status of the International Banking Industry

Transcription

1 Newsletter Q2, 2014 Volume 4, Issue 2 Exchange of information signed Between Argentina and Curacao Seychelles and Curaçao sign DTA offering opportunities to both countries status of the International Banking Industry Report on the current status by IBA legislation Curaçao online Dutch Caribbean Legal Portal aims to fill void

2 In this issue LATEST DEVELOPMENTS) Curaçao/Dutch Kingdom TIEA between Argentina and Curaçao signed IBA Report on current status of the International Banking Industry Agreement-on-substance FATCA Model 1A IGA Seychelles and Curaçao sign DTA Legislation of Curaçao online CTEX officially certified as a Tier-IV Constructed Facility Holland House Colombia from the members Accidental Gringo The power of asking why? Fuze Payment Gateway CIFA UPDATE Annual General Members Meeting Introduction new CIFA Chairman Anuschka Cova Introduction new CIFA Board member Luis G. Santine Jr. New Member IBA New Member SAI-Bank Product Development Seminar DCSX, CIfc & STEP UPDATE Government of Curacao s Interest in Listing on DCSX International Promotional Tour Changing Seats: a Re-Domiciliation to Curaçao Personal Data Protection in Curaçao OFFICE FORMATION CHANGES New Marketing & Business Development Manager at IBIS Management Associates AIC Office Location Change UPCOMING EVENTS BFD Trainingcourse

3 CIFA Latest Developments Curaçao/Dutch Kingdom Exchange of information agreement between Argentina and Curaçao signed On May 14, 2014 the Kingdom of the Netherlands in respect of Curaçao signed signed an exchange of information agreement relating to tax matters with Argentina. The document was signed by the Federal Administrator of Public Revenue of Argentina, Ricardo Echegaray, and the Ambassador of the Kingdom of the Netherlands, Hein de Vries. Tax Information Exchange Agreement with Argentina In may of 2014, the Netherlands, on behalf of Curaçao, and Argentina have signed a Tax Information Exchange Agreement (TIEA) between Curaçao and Argentina. The TIEA will enter into force as soon as the required formalities have been fulfilled. As a result of the signing of this TIEA Curaçao may be considered as an eligible jurisdiction with new business opportunities for Argentine companies and individuals. As a TIEA improves the transparency of ownership and accounting information as well as establishes an effective exchange of information on civil and criminal tax matters, the agreement can effectively protect against harmful tax practices. Curaçao will therefore cease to be regarded as a blacklisted jurisdiction. Thus the following antiabuse regulations with disadvantageous tax consequences, are no longer applicable. Argentine taxpayers trading with or holding entities located in blacklisted countries have to bear additional tax burdens and / or face several provisions that could make their corporate structure inefficient from a tax perspective: Argentina CFC rules provide that certain types of income realised by entities located in blacklisted jurisdictions are taxed despite the effective repatriation of profits expenses incurred with entities located in blacklisted jurisdictions are recognised on a cash basis; transactions with persons located in blacklisted jurisdictions are deemed as done between related parties for transfer pricing purposes; any proceeds (i.e.: contributions, payments or loan disbursements) transferred from a blacklisted jurisdiction could constitute unreported income for the Argentine recipient, unless evidence related to the origin of the funds are submitted; interest paid to blacklisted jurisdictions could have a higher withholding tax at source. The new status of Curaçao under Argentine legislation (i.e.: white listed jurisdiction) implies that Curaçao s entities and regimes could now be efficiently used for inbound and outbound transactions: For outbound structures: Curacao entities could now be efficient for holding investments in other jurisdictions (no CFC will apply and therefore it could be possible to differ taxation until repatriation); Curaçao entities could now be efficient for trading activities of goods originated in Argentina; there will be no financial down sides, and expenses incurred with entities located in Curaçao could be deducted on an accrued basis. For inbound transactions: Procurement entities could be now placed in Curaçao; financing from Curaçao will not face a higher withholding tax in Argentina; Argentine investments could now be held by a Curaçao entity, with no risk of considering contributions as unreported income for the recipient. 3

