Curaçao Geography
The
jurisdiction of Curaçao was created
on October 10, 2010 when the Netherlands
Antilles was dissolved and became two separate
jurisdictions, the second being Sint Maarten.
At the same time, the other three islands
that made up the Netherlands Antilles (Bonaire,
Sint Eustatius and Saba) became special
overseas municipalities of the Netherlands.
Curaçao lies about 50 km north of
Venezuela; Miami is 2.5 hours by air from
Curaçao, which has the capital Willemstad.
The
land area is 444 sq km, with a coast line
spanning 364km. The climate is tropical
(12 degrees from the equator), but cooled
by northeast trade winds. Average temperature
is 27 C. Rain falls from October to February,
mostly at night.The landscape is generally
hilly with a volcanic interior. The highest
point is 372m at Mount Christoffel. Natural
resources include phosphates and salt, but
only 10% of the land is cultivable.
Hurricanes
can occur between July and October but rarely
threaten Curaçao which lies south
of the Caribbean hurricane belt; only three
have come near this century.
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Curaçao
Population Language and Culture
The population was estimated at 142,180
in 2010. The official (and used) language
is Dutch, but 90% of the local population
speak Papiamento, a Creole dialect which
is a mixture of Spanish, Portuguese, Dutch
and English. Spanish and English are also
widely spoken, particularly in Willemstad.
Ethnically, the population is 85% mixed
black, the balance being Carib Amerindian,
white and East Asian. 80% of the population
is Catholic, with substantial Protestant,
Jewish and Muslim communities. There is
religious and ethnic harmony.
The
islands were discovered by the Spanish in
1499; the peaceful native inhabitants, a
tribe of Arawak Indians, were mostly transported
to Hispaniola. In 1634 Curaçao fell
to the Dutch and became an important base
for expeditions against the Spanish. During
the 18th century Curaçao became a
trading port for pirates, American rebels,
Dutch merchants, Spaniards and Creoles from
the mainland. The English took Curaçao
briefly in 1800 but Dutch rule was restored
in 1816 and the port was declared free.
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Curaçao Government
Curaçao is a country within the Kingdom
of the Netherlands, with full autonomy in
internal affairs; it is a parliamentary
democracy and is politically stable. The
Netherlands government is responsible for
defense and foreign affairs. The legal system
is based on Dutch civil law but includes
some influence from English common law.
Appeals from the Curaçao courts are
to the Netherlands Supreme Court in the
Hague.
The
Queen of the Netherlands is the Head of
State. A federal or central government takes
care of state matters, comprising a Governor
appointed by the Queen for a period of 6
years, an appointed Council of Ministers,
and an elected 22-member parliament (De
Staten) which serves a term of four years.
There are a number of small political parties.
A
constitutional crisis erupted in 2004 due
to irreconcilable differences between the
constituent islands, and a joint Commission
appointed by the Netherlands and the local
government concluded that the jurisdiction
should be broken up, with the islands of
Curaçao and St Maarten becoming autonomous
countries alongside the Netherlands and
the Caribbean island of Aruba, whilst the
remaining three islands - Saba, Bonaire
and St. Eustatius - should be brought under
the direct control of the Dutch government
in The Hague.
In
December, 2004, the Dutch cabinet approved
this proposal, saying that the new constitutional
arrangement must guarantee the quality of
the judicial system, sound governance and
responsible financial management.
In
January, 2005, the islands formed a series
of working groups to discuss detailed implementation
of the new constitutional proposals.
In
January, 2006, representatives from the
Dutch government, Aruba and the five islands
of Bonaire, Curaçao, Saba, St Eustatius
and St Maarten agreed a roadmap towards
new constitutional relations at the latest
Round Table Conference on constitutional
affairs.
Bonaire,
Saba and St. Eustatius have attained the
new status of “specific nature” within the
Kingdom and have direct ties with the Netherlands,
while Curaçao and St. Maarten have country
status within the Kingdom.
It
was originally the aim of the agreement
to dissolve the Netherlands Antilles by
15th December, 2008, but the final date
was delayed by nearly two years to October
10, 2010.
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Curaçao Relationships with EU
As a country within the Kingdom of the Netherlands,
Curaçao is an associate of the EU.
Its citizens carry EU passports, and have
free rights of entry, residence, work etc
in the EU.
