FREEDOM OF CHOICE UNDER NETHERLANDS ANTILLES CORPORATE LAW
Unprecedented possibilities
The Netherlands Antilles Corporate Act, in force as of 1 March 2004, shows a bold new approach to Netherlands Antilles corporate law as such. One striking aspect is that this legislation gives shareholders far more freedom to organize their company than in the past:
* shareholders of a public limited liability company (‘NV’) or private limited liability company (‘BV’) may choose between the English/American one-board (or one-tier) system and the traditional continental European two-tier system
* there may be voting and non-voting shares; and
* there may be par value shares or non-par value shares.
Karel Frielink Attorney …
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THE CHOICE BETWEEN A PARTNERSHIP AND A COMPANY IN THE NETHERLANDS ANTILLES
Tax and other issues should be considered
What are the choices for a businessman under the laws of Netherlands Antilles for the establishment of a business venture?
The choices are:
– sole proprietorship (‘eenmanszaak’)
– a general partnership (‘vennootschap onder firma’)
– a limited partnership (‘commanditaire vennootschap’)
– a limited liability company, either private or public
It is generally believed that partnership law by its nature is more flexible than corporate law since it may enable the parties to tailor the structure of their cooperation completely to their needs. This is not true for Netherlands Antilles corporate law.
Contrary to …
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NATIONAL ORDINANCE SICKNESS INSURANCE OF THE NETHERLANDS ANTILLES
An insurance to protect employees against the financial consequences of sickness
The National Ordinance Sickness Insurance covers the sickness insurance of employees and certain relatives. The employees that do earn more than the maximum wage as mentioned above are not ensured.
The premium for the employee and his family is calculated based on a percentage of the daily pay of the employee. The percentage is in total 12.5%: 8.3% is for the account of the employer; 2.1% is for the account of employee; 2.1% is for the account of the government.
Karel Frielink Attorney (lawyer) / Partner
NATIONAL ORDINANCE ACCIDENT INSURANCE OF THE NETHERLANDS ANTILLES
An insurance to protect employees against the financial consequences of accidents
The National Ordinance Accident Insurance (‘OV’) contains rules about the insurance of employees against occupational accidents. Among others the OV regulates the right of the employee to medical treatment and nursing care, financial allowances for occupational disability, the premiums that have to be paid and the other responsibilities of the employer and the employee.
The OV obliges the employer to pay a premium to the Social Insurance Bank (‘Sociale Verzekeringsbank‘ or ‘SVB‘). The employer is obliged to pay full the premium for the employee. The premium for the employee …
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SET-OFF UNDER THE LAWS OF THE NETHERLANDS ANTILLES
Certain requirements must be met
Pursuant to the Netherlands Antilles Civil Code (article 6:127 et seq), the authority to set-off (‘verrekeningsbevoegdheid’), exists if
(i) the receivable and the debt (a) are between the same parties and correspond with each other (‘aan elkaar beantwoorden’) and (b) fall in the same estate (‘vermogen’) at both ends and
(ii) the party invoking the authority to set-off has authority both (a) to pay its debt to the creditor thereof and (b) enforce payment of the corresponding receivable (‘afdwingen van de betaling van de vordering’).
The parties to a contract may both restrict and expand …
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CROSS-BORDER BANKRUPTCY AND THE LAWS OF THE NETHERLANDS ANTILLES
The principle of territoriality has been adopted
There is no Netherlands Antilles legislation prescribing the effects in the Netherlands Antilles of a foreign bankruptcy. The Supreme Court (‘Hoge Raad’) in the Hague, the Netherlands, being the Supreme Court for not only the Netherlands, but also Aruba and the Netherlands Antilles, has adopted the territoriality principle on more than one occasion, since at least 1967.
There are Dutch legal writers that have argued that in the Gustafsen/Mosk case (NJ 1999, 316), the Supreme Court has abandoned the territoriality principle. Such standpoint has met opposition and it is questionable whether such standpoint …
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BEING AN EXPATRIATE IN THE NETHERLANDS ANTILLES
An expatriate enjoys certain tax advantages
The Expatriates rules are defined in the Expatriates Decree 1998. An Expatriate is an employee in an employer – employment relationship that immediately and prior to his employment in the Netherlands Antilles, has lived abroad during a continuous period of at least five years.
If all conditions for the Expatriate-status are met there are some wage components that will not be taxed with the progressive wage tax rate of up to 49.4% (in 2006 surcharges included) in the Netherlands Antilles.
The Expatriate has to meet the following conditions:
– the Expatriate has specific expertise …
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FRAUDULENT CONVEYANCE UNDER THE LAWS OF ARUBA
The Actio Pauliana is centuries old
The so-named ‘actio Pauliana‘ enables both third parties and the trustee in bankruptcy to nullify legal acts that would prejudice their ability to find assets against which to take recourse. The requirements are the following:
(a) a legal act performed by the debtor;
(b) the debtor was not obliged to perform the act;
(c) the legal act prejudices one ore more creditors in their ability to find assets against which to take recourse;
(d) the debtor knew or should have known of such prejudice, and
(e) if the legal act was for consideration the …
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YOUR COMPANY HAS BEEN DE-REGISTERED IN ARUBA
Does the company still exist?
Suppose you obtain an extract from the Aruban Chamber of Commerce regarding your company. Although the extract mentions that ‘the company is discontinued since December 30, 2005′ you actually know that it is still alive and kicking. The following serves as a clarification of this somewhat confusing situation.
The company is probably a so called ‘off shore’ company enjoying certain rights related with this status. In order to qualify as an off shore company under the laws of Aruba it is required, amongst others, that the company has a locally established director or representative. Usually, …
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U.S. JUDGMENTS AND ARUBA
The recognition and enforceability of foreign judgments in the absence of a treaty
In the absence of an applicable treaty between a foreign country (for example the U.S.) and Aruba, a judgment rendered by a U.S. court, will not be enforced by the court of Aruba. In order to obtain a judgment which is enforceable in Aruba the claim must be re-litigated before the Aruban court.
Nevertheless, a judgment rendered by a U.S. Court will, under current practice, be recognized by the Aruban court:
a. if the U.S. Court has assumed jurisdiction on an internationally accepted jurisdiction ground;
b. if …
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FILING FOR BANKRUPTCY ON ARUBA
The ultimate recourse against a company not paying its debts
The application for a bankruptcy order can be made either by the debtor itself or by one or more of its creditors.
If the debtor is a company, the managing directors do not have the authority to file a petition for bankruptcy of the company without authorization thereto from the general meeting.
The pre-requisites for the making of an order on the application for bankruptcy, regardless of whether the application is made by the debtor or by any of the creditors, is that the debtor must be in the situation …
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THE LOCATION OF SHARES UNDER THE LAWS OF ARUBA
Where are the shares and where can they be seized?
Aruba has a broad range of possibilities for creditors to get security for an alleged claim, even before judgement. Suppose you want to collect a claim and you are considering putting certain or all of your counterparty’s assets under arrest (freezing/seizing assets or conservatory attachment) to secure payment. If among those assets are shares in a company, the question arises in which country you should ask permission for an arrest.
Under Aruban international private law, the general rule is that the ‘lex rei sitae’ determines who holds legal title to …
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