4 The execution of the bilateral TIEA with Argentina and the OECD Multilateral Agreement, place Curacao between the new list of jurisdictions that are considered as "cooperative for international tax purposes under Argentine legislation (i.e.: compliant with transparency standards). The shortcomings related to the using of blacklisted jurisdictions are no longer applicable to Curacao and thus considerable restrictions to the use of Curaçao entities by Argentine companies and individuals have been lifted. The concluding of this TIEA contributes to the establishment of Curaçao as an internationally stable and eligible jurisdiction that can appeal to a larger portion of foreign and, more specific, Argentine investors. Written by Daniel Dominguez, an Argentine international tax lawyer of the Latin American Desk of PwC Dutch Caribbean. For more information contact Daniel at daniel.dominguez@ an.pwc.com IBA Report on current status of the International Banking Industry On May 19th 2014 the Curaçao Minister of Finance, Jose Jardim received a report on the current status of the International Banking Industry from the chairman of the Association of International Bankers (IBA), Arthur Adams. This report describes the current status of the Banking Industry on Curacao and offers alternatives/ solutions through which a friendlier environment for the International Banking Sector can be created. This is needed in order to halt the recent decline in the number of International Banks on Curacao. IBA sees potential for renewed growth and has full trust in the sector. Agreement-on-substance FATCA Model 1A IGA Curacao and the US reached an agreement on the substance of a Model 1A Intergovernmental Agreement (IGA). The agreed texts follow the template of the Model 1A IGA and the associated Annex I and Annex II, and includes special rules that allow for instance certain private foundations to opt for non-reporting status. As a result of this agreement, Curacao will be treated as having an IGA in effect. This means that Curacao financial institutions ("FFIs") will not have to register as a "Participating FFI" through the IRS website before May 5th in order to prevent possible US withholding tax, as would be the case if no IGA would apply. Curacao FFIs now have until the end of 2014 to register. Furthermore, FFIs will have to follow the IGA rules with regard to due diligence, FATCA registration and reporting instead of the rules set forward by the IRS. CIFA would like to thank the Minister of Finance, the members of the FATCA commission and all others that have contributed to make this agreement-on-substance possible. It is a very important step for the sector and Curacao in general. The next step is the actual signing of the Model 1A IGA and the associated Annex I and Annex II by Curacao and the US, once the IGA is signed the texts of the IGA and the associated Annex I and Annex II become public. Seychelles and Curaçao sign DTA The Minister of Finance, Jose Jardim, signed a Double Taxation Agreement (DTA) with the Republic of Seychelles during an official trip to New York in April. In the recent past, Curaçao has tried to engage in DTA negotiations with multiple African countries, among others Angola. To date these initiatives have not resulted in DTAs with these countries. According to Minister Jardim this reciprocal arrangement with the Republic of Seychelles offers opportunities to both countries. Due to the fact that the Republic of Seychelles is strategically 4

5 located of the coast of the African continent, the archipelago can provide Curaçao access to Africa. The other way around the Republic of Seychelles considers Curaçao an excellent gateway to Latin America. Minister Jardim indicates that Curaçao will continue to work on expanding its treaty network by concluding more DTAs and Tax Information Exchange Agreements (TIEAs). Legislation of Curaçao online Dutch Caribbean Legal Portal (DCLP) has recently started the long-awaited project: "legislation Curaçao online". DCLP has already published some laws and ordinances, but not all legislation of Curaçao is online yet. Several other websites also provide legislation of Curaçao, amongst other: www. wetten.nl, and www. gobiernu.cw, but none of these websites contain complete information. DCLP aims to fill this void. The online legal document database will contain digital texts of the laws of Curaçao and references to websites with laws of the other islands of the Dutch Caribbean. As of today the Civil Codes and the Civil Procedure Code of Curaçao have been uploaded. In the second half of this year DCLP hopes to have uploaded all the legislation in the online legal document database. DCLP is working on this project together with CIFA, Van Eps Kunneman VanDoorne and StvB Lawyers. CTEX officially certified as a Tier-IV Constructed Facility CTEX is officially certified by the Uptime Institute as a Tier-IV Constructed Facility and becomes the first multitenant datacenter in Latin America and the Caribbean to achieve this level of excellence. Curacao Technology Exchange (CTEX) is now officially certified by the Uptime Institute as Tier- IV Constructed Facility. In doing so, CTEX s CU- 1 datacenter becomes the 14th datacenter in the world and the first multitenant datacenter in Latin America and the Caribbean to achieve both Design and Constructed Facility certification. The island of Curaçao joins a select group of countries in the world such as Spain, Brazil, the U.S., Luxembourg, Saudi Arabia, South Africa and Canada to have such high-end facilities. CTEX is a privately held company formed by industry veterans and funded by regional and Canadian banks, pension Funds, development banks, institutional and private investors. In June 2013, CTEX achieved Tier-IV Design certification by the Uptime Institute and was subsequently certified as an ISO 9001:2008 company. The Constructed Facility certification ascertains that the facility and all datacenter infrastructure components were built according to original Tier- IV design and engineering specifications. The Uptime Institute developed a four-tiered classification system that is recognized worldwide as the benchmarking standard for datacenter facilities. The institute s system has been in use since 1995 and presently provides Tier certifications in more than 41 countries. The Tier IV certification is the highest and most stringent certification to meet, making it the most reliable and safe option for companies requiring the highest levels critical systems and infrastructure availability. Tier IV datacenters have no single points of failure. The CTEX datacenter has fourteen days of fuel storage on-site 2N+1 redundant power and cooling systems, which are continuously available 24/7/365. In short, local and international customers are provided with the highest level of assurances that their critical business systems will never go down. CTEX s CU-1 datacenter is the first of four facilities the company intends to build. The facility is the most automated facility of its kind in the region today. Each redundant component is designed to automatically respond to failures preventing any interruption or damage to critical customer computing infrastructure. A central automated system automatically manages the entire facility s nervous system including security, access, power management, cooling and other areas. Curacao is the perfect location to build such high- 5

