Starting an e-Zone Company
“The publication of mr. S. of the Greek Corporate Law Business Advice and Advocacy”
Is establishment in the e-zone Curacao or even Export Scheme interesting for me? An E-zone (economic zone) is a government-designated area or building in Curacao. In the economic zone only export-oriented companies may be settled. These companies can provide services, sell products, such as import or export. The customers of these companies must, in principle, be based outside Curaçao. Establishment in the e-zone can be a very interesting investment because of low production and operating costs, including a very low rate of income tax (corporate income tax) of only 2%. In the early 2014’s Curacao introduced a new tax scheme: the Export Regulations. Under this scheme, companiesdon’t need to be established in an e-zone, but they can settle in any place in Curacao. This scheme is already largely in place as an alternative for the current offshore companies, for which the transition goes until 2019. However, the scheme is open to all commercial activities which could also be located in the e-zone. The rate of income tax (corporate income tax) is only 4%. Too good to be true? No. This fiscal facility has been established and approved by the Netherlands and internationally to promote employment, foreign exchange and financial sectors of this attractive island. You can read below how this works.
Index:
1.What is the e-Zone and Export Control in Curacao
2.What does business in the e-Zone or Export Scheme does me?
3.How can I settle my company in the e-Zone or Export Scheme?
4.How do I know exactly what this means to me?
1. What is the e-Zone and Export Control in Curacao?
E-zone (economic zone) is based on the internationally known and recognized concept of the free zone. It is a concession of the Curaçao government to be international interest to entrepreneurs and investors. And thus boost local employment, finance and foreign exchange, and to develop the economy of the island in general. Since early 2014, also introduced the Export Regulations. Under this scheme it’s not necessary to be established in a e-zone building and to use the facilities. Establishment of the company can be at any desired location in Curacao. Establishment in the e-zone or the Export Control is no tax evasion and it is not a ‘shady’ or ‘illegal’ construction. This facility is internationally recognized. Read the white paper “E-zone Curacao and Export Control offers very attractive investment opportunity with very low production and operating costs” for more information on the e-zone.
2 What does settling my business in the e-Zone or Export Scheme does for me?
Suppose you are a business in IT services to customers in the Netherlands mainly through the Internet, and you will achieve an annual pre-tax profit of EUR 100,000. In the Netherlands you have to pay 20% corporate tax, which is EUR 20,000. In the e-zone pay only 2% income tax, namely EUR 2,000. The Netherlands to thrust through profit falls under the participation exemption, so there is no double taxation. (The Export Control exists of 4% income tax.)
With a profit of EUR 100,000 you will save EUR 18,000 per year. Suppose you achieve an annual pre-tax profit of EUR 200,000. In the Netherlands you have to pay 25% corporate tax, which is EUR 50,000. In the e-zone you only pay 2% income tax, namely EUR 4,000. The profit which is send to the Netherlands falls under the participation exemption, so there is no double taxation. (The Export Control exists of 4% income tax.)
With a profit of EUR 200,000 you will save EUR 46,000 per year. It is also possible to continue to carry out part of the trading activities in the Netherlands and part of the work in the e-zone.De profit that is attributable to the work in the e-Zone will be taxed at 2%. (The Export Control exists of 4% income tax.) For example: Consultancy activities are carried out in the Netherlands to Dutch consumers. The profit is EUR 50,000. Online services, marketing and sales operations, help desk operations, call center operations take place in the e-zone. The profit is EUR 100,000. The total profit is EUR 150,000. If all activities held in the Netherlands there would be paid 20% corporation tax on EUR 150,000, iEUR 30,000. In the mixed sample you pa EUR 50,000 20% load, ie EUR 10,000 be paid and EUR 100,000 2%, namely EUR 2,000, thus totaling EUR 12,000 instead of EUR 30,000. Yet a saving of EUR 18,000 per year. The Netherlands to thrust through profit falls under the participation exemption, so there is no double taxation.
The costs associated with an e-zone establishment are disposable and relatively low in view of the expected cost savings, an average of € 6,000 for a single company and EUR 10,000 for two companies, including legal fees and tax structure advice (or EUR 4,000 per company advice without tax structure) . If you are using a trust management for local government, you can expect an average of EUR 5,000 – 10,000 per year for an online company. The costs of establishment and ICT infrastructure and the like are usually considerably lower than in the Netherlands. Other operating expenses are often lower in Curacao. Personnel costs are generally substantially lower and Curacao is a USD economy, which is favorable in principle in relation to the euro.
3 How can I settle my company in the e-Zone or Export Scheme?
The Trust office can help. This is because of the existing extensive knowledge of the Dutch and Curaçao corporate law, ICT law and e-commerce. And because of an excellent network of relevant expert tax lawyers, notaries and trust companies, with which we have excellent personal business relation due to many years of practical experience in Curacao. With an e-zone company or partnership with Export Control, you can use a variety of local and international corporate structures, including a number of simple “standard” structures. It is regularly used a Private Foundation (SPF), an Exempt Company (VBV or NABV) or Trust as a shareholder of an e-zone company. Of course, there are also more complex structures possible.
Of course you can also live in Curaçao which is submitted in time an immigration application.
How does the creation process?
a. We check together if your company or business plan is suitable for establishment in the e-zone or with the Export Regulations, and whether the expected profit level is insufficient.
b. If you do not have your tax lawyer with expertise relevant to the e-zone, the Trus office will refer you to one, accompanied by a relevant expert tax advisor for tax advice structure. We continue to coordinate.
c. Based on the advice that you accepted tax structure we know which entities should be created, with the statutes and if any other legal acts or documents are required.
d. Then we begin the compliance process, with all necessary documents and information is collected and delivered to the attending notary in Curaçao (and if necessary to the trust management).
e. If a trust management is required, we will propose an appropriate trust office and bring you in touch. We continue to coordinate.
f. Finally, the creation by the notary can take place in accordance with the preceding paragraphs and if applicable other legal documents. We continue to coordinate.
4 How do I know exactly what this means to me? Call or email to discuss a voluntary basis or the e-zone in Curaçao or the Export Control is an attractive option for you.
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