Synopsis
The Netherlands Antilles is a group of five islands situated through the Leeward and Windward chains of the Caribbean. The largest island, Curacao, is less than fifty miles north of Venezuela and is home to ninety percent of the islands' population of approximately 200,000. The capital of Curacao is Willemstad which is in the main finance centre and seat of Government for the five islands.
The islands form part of the Kingdom of the Netherlands, so are an associate member of the European Union. However, they have full internal autonomy with a parliamentary democracy based on the Netherlands.
The islands' main sources of income are shipping, tourism and financial services, with excellent communications and air services in place to support this. The standards of living are amongst the highest in the Caribbean. The currency is the Netherlands Antilles guilder, fixed to the US dollar at the rate of US$1 : Nafl1.78. The official language is Dutch but English and Spanish are widely spoken in the business community.
THE NETHERLANDS ANTILLES N.V.
The Netherlands Antilles N.V. is a legal entity similar to the UK limited liability company or the US corporation. They are most commonly used to act as the holding company of the shares in a Netherlands B.V. thus forming the so called "Dutch Sandwich". Under this arrangement profits are generated in the accounts of the Netherlands B.V. and are then remitted by way of dividends to the Netherlands Antilles N.V. The profits are subject only to minimal withholding taxes in the Netherlands provided that the Netherlands Antilles N.V. owns at least 10% of the Netherlands B.V.
The government has introduced new tax legislation, known as the New Fiscal Regime (NFR), with effect from 1 January 2002. One of the most important features of the NFR is that it re-emphasizes that dividends collected in Dutch companies can still flow to the Netherlands Antilles. The new legislation has introduced an 5% dividend withholding tax, applied to dividends paid by a Dutch company to a Netherlands Antilles company, where the latter has the minimum participation level set out above.
Under certain conditions, dividends will be 100% exempt from Netherlands Antilles tax, resulting in a total Dutch dividend withholding tax and Netherlands Antilles profit tax burden of 5% of the gross dividends from the Dutch company to the Netherlands Antilles parent company.
The Dutch dividend withholding tax will be 0% (nil) if the corporate shareholder in the Netherlands Antilles that own at least 10% of the paid up capital capital are Banks, Insurance Company, Pension Funds or Companies listed on a stock-exchange.
The Netherlands Antilles are not considered as being part of the Netherlands for tax treaty purposes. Specific tax treaties may be extended to include the Netherlands Antilles in specific cases but this has not thus far happened. The Netherlands Antilles can negotiate its own tax treaties and formally had tax treaties with the United States, Denmark and the UK but all of these have now been terminated. The only tax treaty currently in existence is one between the Netherlands Antilles and Norway.
The Netherlands Antilles N.V. can be used for trading, shipping, consultancy and all other usual commercial purposes but profits are subject to tax at the rates described below so it is frequently preferable to incorporate such companies in one of the alternative zero tax jurisdictions.
A Netherlands Antilles N.V. has the follow characteristics:
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Last reviewed: Saturday, July 01, 2006
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