6 end facility. The island is securely located outside the hurricane belt and major seismic active fault lines. Being part of the Dutch Kingdom, the island has strict privacy laws based on European conventions. Too, connectivity is provided through 5 existing cable systems that land on the south side of Curacao, while various new fiber systems arriving on the north side of the island land in the CTEX datacenter directly, thus ensuring secured global connectivity. Over 40 major ethnic groups create a unique kaleidoscope of people, culture and language providing an added value for companies who leverage Curacao and the CTEX datacenter as a regional business and technology hub, says Anthony de Lima, CTEX s Chairman & CEO. He continuous, we are proud to join a select league of datacenters across the world to achieve this level of excellence. This achievement could not be accomplished without the dedication of hundreds of local and international engineers and workers. This facility is a testament to their professionalism and commitment to excellence. For regional customers it means access to a world-class in-region datacenter located in a safe jurisdiction. Safety & Security Agro Logistics Energy & Biobased Economy Construction & Infrastructure Life Sciences ICT Retail The Curacao Chamber of Commerce & Industry also had the opportunity to meet with the representative of the Mayor of Barranquilla, interested in joint efforts and business opportunities between Curacao and Barranquilla. Holland House Colombia is planning on having another mission in the 4th quarter of If you have initial interest in the Colombian market or in their future activities, don t hesitate to contact the Curacao Chamber. On March 8, CTEX officially entered into production hosting 24 customers which the company is servicing through its advanced unified Cloud platform. Holland House Colombia The Curacao Chamber of Commerce & Industry, as Platinum member of the Holland House Colombia, participated in the Colombia mission organized by the aforementioned in the first week of April This mission was held in the cities Bogota and Medellin focused on the following sectors: Accidental Gringo It is a well-known occurrence that when the future seems somewhat uncertain in the home country that many look to the North, that is, the United States, as a haven of financial security. Some make travel arrangements to time the delivery date so that children are born on U.S. soil to secure for them ease of future entry into the U.S.A. and for gaining citizenship. Others keep U.S. dollar bank and investment accounts to protect against eventual devaluation of our home currency. The financially more successful amongst us may move to the US to gain resident alien status ( green card status) or secure an investor s visa to protect against economic and political risk. However, many of those who sought or are seeking refuge in the U.S.A. are not fully aware 6

7 of the actual costs of it! In the following we would like to shed some light on the potential implications of three important pieces of U.S. legislation, namely FBAR (Foreign Bank Account Reporting Act), HIRE (Hiring Incentives to Restore Employment Act) and FATCA (Foreign Account Tax Compliance Act), that have serious implications for these strategies. In simple terms, these three pieces of legislation could be summarized as follows: The FBAR prescribes that all U.S. persons should report their foreign bank accounts by June 30 of each year. The HIRE broadens the scope of reportable assets by including direct and indirect financial benefits received (for example, marketdetermined rental charge for usage of real estate) The FATCA imposes a reporting obligation on all foreign banks and other financial institutions to report all accounts held by U.S. persons (effective as of the 1st of July 2014). Originally the qualification of an individual to be considered a U.S. person under FBAR was quite narrow and included only those who had a lawful admission for permanent alien residence (green card holders) and those who spent more than 183 days in a year in the US. However, in October of 2008 the IRS revised the FBAR instructions and further expanded the definition of a "U.S.person" by also including persons "in and doing business in the United States. The IRS Notice , issued in connection with the launch of FATCA, lists six indications of a U.S. person status: address that is the sole address with respect to the client; or 6. A power of attorney or signatory authority granted to a person with a U.S. address. Under U.S. Internal Revenue Service code, all U.S. persons must pay tax on their worldwide income and gains, regardless of their residency. The trickiness of the issue of the IRS reclassifying a non-resident alien as a U.S. person is the fact that this reclassification is done as a rebuttable presumption, which means that the reclassification will stand until proven otherwise. Therefore, this reclassification will stand as fact until the non-resident alien can prove to the IRS beyond reasonable doubt that the reclassification was based in incorrect facts and circumstances. The fact that a foreign bank would face a penalty of 30% withholding tax and/or run the risk of losing its U.S. dollar correspondent banking relationship creates a situation where almost all foreign banks have or will enter into an agreement with the IRS and report under FATCA. It still remains to be seen how sovereign states will react when the U.S. starts eroding their tax base by claiming the right to tax many of the country s top income earners who have Americanized their financial security. The bottom line is that what looked like a golden opportunity in the past has now lost its sheen. This recent extension of the already long arm of the U.S. Taxman brings a growing awareness that belonging to the group of accidental gringos who seek economic and/or financial refuge in the U.S. has become an economic threat and, in the end, could bring more trouble than good. 1. US citizenship or lawful permanent alien resident (green card) status; 2. A US birthplace; 3. A U.S. residence address or a U.S. correspondence address (including a U.S. P.O. box); or 4. Standing instructions to transfer funds to an account maintained in the United States or directions regularly received from a U.S. address; or 5. An in care of address or a hold mail The power of asking Why? When the stock market crashed in October 1929, so did public confidence in the U.S. markets. United States Congress held hearings to identify the problems and search for solutions. Based on its findings, Congress in the peak year of the Depression passed the Securities Act of The following year, it passed the Securities Exchange Act of 7

