ASSIGNMENT OF RECEIVABLES IN CURACAO

Notification no longer necessary for perfection of assignment

Under Curacao law the transfer of ownership requires transfer of title (levering) pursuant to a valid legal title (geldige titel) by a person who has the power of disposal over the asset (beschikkingsbevoegheid) being transferred. The rules on transfer of title (levering) are equally applicable to the creation of a right of pledge over receivables. Until recently, the Curacao Civil Code, allowed for the following two methods of transfer of title (levering) of receivables:

  • By means of a deed of assignment (cessie) signed by the assignor and assignee or by the assignor …
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  • 04
    Apr 2012
    CATEGORY

    Legal

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    REGULATORY LEGISLATION IN CURACAO

    General requirements on the business operation

    Regulatory legislation in Curacao does not distinguish between different kinds of products, such as for instance hedge funds, but is of a more general nature. The regulatory legislation of Curacao applicable to financial institutions is divided into four categories being: credit institutions, institutional investors, investment institutions & administrators and trust service providers.

    The authority entrusted with the supervision on the financial institutions mentioned above is the Central Bank of Curacao and Sint Maarten.

    The regulatory legislation does provide for general requirements on the business operation of the financial institutes involved. The National Ordinance on …
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    12
    Mar 2012
    CATEGORY

    Finance

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    CURACAO TRUST LEGISLATION

    Entered into force on 1 January 2012

    On January 1st 2012, new legalization entered into force pursuant to which it is now possible to set up a trust, similar to the trust in Anglo-Saxon common law jurisdictions, in Curacao. This trust is a legal exception to the paritas creditorum rule as we know it and serves as an important instrument which could be used for asset segregation purposes.

    With the introduction of the Curacao Trust and the new paragraph 3 to section 231 of Book 3 of the Curacao Civil Code the need for a parallel debt construction in the …
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    29
    Feb 2012
    CATEGORY

    Finance

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    PARALLEL DEBT IN CURACAO

    New legislation

    It has become market practice in Curacao, and also in the Netherlands, to create a separate (parallel) obligation, owed by the borrower (or guarantor) to the security agent in its own name, on the terms and in an amount equal to the original (principal) obligations owing by the borrower (or guarantor) to the lenders.

    The security rights are then granted to the security agent in its own name to secure the parallel debt. This “parallel debt” structure is usually reflected in the facility agreement and gives the security agent an own and independent right to demand payment by …
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    18
    Feb 2012
    CATEGORY

    Finance

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    INQUIRY PROCEDURE INTRODUCED IN CURACAO

    The Joint Court is the forum of choice for corporate disputes

    As per January 1, 2012 the amended Corporate Code (Book 2 Civil Code) of Curacao entered into force. The new legislation introduces a so-called inquiry procedure for, amongst others, limited liability companies. The inquiry procedure (a.k.a. investigation proceedings) can result in a court ordered investigation into the affairs of a corporation.

    Shareholders of such a corporation (i.e. an NV or BV) may file a petition with the Joint Court of Justice of Aruba, Curacao and St. Maarten, and of Bonaire, St. Eustatius and Saba (the ‘Joint Court’). Pursuant to …
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    27
    Jan 2012
    CATEGORY

    Corporate

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    APPELLATE PROCEEDINGS IN THE DUTCH CARIBBEAN

    Full review of the case

    Appellate proceedings in the Dutch Caribbean provide for a full review of the appealed decision: the grounds on which the Appellate Court can reverse the original judgment are not, as in certain other jurisdictions, limited to procedural matters. It is furthermore permissible to introduce new documentary evidence in the course of appellate proceedings. If the appealed judgment contains a final decision as regards the dispute the Appellate Court will either confirm the judgment or it will itself render a replacing decision: the case will not be referred back to the Court of First Instance.

    Furthermore, …
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    21
    Dec 2011
    CATEGORY

    Legal

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    INSURANCE BUSINESS IN ARUBA (II)

    Different insurance contracts

    According to the SOSIB a “life insurance agreement” is an insurance contract concerning the payment of cash benefits related to the life or death of man, and a “general insurance contract” is an insurance contract, other than a life insurance contract.

    Generally, an insurance contract is understood to be an agreement whereby an insurer commits itself to the insured, against receipt of a premium, to compensate the latter for a loss, damage or loss of expected advantage which the insured could suffer as a result of an uncertain event.

    There is no existing case-law or regulatory directive …
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    14
    Dec 2011
    CATEGORY

    Legal

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    INSURANCE BUSINESS IN ARUBA (I)

    The Central Bank of Aruba is the regulator

    The Central Bank of Aruba supervises insurers incorporated in Aruba and the branches and agencies in Aruba of insurers incorporated outside Aruba based on the State Ordinance on the Supervision of the Insurance Business (SOSIB).

    The SOSIB, effective since 2001, stipulates that life and non-life insurance business must be carried out by separate legal entities. The Central Bank of Aruba shall decide whether an action or a combination of actions does or does not constitute as being engaged in the life insurance business or the general insurance business, and whether an action …
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    05
    Dec 2011
    CATEGORY

    Legal

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    CREDIT INSTITUTIONS IN ARUBA

    A license is required

    According to Section 4 of the Aruba State Ordinance on the Supervision of the Credit System 1998 (SOSC), no enterprise or institution established in Aruba shall pursue the business of a credit institution unless it has obtained authorization to that end from the Central Bank. No enterprise or institution established outside Aruba shall pursue the business of a credit institution through a branch in Aruba, unless it has obtained authorization from the Central Bank to do so (Section 24(1) SOSC).

    A “credit institution” under the SOSC means an enterprise or institution, not being an institution established …
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    29
    Nov 2011
    CATEGORY

    Finance

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    LEGAL MERGERS IN CURACAO

    The Curacao Civil Code provides for a simplified merger procedure

    The acquisition of a business enterprise may take place through the purchase of shares (take-over), the purchase of assets and liabilities or a legal / statutory merger. The Curacao Legal Code on corporate and other legal persons contains detailed provisions for mergers of companies limited by shares (NV) and private limited companies (BV).

    Basically, a legal merger entails the absorption of one legal entity by another in exchange for shares, or even without such exchange. The absorbed entity ceases to exist. A legal merger requires a notarial deed. Legal mergers …
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    21
    Nov 2011
    CATEGORY

    Corporate

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    THE CURACAO MEMBER-MANAGED COMPANY

    The right form for small businesses

    Until March 1, 2004 only manager managed companies were known. According to the current Curacao Civil Code, the articles of a company may provide that such company be a member managed company, which is a company without a board of directors. The shareholders (members) are then in charge of the company, including its day-to-day affairs. A member managed company is suitable for smaller companies, e.g. family businesses, with only one or a few shareholders.

    If such designation is absent in the articles of a company, the company will be a manager managed company. The designation …
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    09
    Nov 2011
    CATEGORY

    Corporate

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    THE CURACAO PRIVATE FOUNDATION

    A Private Foundation can be used for tax planning and asset protection The Curacao Private Foundation was introduced by the National Ordinance Regarding Foundations as published on October 31, 1998. Since March 1st, 2004, these rules are laid down in Book 2 of the Curacao Civil Code. The Private Foundation possesses corporate personality but does not have share capital. The Private Foundation is incorporated by deed executed before a Curacao public notary and is registered in the Register of Foundations at the Curacao Chamber of Commerce. The object of the Private Foundation may include a number of activities, and is …
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    28
    Oct 2011
    CATEGORY

    Corporate

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