Curaçao’s structuring options attract estate planning advisors and family offices

The Caribbean island is re-establishing its credentials as an international financial centre

Financial services have been a big part of Curaçao’s economic mix since the 1940s, and today the Caribbean island is re-establishing itself as a major financial hub in the region.

It’s doing so with a combination of forward-thinking regulation, stable infrastructure and a reputation for good governance. Curaçao is part of the Kingdom of the Netherlands and mimics the European country’s solid legal system – which includes the right to appeal to the Supreme Court in The Hague.

Curaçao also has a range of beneficial options for individuals, family offices, funds and others looking to house corporate entities on the island.

The island’s major financial vehicles are the Curaçao Trust, the Curaçao Private Foundation and the Curaçao Investment Company (CIC). Each appeals to a different kind of investor, but all take advantage of Curaçao’s strong financial infrastructure and business-friendly environment.

Foundations and trusts in Curaçao

Private foundations and trusts in Curaçao differ in the details but offer many of the same advantages.

For example, separation of assets means that, from an asset protection perspective, your property, art or investment portfolios held in either type of structure are protected.

In both cases, the income or capital gains received from passively held assets are subject to 0% profit tax in Curaçao.

And similarly, no withholding taxes are levied in Curaçao on dividend, royalty or interest payments from either private foundations or trusts.

Choosing the right Curaçao structure for you

So why choose one over the other? Partly, it’s down to familiarity and comfort.

While US and UK investors tend to be more familiar with Anglo Saxon trust structures, those from mainland Europe and Latin America (among others) are often more comfortable with the private foundations.

There are subtle differences that may be relevant to individual clients. For example, assets are legally held by a private foundation but in the case of a trust, the trustee holds the assets.

In addition to asset protection, both the private foundation and the trust also offer solid privacy protection. As well as to strict identification laws for service providers – imposed by local regulators to ensure compliance with international standards – Curacao has privacy laws in place to ensure discretion.

Articles of association and trust deeds can include tailor-made clauses and be in either English, Spanish or Dutch.

Foundations also have a degree of flexibility not present with trusts. There are no limits in terms of the life cycle of the entity, its existence without assets and the number of beneficiaries.

Finally, private foundations and trusts can be especially suitable for estate planning purposes, so that future generations are taken care of in the unfortunate event of death.

Where does a Curaçao Investment Company (CIC) fit in?

Like trusts and foundations, companies that meet the criteria for CIC status benefit from a zero tax rate.

The real difference with a CIC is that it suits more active clients. All three vehicles can, for example, hold investment portfolios, but only with a CIC can a director actively manage the portfolio themselves.

That potential for activity brings other considerations into play. For example, Curaçao has stringent rules around financial statements and economic substance that must be adhered to.

But the advantages of a well-established legal framework and solid financial infrastructure are integral to the CIC offer, just as they are with the island’s other entities.

Curaçao offers options for investors

The benefit of having three well-considered alternatives for structuring purposes is that it offers options for investors and provides Curaçao with the capabilities to serve clients from around the world.

The island has another advantage in this regard. Curaçao is something of a melting pot, with a unique blend of European, Latin American and North American cultural influences. Most Intertrust Group employees on the island speak three or four languages, including English and Spanish.

If there is anybody that really knows how to connect with their clients and provide personalised service, it’s Intertrust Group in Curaçao.

In Curaçao, investors from across the world will find a financial services sector with both firm regulatory foundations and an understanding of their different needs and expectations.

Why Intertrust Group?

• Intertrust Group is well established in Curaçao and can guide clients through the entire process of incorporating, maintaining and, if necessary, liquidating corporate entities.
• We can take care of all fiduciary and compliance matters – including bookkeeping and accounting services – and can act as an intermediary.
• As a strategic partner, our proprietary innovative technologies are combined with global knowledge and experience to deliver a wide range of added-value services.
• Intertrust Group is a publicly listed company with 70 years’ experience in providing world-class trust and corporate services to clients around the world.