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The description of corporate structures and prices quoted below is serving as a general guide and may be subject to the most recent changes of the legislation in various jurisdictions. We invite you to contact us for the latest update and free quotation.

COUNTRY: Netherlands Antilles

Netherlands Antilles Offshore Company

Legal form: In December 1999 the Netherlands Antilles adopted legislation under the heading of The New Fiscal Framework (NFF). This legislation was intended to avert inclusion on the OECD's threatened 'black-list' of errant offshore jurisdictions in 2000. The NFF involves the abolition of the distinction between offshore and onshore companies, at least for new formations, the introduction of a new company form named NABV (Nederlands Antilliaanse Besloten Vennootschap) which can be tax-exempt but which does not benefit from tax treaties, the introduction of a 10% withholding tax on dividends (not in fact being put into effect), and the reduction of the profits tax rate to 30% (plus 15% municipal surcharge).

Under the NFF, a 100% participation exemption has been introduced for profits derived from shareholdings in resident companies and qualifying Dutch-resident companies. The exemption is 95% for shareholdings in other non-resident companies, which results in an effective tax rate of 1.73%.

Other provisions under the NFF and the revised 'BRK' (tax treaty with the Netherlands) include:

a.) Dividends from a Dutch corporation to Netherlands Antilles corporate shareholders, who own at least 25% of the shares in the Dutch corporation, will be exempted from Dutch dividend withholding tax, provided that the dividend is subject to Netherlands Antilles tax at a rate of at least 8.3%.

b.) The Dutch corporation will have to withhold 8.3% dividend withholding tax from the gross dividend. The 8.3% which has been withheld upon the dividend distribution in the Netherlands can be credited against tax in the Netherlands Antilles.

c.) Dividends and capital gains derived from shareholdings in a Netherlands corporation will be exempted from additional profit tax in the Netherlands Antilles provided that the shareholding amounts to at least 25% and that 8.3% Netherlands Antilles tax is paid on the gross amount of dividends received.

d.) Dividends paid by Dutch corporations to Netherlands Antilles corporations unable to take advantage of the participation exemption will be subject to 15% Dutch dividend withholding tax. Existing Netherlands Antilles offshore corporations may elect for the new dividend treatment.

e.) The activities of an exempted company (NABV) will be restricted to investments in debt instruments, securities and deposits for Netherlands Antilles corporations incorporated before June 30, 1999, subject to profit tax and having a book year which ends before 1st January 2002, the grandfathering rules with respect to the offshore regime will remain applicable until 2019 as long as the company continues to have substantial business.

In December 2000 the OECD announced the Netherlands Antilles' commitment to eliminate harmful tax practices by 31 December 2005 which secured the jurisdiction's deletion from the OECD list of countries deemed to possess "harmful" tax practices.

Taxation of offshore operations in Netherlands Antilles:  The taxation of Netherlands Antilles companies is governed by the National Ordinance on Profit Tax 1940; special taxation regimes have been introduced for companies falling under articles 8A, 8B, 14 and 14A of the Ordinance, as follows (NB the special regimes normally apply only to non-treaty-related income - also note that these articles have been repealed under the New Fiscal Framework and will only continue to apply to existing companies under the grandfathering provisions of the NFF:

a.) Investment and Holding Companies - Income is taxed at 2.4% on the first NAf 100,000 of net income and 3% on the balance. Municipal surtax is not applied. Capital gains are not taxed; but capital losses are not deductible.

b.) Mutual Funds - These are exempt from profits tax if they have either minimum net assets of $50m, at least fifty shareholders, and four local employees, or if they have minimum net assets of $300m and two local employees; otherwise the fund will be taxed on its net assets, giving a minimum charge to tax of $1,000 rising to a maximum charge of $10,000.

c.) Trading companies - The normal applicable rates of tax are 24% on the first NAf 100,000 of net income and 30% thereafter; however it is usually possible to obtain a ruling from the Inspector of Taxes exempting 90% of income, which has the effect of reducing the rates to the usual offshore levels of 2.4% and 3%.

d.) Banks -  Investment and interest income (which qualifies under Article 14) is taxed on the usual offshore basis at 2.4% and 3%; commission and fee income will suffer 24% and 30% unless a tax ruling can be obtained (normally possible).

e.) Intellectual Property Holding companies - If a tax ruling can be obtained, the effective tax rate for income from royalties, licenses, patents, copyrights, trademarks etc will be 1%.

f.) Insurance companies - Foreign-owned captive and reinsurance companies not in receipt of treaty-related income benefit from a concession that deems their income to be NAf 100,000, giving them a fixed tax rate of NAf 2,400 annually.

g.) Real Estate Holding companies - These companies are not taxed on income derived from real estate (or subsidiaries wholly or predominantly engaged in owning real estate) outside the Netherlands Antilles.

h.) Ocean Shipping and Aviation companies - These companies are taxed at 7.73% on the first NAf 100,000 of net income, and 9.66% thereafter (including the 15% municipal surcharge). They have the option of paying tax at the rate of NAf 0.40 per gross registered tonne (minimum tax NAf 1,000 per vessel).

i.) Internet companies - As of April 1, 2001, special tax legislation for international Internet companies on Curacao came into force to act as an incentive to persuade e-commerce companies to relocate their activities to the island. The new law replaces the old Free Zone law and governs 'E-Zones', which are areas within the Netherlands Antilles where international trade and supporting services may be carried out by electronic communication and electronic commerce. In terms of profit tax, the profit of companies within the e-zones will be taxed at 2% - including surtax - until January 1, 2026. This rate is not applicable on the profit of an e-zone company if it is generated by the sale of goods or services to companies located in the Netherlands Antilles or generated through the rendering of services to affiliated companies located in the country. In addition there is no import duty or turnover tax charged on goods entering the e-zones.

In order to select most suitable legal structure and to proceed with the formation of the Netherlands Antilles Offshore Company please visit our  how do I start  page and then proceed to  filling in our application form