8 1934, which created the SEC. (Source: gov) The 1933 Act was the first major federal legislation to regulate the offer and sale of securities During the years it (and its addendums and revisions) has served its role of ensuring that buyers of securities receive complete and accurate information before they invest. The SEC states its mission as to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital information. mobile devices in a secure and safe manner. A successful road show of promoting Fuze s functionalities in Europe will lead to a significant shift in the way trust companies operate on a global scale. IBIS Management Associates solutions enable you to operate on a high level of excellence, as we dedicate our expertise to enhancing the true value of your services to your clients worldwide. The investing world is fascinating and complex. It can be very fruitful, but unlike the banking world, where deposits sometimes can be guaranteed by the government, stocks, bonds and other securities can lose value. There are no guarantees. That s why investing is not a spectator sport. By far the best way for investors to protect the money they put into the securities markets is To read the full article, please click here. Fuze Payment Gateway Improving Global Trust company operations A new way of working for global trust companies has emerged as high standards for compliance and payment processing need to be met. IBIS Management Associates has developed a straight through processing (STP) solution for global trust companies, which meets these high standards and increases their efficiency and profitability. This trust payment solution is known as the Fuze Payment Gateway. Fuze provides global trust companies with a secure, efficient, compliant and centralized way of making transfers and payments. By meeting the global compliance requirements with Fuze, global trust companies can make vast improvements in the services they provide to their clients. Take advantage of modern mobile technology with Fuze, and enable access to accounts with several 8

9 CIFA Update CIFA Update 2nd Quarter 2014 The activities of CIFA in the second quarter of 2014 were dominated by a roadshow among the important stakeholders on the island. The goal of the roadshow was twofold. Firstly, the roadshow was used to introduce our new Chairman, Anuschka Cova, and secondly to inform stakeholders about the priorities of the international financial sector as well as the quick wins that CIFA had identified. During the roadshow CIFA has met with, amongst others, the Prime Minister, Minister of Finance, Minister of Economic Development, Council of Ministers, the Permanent Committee Economic Development of the Parliament of Curacao, Central Bank of Curacao and St. Maarten and Directorate of Foreign Affairs. The meetings with the stakeholders have been very fruitful. The reaction that CIFA received is that the stakeholders are very willing to facilitate the development of the sector and are willing to work closely together with the sector. The meetings have also resulted in CIFA being able to push the Harmonization Legislation and the Supervision of Securities Market Intermediaries Legislation. The stakeholders are aware of the urgency to get the above legislations approved. In order to facilitate this process CIFA has reviewed the legislation upon the request of the Central Bank. Together with the DCSX, CIFA has stressed the importance of the DCSX as part of our (international) financial services sector. The unique possibilities, advantages and good public exposure if the Government uses the DSCX platform more and more for financing and/ or refinancing of several Government related financial needs has been brought forward, resulting in the official listing of Curacao Government Bonds on the DCSX exchange in May. Additionally, CIFA has been invited to meet with representatives of the Canadian Embassy in Venezuela, representatives of ECLAC in relation to the Curacao Development Finance Institute (CDFI) and the Director Consular Affairs and Migration Policy of the Ministry of Foreign Affairs of the Netherlands about visitors permits in connection to Colombia and Peru in the last two months. During these meetings CIFA has given its input in the different issues that were discussed. CIFA wants to thank all the stakeholders for their time end effort. Annual General Members Meeting On March 17, 2014, CIFA held its Annual General Members Meeting. During this meeting the organization looked back on the accomplishments in The year 2013 has been a year in which a lot of developments took place for the International Financial Service Sector. Curaçao has entered into a TIEA with Colombia and a DTA with Malta was signed. Moreover, after years of negotiations Curaçao agreed on a new Tax Arrangement with the Netherlands, which is expected to enter into force on the 1st of January 2015 and will replace the current BRK agreement from With regard to Product Development, the Export Facility was introduced as well as the Captive Insurance legislation. In 2013 the Minister of Finance also installed a Committee Product Development International Financial Sector. The task of the Committee Product Development International Financial Sector is to provide the Minister of Finance with recommendations for legislation that needs updating and new legislation to further modernize our sector. The Curaçao International Financial Center Foundation (CIFC), in which CIFA is an active stakeholder, also took an important step forward. The Foundation initiated the promotion of the jurisdiction in Colombia and Canada. In 2013, CIFA has continued its support of the local STEP (Society of Trust and Estate Practitioners) Chapter of Curaçao. STEP Curaçao has organized a large number of luncheons to inform local professionals on a variety of topics. 9

