E-zone Curaçao – 2%
Only 2% profit tax via the E-zones on Curaçao
For the E-zones on Curaçao, a corporate tax rate of only 2% applies. The E-zone legislation on Curaçao has been introduced to promote the Curaçao economy. This possibility of tax benefit is completely legal and offers (among other things Dutch) companies the opportunity to profit from considerable tax benefits on Curaçao. Moreover, the regulation is safe and is acknowledged internationally by the OECD and EU. For companies in the E-zone, therefo, a tax burden of only 2% applies till at least 2025.
With a profit of € 100.000.- you only pay € 2,000. – profit tax via the E-zone, in contrast to the Netherlands where you pay €20,000 corporate tax. With a profit greater than €200,000. —the tax benefits via Curaçao are even greater, because the corporate tax in the Netherlands rises to 25%.
In case you would like to take advantage of a benefit whereby you only pay 2% tax and would like to take advantage of the other pleasures offered by Curaçao? Continue reading how the E-zone legislation functions and whether incorporation/establishment in an E-zone is also interesting for you.
E-zone location on Curaçao
Approximately ten areas on Curaçao have been designated as an E-zone. The locations include the former “free zones” and some newly developed industrial and high-tech parks in and around the port and airport. Other locations have also received E-zone status. Companies located in an E-zone benefit from a considerable tax benefit: they are taxed at a rate of only 2%. This rate is guaranteed by the government until December 31, 2025.
It is important to note: flow of goods do not actually have to physically reach Curaçao to benefit from the possibilities of the E-zone.
E-zone tax exemption
E-zone companies are also exempt from various other taxes under certain conditions. More information about this can be found at tax profit
Import or export of goods or electronic services
You can benefit from 2% tax and the other E-zone facilities, because you contribute to the economic development of Curaçao, among other things by promoting the foreign exchange flow. The E-zones are intended for export-oriented companies (from a Curaçao perspective). As of July 1, 2018, this only applies to import and export of goods and no longer to the export of (electronic) services. For export of (electronic) services, a general exemption from profit tax applies. The buyers of goods and services under these facilities must be established outside of Curaçao. Goods can be shipped without actually physically being channeled via Curaçao.
Establishing in an E-zone is intended for companies with the following conditions:
- Trading companies.
Within the company international trade is carried out (from Curaçao perspective),
in an international context, products can be transported from the producer directly to the buyer, without actually calling at the Curaçao port
- Trading with customers outside of Curaçao
The focus of the business activities is on foreign trade with customers from outside Curaçao. E-zone companies may also deliver goods to Curaçao customers, provided that permission has been granted by the authorities and only up to a maximum. Curaçao sales are also taxed at 2%.
- Management on Curaçao or through a trust office
The management or actual management of the company must be established in Curaçao. The management can be conducted by natural persons in Curaçao or a trust office is called in for management activities.
- Who not? Excluded for establishing in the E-zones
Certain local services such as services provided by notaries, lawyers, accountants, tax advisers and related services are excluded for establishing in E-zones.
- How to apply?
Shareholders can be both local and foreign natural and legal persons. A request to apply the E-zone regime is made after registration with the Curaçao Chamber of Commerce. After this, a request is submitted to the Ministry for Economic Development for application of the E-zone regime on submission of various documents, including a customs declaration and a concise business plan.
Example business cases
Examples of companies and business activities in an E-zone are:
- Importing and / or exporting goods to and / or from, for example, EU or South America;
- IT companies that sell hardware to customers in, for example, the EU or USA;
- Web stores;
E-zone also for your company?
Is a tax advantage by establishing an E-zone also interesting for your company? We would like to advise you on all aspects of the E-zone, free of obligation, with full knowledge of the facts. SmitsvandenBroek has many years of experience in taxation and accountancy in Curaçao. Our advisers know all aspects of the E-zones and the Export Facility. Contact us without obligation.