INVESTMENT INSTITUTIONS IN CURACAO AND ST. MAARTEN
Raising money without a license is prohibited
The National Ordinance on the Supervision of Investment Institutions and Administrators 2002 (Landsverordening toezicht beleggingsinstellingen en administrateurs, a.k.a. “NOSIIA”) of both Curacao and St. Maarten prohibits raising, or obtaining, pecuniary means or other property for the purpose of participating in an investment institution that has not been granted a license by the Central Bank of Curacao and St. Maarten, and prohibits offering participating interests in such an investment institution in or from Curacao or St. Maarten respectively.
Investment institutions may be exempted from this prohibition if the moneys or goods to be exchanged for …
Read the rest »
TERMINATION OF EMPLOYMENT AGREEMENT AND REDUNDANCY
Termination by mutual consent is preferable
In general, Curacao labor law provides for the following ways to terminate an employment agreement: (i) termination by giving notice, (ii) dissolution by the Courts and (iii) termination by mutual consent.
Prior to giving notice, an employer must obtain a permit from the Director of the Directorate of Labor Affairs. The Director will determine whether there is a valid reason for the dismissal. In the case of redundancy the employer is obliged to provide a detailed financial justification thereof. If in agreement, the Director of the Directorate of Labor Affairs may issue a permit …
Read the rest »
THE RHYTHM AND BLUES OF CURACAO CONTRACT LAW
Principle of fairness and reasonableness
When considered in the perspective of the laws of Curacao, the reliance on or the enforcement of contractual terms and conditions contained in any agreement, may under certain circumstances be contrary to the overriding principle of ‘fairness and reasonableness’ (redelijkheid en billijkheid) which governs the relationship between the parties to an agreement. Prof. Tjittes calls this good faith principle the Rhythm & Blues of our legal system.
Civil law systems such as the Dutch, French, German, or our system, explicitly espouse and apply this principle, whereas common law systems (e.g. English common law) do not …
Read the rest »
U.S. JUDGMENTS AND CURACAO
The recognition and enforceability of foreign judgments in the absence of a treaty
In the absence of an applicable treaty between foreign countries (for example the U.S.) and Curacao, a judgment rendered by a U.S. court will not be enforced by Curacaoan courts. In order to obtain a judgment which is enforceable in Curacao the claim must be re-litigated before the Curacao courts.
Nevertheless, a judgment rendered by a U.S. Court will, under current practice, be recognized by a Curacaoan court
Read the rest »
SECURITIZATION IN CURACAO
Curacaoan special purpose vehicles are commonly used in cross–border financing transactions
Curacaoan special purpose vehicles (SPVs) are commonly used in both cross–border financing transactions as well as in Curacao domestic financing transactions. As far as cross–border transactions are concerned, (synthetic and cash) securitizations, repackagings, collateralized debt obligations (CDOs), collateralized loan obligations (CLOs), leasing transactions, MTN and other note issuance programs are among the most popular transactions involving a Curacao SPV.
There are a number of reasons that make Curacao an attractive jurisdiction in which to set up SPVs in structured financing transactions. The first of these is the favorable Curacaoan …
Read the rest »
THE ANNUAL ACCOUNTS OF A LARGE CURACAO COMPANY
Stricter rules for large companies
Under Curacao law the annual accounts of limited liability companies which do not qualify as so called large companies, need to be prepared in accordance with generally accepted standards and shall provide sufficient insight as to enable a sound judgment to be formed regarding the assets and the results and, to the extent the nature of the annual accounts so permit, regarding the solvency and liquidity of the company (article 2:116 (4) Curacao Civil Code). This is comparable to the principles of good business practice (goed koopmansgebruik).
For large companies the legislator chose a tighter …
Read the rest »
SUMMARY PROCEEDINGS IN ARUBA, BONAIRE, CURACAO AND SAINT MAARTEN
Preliminary relief within several weeks, sometimes within days or hours
In all matters for which an immediate injunction, measure, or decision is required, the parties may address themselves to the Courts. If the matter does not require immediate resolution, the Court will deny the relief sought and refer the parties to the normal procedure. These preliminary relief proceedings (kort geding procedure) differ substantially from, for instance, US summary proceedings.
This type of intervention by the Courts is sought in many kinds of matters, including disputes with shareholders, attachments, or the enforcement of judgments. At the request of the claimant, the …
Read the rest »
GRANTING DISCHARGE TO MANAGING DIRECTORS
Discharge is not bankruptcy proof
The Civil Codes of Curaçao, Sint Maarten and Bonaire do not contain provisions specifically dealing with discharging managing directors from liability. Neither is there conclusive Dutch Caribbean case law available yet.
Managing directors of a limited liability company (NV or BV) can be discharged from their liability towards the company. Managers can be discharged of liability by an express shareholders’ resolution, however the articles of many companies contain a provision stating that approval of the annual accounts by the shareholders’ meeting discharges the managing director from his/her liability towards the company with regards to the …
Read the rest »
STATE-OWNED ENTERPRISES LACK OF INDEPENDENT SUPERVISION
Independent supervision should be mandatory for government-owned entities
It has been my opinion for many years already that government-owned companies should be kept out of the political sphere as much as possible, so that they may benefit from a commercial, businesslike and market-oriented management. In doing so they also run less of a risk of being milked or used as political toys.
Recently, I commented on the model articles of association (statuten) drawn up for government companies by order of the country Curacao. They grant the shareholders meeting (i.e. the government) and the board of supervisory directors of the companies in …
Read the rest »
TRUST SERVICE PROVIDERS IN CURACAO
TSPs are supervised by the Central Bank
Many international group structures include one or more Curacao legal entities or partnerships. The main reasons for this are the internationally competitive conditions for business development in the area of corporate law and the tax system in Curacao, as well as the well-developed professional financial services industry. Trust Service Providers (“TSPs”) are involved in setting up and maintaining such structures. TSPs conduct the management of legal entities and partnerships (“client companies”) on behalf of other enterprises. Management usually involves the TSP acting as manager of the client company and providing a correspondence address …
Read the rest »
BANKING REGULATIONS IN THE DUTCH CARIBBEAN
Soliciting funds requires a license
The Netherlands Antilles was dissolved on October 10, 2010. Prior to that date the Netherlands Antilles consisted of Curacao, St. Maarten, Bonaire, St. Eustatius, and Saba, and formed, together with the Netherlands and Aruba, the Kingdom of the Netherlands. Curacao and St. Maarten have become independent countries within the Kingdom. They stand on equal footing with the Netherlands and with Aruba, each country with its own set of laws. Bonaire, St. Eustatius and Saba (the “BES-islands”), have, as public entities, become part of the Netherlands. The civil, corporate and banking laws of Curacao, St. Maarten …
Read the rest »
GOVERNMENT OWNED ENTITIES IN CURACAO
Concerns about additional authorities Ministers
Attorney Karel Frielink is concerned about the additional authorities which cabinet-members have appropriated over government NV’s.
According to Frielink, who is also President of the Bar Association, these extra authorities increase the chance of ‘political influencing, favoritism and other forms of abuse’ within government institutions.
In an opinion paper, published in the Antilliaans Dagblad, Frielink comments on the model articles of association (statuten) recently drawn up for government companies by order of the country Curacao. According to the government’s explanatory notes, the new model articles of association particularly dwell on the exceptional position of government NV’s …
Read the rest »