10 This year STEP Curaçao, CIFC and CIFA started the initiative to organize an International STEP Curaçao Conference in Curaçao. STEP has contracted an international event organizer to organize this conference which is scheduled to take place before the end of Apart from looking back, the members also elected the CIFA Board for fiscal year In 2014 the board will consist of: Anuschka Cova (Chairman) (New), Sabine Altena, Raoul Behr (New), Stephen Capella, Bas Horsten, Zuleika Lasten, Wendell Meriaan, Luis Santine (New) and Derk Scheltema. Introduction new CIFA Chairman Anuschka Cova Anuschka was born and raised in Curacao. After 16 years of working on an International level and living abroad, she returned to Curacao in Anuschka holds a Bachelor degree in Business Administration (International Finance and Marketing) from the University of Miami and holds certificates in various specialized financial courses for executives, such as Finance for Senior Executives (FSE) from Harvard University. In addition, she has participated and volunteered in countless industry initiatives, Alternative Industry summits, forums and conferences for the last 18 years. She has been a member of 100 Woman in Hedge Funds for over 10 year, and contributes to numerous charitable organizations. Anuschka Cova is an accomplished hedge fund industry veteran with a solid track record, where she has had a successful career spanning twenty years in increasingly senior positions in the industry, both in Europe, and the Americas. Anuschka s strengths include a strong commercial, social and cross-cultural skills combined with detailed knowledge of the operational, product, technical, sales and marketing aspects of hedge funds. Anuschka s tenure at Citco Fund Services, from 1993 to 2012, her roles included appointments as Operations Manager and Managing Director, for Citco in several locations, while she also became Global Head of FoHF marketing. Anuschka s role encompassed managing staff and operations in Curacao, Amsterdam, Cork, Toronto, New York and Miami. In addition, to managing operations and marketing, Anuschka s macro responsibilities included providing leadership on client relationship management, developing hedge fund best practices, and establishing groundbreaking hedge fund pricing services. In 2013, Anuschka became one of the Managing Partners at VBK+CO Alternative Investor Services. VBK+CO offer end to end bespoke solutions to Alternative Investors. VBK+CO consists of Partners that have worked in the Financial Services Industry over 20 years each, and understand the complexities of the ever changing international landscape. They work with clients from beginning to end with strategic partners to offer tailored solutions. As Chairman of the Board of CIFA, Anuschka will share her broad international management and business development experience; she will focus amongst others on the repositioning of the sector internationally and locally and on branding Curacao as a jurisdiction of choice in general. Considering that Curacao was once the leading offshore jurisdiction, Anuschka believes that the sector and Curacao are in the right place and time, (geographically and structurally), to position Curacao back where it belongs: in the top spot as a leading International Financial Center. At CIFA, she will not only focus on innovation but also on regulation, mind over form, on maintaining competitive advantage and on branding. Our investors will feel at home and at ease in such a professional environment. She looks forward to continuing working closely with the Government and all stakeholders in order to present innovative and sophisticated products in the right jurisdiction: CURACAO!! Anuschka started her career at Citco. During 10

