on the domestic market after obtaining a permit from the government. Routine customs formalities associated with import and export are free of charge during regular office hours, while other administrative matters are reduced to a minimum.
World Trade Center
There is also a World Trade Center on Curaçao, near the airport, which offers American businesses a useful conduit for business expansion across the region. Companies either operate in the economic zone to service export markets or in the World Trade Center to promote their goods and services to the U.S., Europe, and other parts of the world. Curaçao is known for its ability to offer U.S. or European companies with operations in South America and the Caribbean Basin, a base as a regional warehousing/distribution centre, or for distribution through intermediaries. Under intermediary arrangements, Curaçao trading companies manage the product for the investor in the region.
US market in Curaçao
Curaçao has preferential access to the US market through the US Caribbean Basin Initiative. This came into effect on January 1st, 1984 to help the development of stable Caribbean Basic economies by providing beneficiary countries – of which Curacao is one of 17 – with duty-free access to the US market.
The US Consulate General in Curacao advises any US business considering doing business in Curacao to contact the Curaçao Chamber of Commerce and Industry as a first port of call. In addition, locally-based professional business advisers, such as TMF Group, are recommended to help US companies navigate their way through local law and regulations.
Curaçao has concluded a Tax Information Exchange Agreement with the US Government and was an early adopter of the IRS Foreign Account Tax Compliance Act.
Banking and accounting
Curaçao and St. Maarten together have one Central Bank and one currency, the Netherlands Antillean guilder (ANG). This currency has been pegged to the US dollar since 1971 at an exchange rate of ANG 1.79 per 1 USD. The official selling rate for other currencies is set daily based on their rate of exchange with the US dollar.
There is a well-developed banking system and most of the island’s banks have international links with branches of well-known European or American banks. There is emphasis on preventing the banking system being used for fraud and money-laundering. Curaçao has a Reporting Center where any unusual transactions must be reported.
Corporate law is based in Dutch corporate law. The public limited liability corporation (NV) used to be the more usual business entity, but since the introduction of the private limited liability corporation (BV), this has become the most popular.
There are no specific accounting requirements, but it is general practice that when the accounts for international corporations are set up, the requirements for accountants are those that are normally applied in the country of the parent operation.
The reporting requirements for the large NV are more specific than those for the regular NV or BV. It is best to take professional advice as to which requirements apply to your business.
Labour and population
The labour force is estimated at 65,000 and there is a minimum wage for anyone over 21. A residence permit is required for every foreigner who wants to become resident, and a foreigner who wants to work in Curaçao must also have a work permit.
Sales tax of 6% is levied on the import and sale of products and services. Exports are tax exempt. Import duties range from 0% to 57% so again, professional guidance is needed as to what rate applies to which product.
Curaçao has a multi-cultural population, and this is reflected in the island having three official languages: Papiamentu – a local language that is a mix of Portuguese, Dutch, Spanish and English; Dutch; and English.
Spanish is also widely spoken on the island. Because of the large number of immigrants in Curaçao, different population segments also speak Portuguese, French and German, among others.