Is it also interesting for me to be located in the e-zone Curaçao or with Export Scheme? The e-zone (economic zone) is a government-designated area or building in Curaçao. Only export-oriented companies can settle in the economic zone. These companies can provide services, sell products, import or export them. The customers of these companies must in principle be located outside of Curacao. Establishment in the e-zone can be a very interesting investment due to the low production and operating costs, including a very low rate of income tax (corporate tax) of only 2%. In the beginning of 2014 a new tax regime was introduced: the Export Scheme. Under this arrangement, the companies do not have to be located in an e-zone, but can settle in any desired location in Curaçao. This arrangement has largely been introduced as an alternative to current offshore companies, for which the transitional arrangement applies until 2019. However, the arrangement is accessible to all trading activities that could also be established in the e-zone. The rate of income tax (corporation tax) is only 4%.
Too good to be true? No. This tax facility has been established and approved by the Netherlands and internationally for the promotion of employment, foreign exchange and the financial sector of this attractive island. How it is, read below.
Index:
What is the e-zone and the export regime in Curaçao
What does an e-zone or export scheme provide for me?
How can I settle my business in the e-zone or export scheme?
How do I know exactly what this means to me?
- What is the e-zone and the export regime in Curaçao?
The e-zone (economic zone) is based on the internationally recognized and recognized concept of the free zone. It is a tax facility of the Curaçao government to be internationally interesting for entrepreneurs and investors. Thereby stimulating local employment, the financial sector and foreign exchange, and developing the economy of Curacao in general. Since early 2014, the Export Scheme has also been introduced. Under this arrangement, establishment in an eZone building and use of facilities there is not necessary. The location of the company can be done at any location in Curaçao. Establishment in the e-zone or with the Export Scheme is not tax evasion and it is also not a "shady" or "illegal" construction. This facility is recognized in the Netherlands and internationally. Read the whitepaper "E-zone Curaçao and Export Scheme offers very attractive investment opportunity through exceptionally low production and operating costs!" For more information on the e-zone.
2 What does an e-zone or export scheme provide for me?
Suppose you provide ICT services to customers in the Netherlands mainly via the internet, and you earn an annual profit of EUR 100,000. In the Netherlands you would then have to pay 20% corporation tax, amounting to EUR 20,000. In the e-zone you pay only 2% profit tax, amounting to EUR 2,000. The profits paid to the Netherlands are covered by the participation exemption, which means that there is no double taxation. (With the Export Scheme there is a 4% income tax.)
Thus, with a profit of EUR 100,000, you save EUR 18,000 a year. Let's say you get an annual profit of EUR 200,000. In the Netherlands you would then have to pay 25% corporation tax, amounting to EUR 50,000. In the e-zone you pay only 2% income tax, amounting to EUR 4,000. The profits paid to the Netherlands are covered by the participation exemption, which means that there is no double taxation. (With the Export Scheme there is a 4% income tax.)
With a profit of EUR 200,000, you save EUR 46,000 a year. It is also possible to continue to carry out some of the trading activities in the Netherlands and part of the work in the e-zone. The profit attributable to the work in the e-zone is taxed at 2%. (With the Export Scheme there is a 4% income tax.) For example: Consultancy work will continue to be done in the Netherlands to Dutch customers. The profit is EUR 50,000. Online services, marketing and sales activities, helpdesk work, call center activities take place in the e-zone. The profit is EUR 100,000. The total profit is then EUR 150,000. Should all work be done in the Netherlands, 20% corporation tax should be paid over EUR 150,000, ie EUR 30,000. In the mix example, EUR 50,000 must be 20% tax, namely EUR 10,000 and EUR 100,000 2%, ie EUR 2,000, Therefore totaling EUR 12,000 instead of EUR 30,000. Yet a saving of EUR 18,000 per year. The profits paid to the Netherlands are covered by the participation exemption, which means that there is no double taxation.
The costs associated with an e-zone branch are one-time and relatively low considering the expected cost savings, an average of EUR 6,000 for one company and EUR 10,000 for two companies including notarial and fiscal structure advice (or EUR 4,000 per company without fiscal structure advice) . If you use a Local Government Trust Management, you can count on an average of 5,000 - 10,000 per year in an online business. The costs of establishment and ICT infrastructure and the like are generally considerably lower than in the Netherlands. Other operating costs are also lower in Curaçao. Personnel costs are generally substantially lower and Curacao is a USD economy, which is generally favorable in relation to the euro.
3 How do I settle my business in the e-zone or export scheme?
The Trust office can assist you with this. This is because of the detailed knowledge of Dutch and Curacao corporate and enterprise law, ICT law and e-commerce. And because of an excellent network of expert fiscalists, notaries and trust offices, with which we personally have excellent business experience due to years of practice in Curacao. With an e-zone company or company with Export Scheme, you can use various local and international corporate structures, such as some simple "standard" structures. Regularly a Stichting Particulier Fonds (SPF), an Exempt Company (VBV or NABV) or Trust is used as a shareholder of an e-zone company. Of course, considerably more complex structures are also possible.
Of course, you can also live on Curaçao yourself for which an immigration application must be submitted in due time.
How is a founding process going?
A. We will check with you whether your company or business plans are suitable for establishment in the e-zone or with the Export Scheme and whether the expected profit level is sufficient for this.
B. If you do not have an own tax consultant with expertise in the area of the e-zone, the Trust office refers to a tax consultancy tax consultant. We will continue to coordinate this.
C. Based on the tax advice you have accepted, we know which legal entities should be established, which statutes, and what other legal acts or documents are required.
D. Then we start the compliance process, collecting all the necessary documents and information and handing it to the Curaçao Notary Notary (and, if required, the Trust Management).
E. If a trust management is desired, we will propose a suitable trust office and contact you. We will continue to coordinate this.
F. Finally, the creation of the notary may take place in accordance with the preceding paragraphs and, if applicable, other legal documents are provided. We will continue to coordinate this.
4 How do I know exactly what this means to me? Call or email to discuss freely whether the e-zone in Curacao or the Export Scheme is an attractive option for you.
Will the e-zone construction work for ICT/consulting services provided to USA based customers?
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