11 Introduction new CIFA Boardmember Luis G. Santine Jr. Luis, born in Curacao in 1970, is the founder and managing director of InfoCapital N.V. As a financial professional, Luis is the managing director of South American International Bank (SAIB) and the former CEO of the Dutch Caribbean Securities Exchange (DCSX). He is a board member of Travelsure Insurance Company (TIC) and the chairman of the Supervisory Board of AMFO. Luis is a board member of the International Bankers Association of Curacao (IBA) and board member of the Curacao International Financial Services Association (CIFA). Prior to his current position, Luis held several positions with First Caribbean International Bank, Maduro & Curiel s Bank Private Client Services, MeesPierson and Rabobank International in New York, Amsterdam, Rotterdam, Utrecht and Curaçao. Luis holds a MBA degree in Entrepreneurship & Management and a B.S.B.A. degree in International Business in Finance from the American University in Washington, D.C. Luis is proficient in Dutch, English, Spanish, in addition to Papiamentu. Luis will focus primarily on the promotion and development of the international banking sector of Curacao. In addition he will use his network and experience to contribute to the positioning of the sector in Latin America as well as the further development of the DCSX. New Member IBA The Association of International Bankers IBA was founded on April 4, 1980 with the main purpose to look after the interests of the international banking sector. Members of IBA are banks and affiliate offices of banks conducting international banking business which are in possession of a valid banking license issued by the Central Bank of Curaçao and Sint Maarten. Having worked very closely with CIFA in the last couple of years, IBA decided it was time to apply for a full membership of CIFA. IBA is very honored by the fact that the CIFA members accepted its application. IBA is confident that its membership of CIFA will further strengthen the relationship with CIFA to the benefit and interest of the financial services sector on Curaçao. New Member SAI-Bank South American International Bank Curacao N.V. (SAI-Bank) is a privately owned commercial bank with international license located in Curacao, Dutch Caribbean. The bank adds substance to our slogan Your partner in banking by offering personalized and timely service focused on building lasting relationships with its clients. SAIB s commercial activities have been targeted towards the Latin American market through a strategy that is focused on collaboration with local and international Trust companies, professional service providers and commercial representatives in selective markets. The bank s services range from International Payment Services, to Investment, Treasury- and Credit Services. SAI-Bank has a BBB rating from Pacific Credit Rating and applies the highest KYC standards in the screening of its clients. Product Development Seminar The Curaçao International Financial Services Association (CIFA) organized a successful seminar entitled " Product Development: Creating New Opportunities" on Friday, January 31st The purpose of the seminar was to inform the private and public sector about possibilities on improving the competitiveness of Curaçao by improving existing products. The former chairman of CIFA, Mr. Etienne Ys, opened the seminar, after which the floor was given to Ms. Anuschka Cova (VBK + CO), Mr. Dinesh Mishre (Spigt DC), Mr. Peter Govers 11

12 (Dammers Ship Agencies) and Mr. Eric de Vries (HBN Law). The product categories that were discussed by the above speakers were: Investment Funds, Aircraft Registration, Ship Registration and Intellectual Property. Investment Funds In the 80's Curaçao was THE jurisdiction for the establishment of investment funds, and especially hedge funds. In recent decades, other jurisdictions took over the leading position of Curaçao. Anuschka Cova indicated that the global market for investment funds is a large market. By improving its competitive advantage, Curaçao can attract more funds. The competitive advantage of the jurisdiction can be improved by quickly responding to the demands of the market and by offering better service. This can, for example, be done by introducing new products focused on the European market or products geared towards smaller investment funds, like funds which can be incorporated fast. Another example is the digitalization of the registration procedures for Investment Funds. Aircraft Registration In the field of international aircraft registrations, Curaçao is lagging behind jurisdictions such as the Cayman Islands and Aruba. According to Dinesh Mishre, Curaçao has the building blocks to enter this market successfully. However, in order to achieve this, Curaçao will need to introduce legislation that make the international registration of aircraft possible. Furthermore, Curaçao will need to reclaim the FAA Category 1 Status and Curaçao will need to train their aircraft inspectors to be able to inspect a wider variety of aircraft types. Ship Registration In total 90,000 vessels are registered worldwide, 200 of these vessels are registered in Curaçao. In order to grow the number of ships in the Curaçao registry, Curaçao will need to offer ship owners fast and customized solutions. According to Peter Govers, this can be accomplished by increasing the capacity of the Maritime Authority Curaçao, allow private security organizations to protect their ships registered in Curaçao and to get Curaçao included on the white list of flag states. Intellectual Property Eric de Vries spoke about Intellectual Property. In Curaçao it is possible to register trademarks and patents through the Bureau of Intellectual Property. The fact that Curaçao is part of the Madrid Protocol makes it possible to initiate international registration procedures of trademarks in Curaçao and more and more international registration procedures are being initiated on the island. However, by enabling digital IP registrations, by setting up a centralized information desk with information on IP legislation and by implementing new legislation to attract for example artists and movie studios, Curaçao can further increase the number of registrations. Conclusion The general consensus of the speakers is that Curaçao has plenty of opportunities to improve its competitiveness and attract additional clients through product development. For both the private and the public sector it is important to consider that Curaçao is competing on an international level with regard to the above mentioned product categories. This means that Curaçao should monitor international developments continuously and should adjust its product offering in order to follow international developments. In addition, all the speakers agreed that Curaçao has to improve the promotion of the jurisdiction abroad. Product Development Advisory Committees Following the seminar "Product Development: Creating New Opportunities", which was held in January 2014, the Curaçao International Financial Services Association (CIFA) created special advisory committees for the following five product categories: Ship Registration, Aircraft Registration, Intellectual Property, Investment Funds and Segregated Cell Company. The above advisory committees were installed in March of this year and consist of experts from the private sector. All advisory committees have the task to draw up a advisory report containing concrete recommendations for the improvement of existing products and the development of new 12