In
so far as Curaçao applies the common
import tariff of the EU single market, it
can freely export products into the EU which
it has sourced externally, without additional
processing. Products originating in Curaçao,
or which have undergone 'substantial economic
transformation' there, have EU origin.
However,
Curaçao does not form part of the
EU fiscal area and does not apply Dutch
or EU taxes.
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Curaçao
Economy and Currency
The currency at the time of writing is the
Netherlands Antillean guilder, gulden or
florin (these terms are used interchangeably).
The rate of exchange is fixed against the
US dollar at US$1 = ANG1.790. It had been
planned to introduce the Caribbean Guilder
for Curaçao and Sint Maarten at the
same time that the Netherlands Antilles
were dissolved. However, cost and logistical
factors have delayed the introduction of
the new currency until at least January,
2012, with further delays or indeed an adoption
of the US dollar a distinct possibility.
Curaçao
is not naturally well-favoured with domestic
resources; due to the lack of arable land
and water, agriculture accounts for only
around 1% of GDP. The economy is largely
based on tourism, petroleum processing/trans-shipment
and offshore finance. Almost all the consumer
goods are imported from Venezuela and the
US; as a result local inflation tends to
reflect international levels.
After
oil was discovered in Venezuela, the Dutch-British
Shell oil company built a refinery on Curacao,
which dominated exports until it was closed
in 1985, with dismal effects on the economy
and employment. A limited re-opening has
helped the economy to grow steadily more
recently, but unemployment is still high
by international standards.
The
Government's fiscal position has deteriorated
sharply in recent years, and there is high
debt with a substantial annual budget deficit.
The islands receive approximately USD100m
a year in aid from Holland and international
agencies. GDP per head was USD21,500 in
2009.
Growth
in 2007 improved to about 3%, and remained
at that level in 2008. In 2009, growth of
-0.5% was recorded with a modest increase
to 0.4% growth estimated for 2010.
The
offshore financial sector began during the
German occupation of Holland in the Second
World War, when Dutch companies sought corporate
and financial refuge, and has developed
steadily ever since, giving Curaçao
in particular a more sophisticated business
infrastructure than most countries in the
region.
The islands have good natural harbours,
and there is a ship repair facility in Curaçao.
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Curaçao Entry and Residence
Nationals of Belgium, Germany, Luxembourg
and the Netherlands can enter using national
identity cards; nationals of the US can
enter with voter registration cards or birth
certificate; nationals of Canada with birth
certificates or proof of citizenship; nationals
of Brazil, Venezuela, Mexico, San Marino
and Trinidad & Tabago can enter with
national identity cards. All other nationals
need passports.
Entry
for tourist purposes does not require a
visa, except for nationals of most former
Eastern bloc countries, China, Cuba, Dominican
Republic, Haiti, North Korea, Libya, Cambodia
and Vietnam. Tourist entry is for 14 days,
and another 14 days on local application,
except for Belgium, the Netherlands, Germany,
Luxembourg, the UK, the US, Spain and a
number of South American, African and other
countries, for whom it is 90 days (and another
90 days on local application).
NB
These lists can change, and you should check
with your travel agent before travelling.
Visas
can be obtained from Dutch embassies around
the world. In all cases of tourist entry
a return or onward ticket is required.
Longer
stay, for work or residence, requires residence
and/or work permits, unless you are Antillean,
or already a long-time resident (more than
10 years). Residence permits have to be
applied for in person at the Governor's
offices; a good deal of personal, medical
and financial information and documentation
is required. Work permits have to be applied
for by employers, after advertising a position
in local newspapers and failing to fill
it.
Prominent
political figures met in the Netherlands
Antilles in mid-2005 to discuss a new project
aimed at tightening up the jurisdiction's
immigration procedures. Its main objective
is to prevent undesirable goods and persons
from entering the Netherlands Antilles and
Aruba. It also seeks to prevent illegal
movement of persons and goods from the Dutch
Caribbean territories to the Netherlands.
In
April 2006, it emerged that the
St Maarten authorities were studying proposals
that would streamline the process for applying
for residency and work permits in the jurisdiction,
a system which attracts much criticism for
its opacity and complexity.
Meanwhile,
in early March 2007, it was announced that
a protocol had been signed by Justice Minister
David Dick and the Lt. Governors of the
islands of the Netherlands Antilles for
establishing a new organisation that will
be in charge of immigration issues.
