Introduction As per January 1, 2012 an interesting new concept has been introduced in the Curacao Tax Code, namely The Curacao Transparent Company. The concept of Transparent Companies is relatively new concept and could be considered one of the most fascinating developments in the international corporate tax planning arena.
Main corporate characteristics The essential feature of The Curacao Transparent Company is the fact that it combines the organisational flexibility and tax treatment of a partnership with limited liability for its shareholders. This limited liability is possible because The Curacao Transparent Company is a legal person separate from its shareholders. The Curacao Transparent Company can undertake the same actions as a natural person. It has the ability to enter into contracts, own assets and will continue in existence in spite of any changes of shareholders. The fact that it is a separate legal entity makes it more closely akin to a company than to a partnership. The concept is similar to that of the US Limited Liability Corporation, a US legal entity which, generally is not subject to US taxation. Although the Curacao Transparent Company is a legal entity, it is taxed like a partnership, so no tax is assessed on the Curacao Transparent Company, but profits are only taxed in the hands of the shareholders. Therefore, the Curacao Transparent Company is tax transparent. Their profit are taken to flow through to its shareholders, and if the shareholders are non-Curacao resident and the Curacao Transparent Company does not receive Curacao source income, then in theory the Curacao Transparent Company
should not be subject to any Curacao tax. It is possible for an offshore company, to act as shareholder of a Curacao Transparent Company.
SHAREHOLDERS
A minimum of one shareholder is required and shares can be issued in either registered or bearer form. The directors are required to maintain a register of shareholders and this must be made available for public inspection only for as long as the shares are partly paid. If all shares are fully paid then the identity of the shareholders can remain completely confidential.
DIRECTORS
There is a board of managing directors, minimally one, who can be corporate bodies or individuals. The company must appoint either at least one locally resident managing director or a locally resident registered representative. There may also be a board of supervisory directors to oversee and advise the managing directors. Details of the directors are available for public inspection so anonymity can only be retained by employing third party professional directors.
ANNUAL REPORTING
Every company must file an annual tax return accompanied by properly drawn up financial statements. It is not a legal requirement that the financial statements be audited.
TIMESCALE
Incorporation cannot proceed until the minimum paid in capital has been deposited in Curacao. Thereafter incorporation can be achieved within 7-10 days. Ready-made companies are available but can only normally be purchased at a surcharge.
RESTRICTIONS ON NAME AND ACTIVITY
Names must end with the initials “B.V.” or “N.V”. Names need not be in the Dutch language but must be in Roman script. Names should be sufficiently individual so as to prevent confusion with existing companies and names which indicate an activity are only acceptable if the implied activities are to be performed by the company.
LOCAL REQUIREMENTS
As a matter of local company law the company MUST maintain a registered office address within Curacao and must also register itself with a local Chamber of Commerce. For practical reasons a company must also appoint a local resident agent who will manage the affairs of the company in Curacao or, alternatively, as mentioned above, the company may elect to appoint a locally resident managing director instead. We would normally provide these services as part of our domiciliary service fee.