13 products within the specific product categories. In the coming month, the advisory committees will also engage in conversations with relevant stakeholders. CIFA wants to align the interests of the various stakeholders, prior to offering the final advisory reports to the Commission Product Development International Financial Sector installed by the Minister of Finance the end of June. Additionally, CIFA is planning to organize a seminar to inform the public and private sector about the findings of the different advisory committees in August. 13

14 DCSX, CIFC & STEP Update Government interest is important step DCSX is very pleased and proud to announce that last May 15, 2014 it officially listed Curaçao Government Bonds on its exchange. The listing has a total value of ANG 1.7 billion and brings the total value of listed bonds and of entities that have shares listed on the DCSX to around ANG 5 billion. The listing of these Government Bonds is an important step in the further development and maturing process of our young exchange and shows the realization by the Government of its importance. A close and swift cooperation between representatives of the Listing Advisor Global Listing and Exchange Services ( GLEX ) and of the Ministry of Finance of the Government of Curacao enabled a quick process of the relevant listing. On April 2, 2014 representatives of the board of the Curaçao International Financial Services Association (CIFA) and of the Dutch Caribbean Securities Exchange N.V. (DCSX) had the honor and opportunity to meet with the Council of Ministers of the Government of Curaçao. During this meeting the importance of the international services sector for the Curacao economy at large and the need to continue to work closely with the Government to further develop the sector was discussed and reiterated. CIFA and DCSX also stressed the importance of the DCSX as part of our (international) financial services sector. But also the unique possibilities, advantages and good public exposure for the Government if it uses the DSCX's platform more and more for financing and/or refinancing of several Government related financial needs. The ensuing conversation and questions showed a genuine interest to continue to work together. Strong commitment from the private sector s part was reinforced by CIFA and the DCSX as well as from the Government s side. After the meeting with the Council of Ministers, CIFA also met with the Permanent Committee Economic Development of the Parliament of Curaçao. During this meeting CIFA informed the committee members among others about the importance of the DCSX for the international services sector and that the listing of Curaçao Government Bonds and Government owned companies (albeit partly) would raise the profile of the DCSX internationally. Pursuant to this explanatory first meetings, further meetings were held with both Ministers Dr. J. Jardim of the Ministry of Finance and Mr. S. Palm of the Ministry of Economic Development which resulted in the abovementioned listing. The DCSX looks forward to the next steps where the expectation is that some Government owned companies will (albeit partly) be listed on the Exchange. CIFA would like to thank all the parties involved and everyone who cooperated in making this happen as it is a very important milestone for the sector and Curaçao in general. DCSX presentation at the Curacao Investment Forum. At the Curacao Investment Forum held last May 12 at the Marriott Beach and Casino Resort, Mr. R. Römer got the opportunity to briefly introduce the DCSX and its importance for the Curacao Financial services industry as part of the economic activities in Curacao. DCSX Listing Advisor SSX mentioned in interesting article on the Dutch Consumenten Bond Blog. The Dutch Consumenten Bond blog on May 9 had an interesting article and/or discussion on the role of crowd funding platforms. The pros and cons of this modern way of financing startup ventures were discussed and SSX was mentioned as THE international platform that had jumped at the opportunity to be the next development in the crowd funding arena by taking it a step further and leading to the situation where a crowd funding investor would get not only some real equity but also the possibility of liquidity of his/her investment. The moment a promising crowdfunding prospect is identified and approved by SXX, SXX approaches DCSX with a request for an actual listing on the exchange. This request is the start of the review and approval process. The moment the listing request is approved the crowd funding prospect is listed at DCSX. 14