When
operative, the new organisation will deal
with the administrative work in connection
with issuing residence permits, with the
police force taking sole responsibility
for border control.
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Curaçao Business
Envionment
International (offshore) business in take
place in Willemstad on Curaçao; here
the business and telecommunications infrastructure
is good, but in other regions much less
so.
There
are no government restrictions on foreign-owned
businesses in Curaçao, and inwards
investment is encouraged. The strongest
commercial links are with the Netherlands
and the United States, and this is reflected
in the available selection of local professional
services and their personnel and skills.
Likewise, there is a sophisticated financial
structure in place which is based on a Netherlands
model.
For
anglo-saxon or non-European investors, the
dominant role of the civil code in local
business law must be carefully considered.
While for those who are familiar with civil
code jurisdictions, it offers a perfectly
workable and effective business environment,
others, especially non-Dutch-speaking others,
may find it strange at best, or excessively
slow, bureaucratic and expensive at worst.
The
close connections of Curaçao with
its 'parent' country, and the EU, mean that
the jurisdiction is comparatively 'leaky'
as regards banking secrecy. Curaçao
preserves a reasonable degree of fiscal
secrecy, but it is not among the top players
in this respect, and the jurisdiction was
obliged to accept the EU Savings Tax Directive
from 2005.
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Curaçao Free Trade Zones
Free trade zones are located at the harbour
at Willemstad, the Hato-Curacao international
airport and the Industrial Park. The free
zones are secure and permanently maintained;
they are fully serviced, and have telecommunications
connections.
The
free trade zones are an effective distribution
centre for export to the Caribbean, Americas
and the EU. There are no customs duties
imposed for imports, trans-shipment and/or
export of goods; foreign exchange transactions
in respect of free zone goods are exempt
from commission. Twenty five percent of
total sales may be made to the local market.
Profits
on export sales from the free zones are
taxed at 2%.
As
of April 1, 2001, special tax legislation
for international Internet companies on
Curacao came into force to act as an incentive
to persuade e-commerce companies to relocate
their activities to the Island. The new
law replaced the old Free Zone law and governs
'E-Zones'. Only companies with a capital
divided into shares may perform activities
in the e-zones including trading or providing
services to companies located outside Curaçao.
A
company may be allowed to conduct business
with other firms located in an e-zone but
the company has to apply to the local authority
before doing so. If given the go ahead the
company must meet certain criteria relating
to price setting, quality of the goods and
services on offer and the distribution of
goods. The turnover generated through local
business may not exceed 25% of the total
turnover.
In
terms of profit tax, the profit of companies
within the e-zones is taxed at 2% - including
surtax - until January 1, 2026. This rate
is not applicable on the profit of an e-zone
company if it is generated by the sale of
goods or services to companies located in
the former Netherlands Antilles or generated
through the rendering of services to affiliated
companies located in the country. In addition
there is no import duty or turnover tax
charged on goods entering the e-zones.
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Curaçao Import and Foreign Capital
The Central Bank of Curaçao and Sint
Maarten regulates exchange control. Imports
and exports may be transacted in any convertible
currency except Netherlands Antilles guilders.
Foreign exchange dealings are reported for
statistical purposes only (!).
A licence is required for the investment
of any foreign capital into the Netherlands
Antilles and is only permitted if the investment
enhances the economy and social environment
of the jurisdiction. A license is also necessary
for the repatriation of capital and earnings
from the Netherlands Antilles. Licenses
are usually granted as there are no laws
contrary to such repatriation.
Holding
companies in Curaçao can apply to
be exempted from foreign exchange restrictions.
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Curaçao Foreign
Investment Regime
Incentives are available to foreign investors
including reduced rent of up to 40 per cent
for buildings in the free zone (e-zones,
see above); duty free building materials,
machinery and equipment; an annual investment
allowance of eight per cent on the total
investments for the first two financial
years; unlimited use of carry-over losses
incurred over the first four years of the
company's business. A business Development
Scheme is available to provide export assistance.
Financing assistance is available through
OBNA and Korpodeko, and trade agreements
with the EU and USA are established.
Further
investment incentives and subsidies are
available to both foreign and domestic businesses
located in the jurisdiction.
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