CURACAO WELCOMES INVESTORS AND TOURISTS
The economy starts booming again
Although Curacao is only a tiny island in the Caribbean Sea, it is most attractive for investors and tourists. Both will like the climate in terms of taxes and temperature. The financial, legal and technical infrastructure is excellent too.
Curacao is famous for its harbor: it is the largest natural harbor in the Caribbean. Curacao has five major harbors. The most popular harbor is Willemstad harbor, which is 1,400 yards long and 270 feet wide (at it’s narrowest point) with a depth ranging from 50 to 79 feet. The harbor also …
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CORSS-BORDER INJUNCTIONS ISSUED BY A NETHERLANDS ANTILLES COURT
International jurisdiction required
In general, a Netherlands Antilles (e.g. Curacao) court does not have unlimited jurisdiction to impose cross-border injunctions, according to established jurisprudence. It can be deduced from the judgment of March 19, 2004 of the Dutch Supreme Court (Philips / Postech case) that if the court has jurisdiction, it also has jurisdiction to make cross-border orders.
The case was about patents, in which one of the issues was whether the court has (international) jurisdiction to adjudicate the provisions requested in preliminary relief proceedings against defendants based in Taiwan and Switzerland with regard to provisions which are in part …
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ESTABLISHING A BANK ON CURACAO
Not every application is honored
In order to establish a bank on Curacao (the Netherlands Antilles) a license granted by the Central Bank (‘Bank van de Nederlandse Antillen’) is required. The general rule on Curacao is that new banks are only admitted as long as the banking market provides sufficient opportunities for a sound development in the banking sector.
It is required to send an application letter to the Central Bank, which a.o. should include information on the start capital (at least 5 million Netherlands Antilles Guilders in case the bank will become a subsidiary of a foreign bank). In …
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SHAREHOLDER LIABILITY FOR INFRINGEMENTS OF EUROPEAN TREATY
Antitrust law infringements
John D. Briggs and Sarah Jordan (Howrey) published an article in Business Law International (Vol 8 No 1, January 2007, p. 1-37) titled ‘Presumed Guilty: Shareholder Liability for a Subsidiary’s Infringements of Article 81 EC Treaty’.
Article 81 of the Treaty (full text below) prohibits agreements and concerted practices between firms that distort competition within the Single Market. Fines of up to 10% of their worldwide turnover may be imposed on the guilty parties. In 2006, the Commission has adopted new Guidelines on the method of setting fines for companies …
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CROSS-BORDER CONVERSION OF A NETHERLANDS ANTILLES LEGAL ENTITY
Foreign jurisdiction must allow conversion
According to Netherlands Antilles law a limited liability company (NV or BV) or foundation can be ‘converted’ into a company governed by another jurisdiction, provided that this is allowed in accordance with the laws of the new jurisdiction. According to, e.g., Dutch law, such conversion to the Netherlands is in principle not allowed.
It is a general requirement that following the conversion, the existence of the company as a corporate entity in the new jurisdiction can be continued as the chosen corporate entity in accordance with the laws of the new jurisdiction. The reason for …
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THIRD-PARTY-OPPOSITION UNDER THE LAWS OF THE NETHERLANDS ANTILLES
A third party may attack a judgment
Sometimes a judgment may affect the rights of a person or company not being a party to those proceedings. If one was not a party to those proceedings, one cannot appeal such a judgment. Third-party-opposition (in Dutch: ‘derdenverzet’) is a remedy granted to third parties (outsiders) whose rights are thus prejudiced.
An appeal is filed with a higher court. Third-party-opposition, however, is initiated by filing a petition with the very same court that rendered the judgment. Third-party-opposition is possible in both cases on the merits and preliminary relief cases (injunctions).
If the attacking …
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HEDGE FUNDS GOVERNED BY CURACAO LAW
Curacao provides a favorable climate for hedge funds
Curacao (part of the Netherlands Antilles) currently provides a favorable tax, legal and regulatory climate for hedge funds. A fund vehicle can be established very quickly and very flexible. Furthermore, the current regulatory regime regarding the supervision of investment institutions and administrators and new anti-money laundering rules provide for comfort to investors. It is possible in Curacao to discuss in advance with the tax authorities what at arms’ length remuneration will be acceptable. A tax-exempt vehicle and several very low-taxed vehicles are available for hedge funds.
There is no requirement from a …
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CLIENT IDENTIFICATION RULES OF THE NETHERLANDS ANTILLES TO BE EXTENDED TO ATTORNEYS AND CIVIL-LAW-NOTARIES
Further anti-money laundering measures
In the context of the fight against money laundering, the Netherlands Antilles will adopt legislation in the course of 2007 which extends the identification obligation and the reporting obligation in respect of unusual transactions to attorneys, civil-law-notaries, accountants, insurance companies and brokers, realtors, car dealers and jewelers.
The obligations as imposed by law entail that these advisors are required to identify a client before they may provide their advisory services. The actual implications of the new legislation are as yet unclear in a number of respects.
Important regulation regarding anti-money-laundering (“AML”) in the Netherlands Antilles are:
THE INTERPRETATION OF A NETHERLANDS ANTILLES CONTRACT: WHOSE MEANING PREVAILS?
Interpretation may go beyond the four corners of the contract
The question what exactly was agreed between parties to a contract largely depends on the interpretation of the contract, in which principles such as fairness and reasonableness play an important role. In many cases, where contract language is clear and explicit and does not lead to an unacceptable result, a court will ascertain contractual intent from the written provisions of the contract itself and go no further. However, words are not always clear and unambiguous.
Under the laws of the Netherlands Antilles, the answer to the question as to how …
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REPRESENTING A NETHERLANDS ANTILLES PARTNERSHIP
Internal versus external authority
Netherlands Antilles law sharply distinguishes between the capability of a partner to represent a partnership and the acceptability of an act of representation under the contractual relationship among the partners.
These concepts could be labeled as ‘external authority’ and ‘internal authority’ respectively. Although the internal authority can influence the external authority, it is generally possible that an act of representation that is in clear breach of the contractual relationship is nevertheless binding on the partnership. Special rules could apply if the party entering into an agreement with the partnership is aware that the acting partner acts …
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THE PERSONAL LIABILITY OF A DIRECTOR OF A NETHERLANDS ANTILLES COMPANY
Act of tort required
The existence of a claim on a corporation does in itself not cause any liability for the officers or directors of that company to arise. Outside a bankruptcy case, such a liability may only be construed if the claim on the corporation remains unpaid and then only if there is a separate tortuous act by such individual director or officer against the creditor of such claim. At all times, it must be shown that there was a personal wrongdoing by the director or officer involved: the mere capacity does never result in a liability.
In general, …
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FIDUCIARY TRANSFER OF TITLE UNDER THE LAWS OF THE NETHERLANDS ANTILLES
A concept similar to a right of pledge
In the Netherlands Antilles collateral transfer (‘fiduciaire overdracht’) is a common security interest. It is construed as the full transfer of a proprietary right by the debtor to the creditor, under the condition subsequent of satisfaction of the obligation the collateral is to secure.
Once said condition is fulfilled, the ownership of the proprietary right reverts back to the debtor, unless the debtor and the creditor have explicitly agreed that a separate retransfer is required. In that case, there is no automatic effect, but merely a contractual duty to retransfer.
This security …
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