An e-zone (the name stands for economical) is a piece of a site or building that is indicated to the E-zone in which the handling of goods can take place and from which services can be accomplished. Favourable tax concessions are applied within this zone.
There are 2 kinds of E-zones: ‘Goods E-zones’ and ‘Service E-zones’. Companies that are established in the ‘Goods E-zone’ are mainly internationally oriented enterprises that use the Netherlands Antilles as a country of re-export. The goods undergo proceedings, after which they will be sent on to mainly (Latin) America. In the ‘Service E-zone’ we encounter mainly enterprises that offer services through the internet. It is of utmost importance that the services are aimed at foreign countries. At most 25 % of the sales may be generated by transactions with inhabitants of the Netherlands Antilles. Moreover the profit, realized with the 25% of the sales, is not applicable on the profit tax facilities of the E-zone legislation.
Tax Profits of the E-zone
On top of the non-fiscal advantages Curaçao is attractive for E-zone companies because of its tax facilities. Profits tax The profit of an enterprise that has acquired the E-zone status and is established in an E-zone will be charged against merely 2%. This is a very low rate in comparison with for example the Dutch enterprise tax rate of 30% and the normal Antillean profit tax rate of 30%. Besides this the 2%-rate is guaranteed till the year 2026.
Import duties and turnover tax
Dispensation of import and excise duties is applied to the import of goods. Furthermore a dispensation for turnover tax is also applied. This is an important facility for enterprises that import goods and for example store them in an E-zone and again re-directs them. This is also applicable for enterprises related to the internet that import very expensive computers or computer related appliances. Deliveries of goods and services of an E-zone enterprise to foreign enterprises are also exempt from turnover tax.
The E-zone enterprise can also be entitled to specific income tax facilities for its employees. If certain conditions are met one can make use of the so called expatriate arrangement. This is an arrangement to which an enormous amount of income tax can be saved.
Establishment in the E-zone
Only legal persons with a capital in shares can be established in an E-zone. A one-man business entrepreneur will not be able to establish in an E-zone. Service providing entrepreneurs engaged in trust activities (e.g. those practicing management for enterprises established in the Netherlands Antilles), and granting service of solicitors, lawyers, public accountants, fiscal accountants and related service provision will not be authorized in the E-zone. Furthermore the legal person is allowed to execute his company exclusively in the E-zone. Contributing to the development of the Netherlands Antilles is a legal requirement. This can be done in different ways. On the one hand by contributing to the expansion of the Netherlands Antilles as an international distribution centre of goods or international centre for provision of services. On the other hand by stimulating the inflow of foreign currency or by (in) directly promoting employment. An enterprise wishing to establish itself in an E-zone should file a petition with the government. This petition should be accompanied by various enclosures. A business case should be enclosed mentioning what the enterprise expects to do and what turnover expectations there are for the coming two years. For a smooth dispatch of the procedure one can be assisted by a consultant.
Solar Asset Management does not provide legal or fiscal advice. The text mentioned above is solely meant for information. The information is from a reliable source, although Solar Asset Management does not guarantee its correctness and completeness.