SYNOPSIS:
The Netherlands Antilles are located north of Venezuela with a population of approximately 200,000 people. Technically, they are a constituent part of the Kingdom of the Netherlands but, in reality, are self governing save for defence and foreign affairs. Unlike many other 'tax havens' the Dutch Antilles have had a number of treaty partners apart from the Netherlands. However, with the refusal of major countries such as the United States, in 1988, and the United Kingdom, in 1989, to renew the direct treaties, the jurisdiction is unlikely to be used by tax planners save through the Dutch "catalyst" Treaty. Nevertheless, simply by having access to the very extensive Dutch treaty network, the Netherlands Antilles warrant close consideration. Population: 221,000.
LOCATION: Situated in the Caribbean and close to Venezuela. The Netherlands Antilles are Composed of two island groups, been Curacao the biggest island.
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TAX PLANNING CREDENTIALS.: Corporate taxes in the Netherlands Antilles range between 2.4% and 5.5% depending on the corporate structure and the use, if applicable, of the Netherlands double taxation treaty. It should be noted that as a result of pressure from the USA dividend payments originating from Netherlands must either to subject to a withholding tax of currently 7.5% or pay a higher rate of tax in the Netherlands Antilles. In most cases, the election to pay higher taxes is favoured as it is often possible to deduct management fees from taxable profits.
RELATIONSHIP WITH THE U.K.: Although an autonomous country, the Dutch Government is still responsible in some areas and that close connexion, indirectly extends its benefits and links to the rest of Europe and the countries of which The Netherlands have special treaties. Dutch is the official language. However English is widely spoken, being the second largest linguistic group in the islands.
ADVANTAGES OF DUTCH ANTILLES COMPANY
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- Direct access to the Dutch treaty network
- Politically very stable with the local government having a pro-business attitude.
- Associate member of the European Union since 1964.
- The law is based directly on Dutch civil law.
- Excellent communications and significantly more developed than most other jurisdictions in either the Caribbean or South America.
- Very low indigenous taxes for most companies with income being earned from abroad.
- Currency, the Netherlands Antilles Florin, has a set exchange rate with the U.S.$.
DISADVANTAGES:
- The Netherlands Antilles are probably the most famous, or infamous, tax treaty mitigation area in the world subject to counter-measures by many high tax countries. In addition, even the Netherlands has demonstrated less generosity, primarily because of pressure implemented by it's treaty partners, in negotiating it's most recent tax treaty in 1986.
- Netherlands Antilles companies are generally more expensive than those located in other Caribbean jurisdictions.
- Taxes often require to be negotiated by local professionals
TYPES OF DUTCH ANTILLES COMPANIES
The naamloze vennootschap (N.V.) is the only corporate entity available. The minimum nominal share capital is NAF1 50,000 (approximately US$28,000.00) whilst, at least, NAF1 10,000 (approximately US$5,600.00) must be paid up. Bearer shares can be issued. At least one managing director must reside in the Netherlands Antilles, however, most company packages will include this facility. In the vast majority of cases, no annual accounts have to be either submitted or audited but all companies are under a legal obligation to maintain accurate accountancy records for their members. The exceptions to the above occur when large numbers of bearer shares are issued (over NAF1 50,000.00) and/or when the undertakings are publicly listed or involved with insurance, banking or borrowing.
TAXATION
It is very important to note that, with the exception of Diagram # 4 and the reference to Luxembourg, all the examples to date have simply sought to demonstrate the effectiveness of the direct use of the Dutch treaty network. However, obviously even if one has managed to mitigate the various withholding tax rates there will still be liability to the taxes of the receiving parent company. Therefore, to further increase a groups tax efficiency it may be wise to interject a more tax efficient parent such as a Dutch Antilles company. When considering such interjections it is wise to analyse relevant administration, accountancy (if relevant), state and professional fees to ensure that genuine savings are being made. Further, it does not matter what function the conduit firm is carrying out, i.e. holding, licensing or financing, all will be subject - at least in the case of the Dutch Antilles - to the same tax system.
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Banking Confidentiality = 8/10 for non-UK citizens or residents. 5/10 for UK citizens or residents
Banking Facilities = 10/10 Excellent
Legal System = Civil Law
Tax Treaty Network = 8/10 Good, excellent with Holland
Development = 8/10
Reputation = 8/10
Efficiency = 8/10
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General Rating = 7/10 