MANAGING A COMPANY WHICH BELONGS TO A FOREIGN OWNER
A contractual arrangement may limit the board’s powers
Shareholders of a Dutch Caribbean NV or BV may choose between the English/American one-board system and the traditional continental European two-tier system. In a two-tier system there is a management board (parallel to the inside directors on a one-tier board) and a separate supervisory board (parallel to the outside directors on a one-tier board). Although every company (NV or BV) has a management board, not every company has a supervisory board.
Article 2:14 of the Netherlands Antilles Corporate Code (a.k.a. Book 2 Civil Code) provides that each member of the board of …
Read the rest »
EMERGENCY MEASURES FOR CREDIT INSTITUTIONS IN THE DUTCH CARIBBEAN
The Central Bank has certain regulatory powers
Not all banks perform well. Sometimes things go wrong. In the Netherlands Antilles the Central Bank has certain powers to take over control, if necessary. The Central Bank may request the Court of First Instance to subject a bank (credit institution) to the emergency measure pursuant to Article 28 of the National Ordinance on the Supervision of Banking and Credit Institutions 1994.
The court may authorize the Central Bank to transfer all or part of the obligations of the credit institution and to partially or entirely liquidate the credit institution. The authorization shall …
Read the rest »
STATUTORY MERGERS UNDER THE LAWS OF THE DUTCH CARIBBEAN
Mergers mostly within a group of companies
A statutory merger involves at least two legal entities. The law uses the terms acquiring and disappearing legal entity. The law specifies that only legal entities having the same legal form may merge, specifying that a BV (closed limited liability company) and a NV (public limited liability company) are considered to be the same. Statutory mergers are used mostly within a group of companies.
Essential for a statutory merger is that the title of all assets and liabilities of one legal entity transfer in their entirety to another legal entity. An actual transfer …
Read the rest »
INVESTMENT COMPANY REGULATIONS IN THE DUTCH CARIBBEAN
Holding companies are not investing
An investment company (NV or BV) is a company that raises or obtains pecuniary means or other property to be used for collective investment with the objective of allowing the participants to benefit from the revenues of those investments.
The Netherlands Antilles National Ordinance on the Supervision of Investment Institutions and Administrators (‘Landsverordening Toezicht Beleggingsinstellingen en Administrateurs’) and the Central Bank’s policy guidelines based thereon do not make entirely clear what is regarded as an “investment”.
The explanatory memorandum to the Ordinance explains that certain activities do not tend to be considered as “investments”, such …
Read the rest »
HARRY POTTER AND THE BATTLE OVER COPYRIGHT LAWS
Can the author come up with a legal spell to prevent the publishing of a HP encyclopedia?
J.K. Rowling is the renowned author of the famous fantasy books about the life of wizardry student Harry Potter. Since the release of the first book in 1997, the series have gained huge popularity worldwide. The books have spawned a series of Potter movies, Potter video games and themed merchandise. The commercial success of the Potter brand has made Rowling one of the highest-earning authors in history. Like with many popular and commercially successful products, there are …
Read the rest »
TRUST COMPANIES IN THE DUTCH CARIBBEAN
Rendering trust services without a license is prohibited
Many international group structures include one or more Dutch Caribbean legal entities or partnerships. The main reasons for this are the internationally competitive conditions for business development in the area of corporate law, the tax system, and the well-developed professional financial services industry of the Netherlands Antilles. Trust companies are involved in setting up and maintaining such structures. On behalf of other enterprises, trust companies conduct the management of ‘international companies’, i.e. companies established in the Netherlands Antilles which, however, on many occasions are (factually) controlled by persons or legal entities from …
Read the rest »
ELECTRONIC TRANSACTIONS IN THE DUTCH CARIBBEAN
A digital signature has the same legal effect as a hand-written signature
The Ordinance on agreements concluded electronically (‘Landsverordening overeenkomsten langs elektronische weg’) became effective on 1 January 2001.
Trade, financial services and other commercial activities are being conducted electronically at a rapidly growing rate. The Netherlands Antilles was ahead of many countries in developing legislation for this field.
The Ordinance provides that an electronic signature shall have the same legal effect as a hand-written signature, and may be admitted as evidence in legal proceedings. An electronic signature is described as electronic data which are attached to or have a …
Read the rest »
COMPLIANCE IN THE DUTCH CARIBBEAN
Curacao considers how the US deals with compliance
Compliance is essentially about systems and procedures at corporations, banks, funds, trust offices, insurance companies and the like, to ensure that their officers and employees are aware of and take steps to comply with the relevant laws and regulations. It is also referred to as ‘regulatory compliance’. Compliance is nowadays, in the aftermath of, Enron, for example, which collapsed in 2001, of the utmost importance. I will briefly discuss several compliance related issues below, however one should keep in mind that the concept of compliance is extremely broad.
The …
Read the rest »
FILING FOR BANKRUPTCY IN THE DUTCH CARIBBEAN
The ultimate recourse against a person not paying his debts
The bankruptcy order can be applied for either by the debtor or by one or more of its creditors. If the debtor is a company then, pursuant to Article 2:8 par. 4 of the Civil Code, the managing directors do not have the authority to file a petition for bankruptcy of the company without prior authorization thereto from the general meeting, unless otherwise stipulated in the articles of association.
The pre-requisites for issuing an order upon an application for bankruptcy, regardless of whether the application is submitted by the debtor …
Read the rest »
DUTCH CARIBBEAN BUSINESS LICENSES
Citizens versus non-citizens
According to the Netherlands Antilles Ordinance on the Establishment of Businesses (‘Landsverordening betreffende vestiging van ondernemingen’, PB 1946 nr. 43) a license is required to establish a company (‘vestigingsvergunning’). A further license is required to operate one as an individual director if one is not a citizen of the Netherlands Antilles (‘directievergunning’).
According to a policy document published by the Department of Economic Affairs (‘Dienst Economische Zaken’) in Curacao that is responsible for the enforcement of aforementioned Ordinance, a person is considered a citizen of the Netherlands Antilles if born in the Netherlands Antilles, …
Read the rest »
PROTECTING ONES ASSETS IN A TAX FRIENDLY ENVIRONMENT
Dutch Caribbean as the jurisdiction of choice
There are millions of people around the world who can be called wealthy. Many of them want to protect their wealth, against political instability, for example. To do so they can choose among various jurisdictions.
The Netherlands Antilles (a.k.a. the Dutch Caribbean) is a jurisdiction of choice one should definitely consider. There are several reasons why the Netherlands Antilles is already the favorite jurisdiction for so many people. One reason is that it is part of the Dutch Kingdom, which is known for political stability. The fact that the Dutch Supreme Court in …
Read the rest »
ORDINARY VERSUS SUMMARY PROCEEDINGS IN THE DUTCH CARIBBEAN
Interlocutory or summary proceedings provide for immediate relief
Article 110 of the Netherlands Antilles and Aruba Code of Civil Procedure (‘the Code’) provides that all adversarial proceedings shall be initiated by means of a petition to the court of first instance. Proceedings so initiated are ordinary proceedings a.k.a. proceedings on the merits.
A petitioner may opt for preliminary relief proceedings (a.k.a. interlocutory proceedings; ‘kort geding’). Article 226 of the Code provides that in urgent cases which require an immediate decision, the plaintiff may request a provisionally enforceable judgement (‘beslissing bij voorraad’).
Article 229 of the Code provides that a provisional …
Read the rest »