15 International promotional tour Curaçao International Financial Center ( CIFC ) The Curaçao International Financial Center ( CIFC ) is a " public private partnership " between the Government of Curacao and the private sector. The goal of CIFC this year is to promote the International Financial Sector of Curacao. As part of her promotional tour CIFC will attend and sponsor five international conferences to promote Curaçao as International Financial Center. The promotional tour of CIFC is part of the Action Plan 2014 which mainly focuses on the promotion of the jurisdiction Curaçao in the area of international financial services. The conferences on the agenda for this year are: 7th annual U.S. - Latin American Tax Planning Strategies, Miami June 4-6 STEP LATAM Conference, Mexico Sept. 4-5 Latin Markets Private Wealth Latin America & Caribbean, Miami Oct Private Banking LatAm Americas and Family Office Forum, Miami, Nov The conference in Bolivia was co-sponsored by: AIC, Amicorp, Ennia, EY, HBM Group, Intertrust, Chamber of Commerce, SGG Management ( Curacao ) NV, VBK Services ( Curaçao) N.V. and PwC. The conference in Miami was co-sponsered by HBM Group, AIC, Amicorp, SGG Management, Steevensz Beckers Tax Lawyers, BDO, Spigt Dutch Caribbean, EIB Bank and IBA. The board and management of CIFC hope to welcome more companies to join in the incoming events. STEP LUNCHEON: "Changing seats: a redomiciliation to Curaçao" A growing number of countries are issuing black lists in which they generally list countries which are considered a tax haven or which do not meet the international standards for transparency and the exchange of information of financial data. The impact of being on a blacklist is typically that transactions and ownership structures are seriously affected and do raise the cost of doing business. Curaçao may offer a practical alternative for such a black listed country by which the negative consequences can be avoided through a re-domicilation of the seat of the company in the blacklisted jurisdiction to Curaçao. Curaçao is not included in the blacklist of the OECD organization nor in the black lists of Venezuela, Colombia, France, Bolivia, Argentina, nor Mexico for example. A re-domiciliation, the transfer of the seat of incorporation, has the advantage that the entity will continue to exist, be it in a different legal form, for example from X Ltd. to X BV. The new entity will continue to be the owner of all the assets, contractual rights and obligations which prevents that the move to Curaçao results in adverse tax consequences in the former jurisdiction. Under Curaçao laws, the company remains the same legal entity, although with new articles of association and organized under the laws of Curaçao. The assets and obligations of the company are not passed on or transferred to any other (new) entity on the basis of the conversion and all its relationships, such as third party contractual rights and obligations (i.e. service or distribution agreements), will continue. Generally, there is no need for a de-registration of any registered asset owned by the entity, such as immovable property intangibles, or shares. Subsidiaries of the converted entity would not need to report a change of ownership in their local jurisdiction. A re-domiciliation into Curaçao allows the transferred entity to take advantage of the favorable tax regimes such as the participation exemption, a tax transparent company, the export facility regime and others. These advantages may be utilized without the necessity of a rigorous corporate restructuring, i.e. a general transfer of assets and liablities or a liquidation of the foreign company, therefore avoiding possible adverse legal or financial consequences in the source state. 15

16 However, it is important to check whether there are any related tax consequences for the shareholder of the entity to be re-domiciled, for its investments, and for the entity itself, both in the country of origin as well as in Curaçao. The same applies to the accounting and legal consequences of moving into a different jurisdiction. Curaçao allows a re-domiciliation in and out of Curaçao (entry and exit conversion) provided that the applicable foreign law is not inconsistent and it does not object to the conversion. The redomiciliation is subject to formalities that have to be complied with such as a legal opinion, a recent balance sheet and a certified copy of the ultimate beneficial owners. A re-domiciliation may keep an existing structure viable and in compliance with the international standards for transparency while saving time and costs. After the re-domiciliation has been completed, it will be possible to apply for the many available favorable tax regimes and incentives Curaçao has to offer. step luncheon: "Personal Data Protection in Curaçao" Without a doubt you have been informed on the Personal Data Protection Act (PDPA) (Landsverordening bescherming persoonsgegevens) that came into effect as per 1 October What are the consequences for your organization? The PDPA provides a set of rules for the processing of personal data and is primarily aimed at the responsible party. This is the party who determines the purposes and means of the processing of data and is responsible for the processing at all times. The term personal data is defined as information relating to an identifiable natural person. In your organization you will find personal data in files concerning clients, employees and marketing as well as in your items and in social media. It does not directly apply to legal entities. However, information on legal entities may also contain personal data. Processing is any action in connection with personal data, which may vary from collecting, documenting, filing, saving, revising, forwarding and linking to masking, deleting or destroying. Personal data may be processed only in accordance with the law, in a proper and careful manner, for specific, explicitly defined and legitimate purposes. When obtaining personal data, the responsible party must inform that person on its identity and the purposes for the processing of the data. Under certain circumstances consent from the concerned party is required for the processing. It is common use to outsource processing of personal data, e.g. for payroll services. The responsible party remains responsible for the processing during the outsourcing. The PDPA requires the implementation of security measures by the responsible party, which security measures must be applied by the processor as well. The responsible party and the processor should enter into an agreement on theuse of personal data,the security thereof and liabilities in connection therewith. Personal data may be transferred to a country outside the Kingdom of the Netherlands only if that country guarantees an adequate level of protection. A limited number of countries in the world offer such adequate level of protection. In this respect, the US Foreign Account Tax Compliance Act (FATCA) is a hot topic. FATCA is adopted to reduce and avoid tax evasion of US taxable persons living abroad. Foreign financial institutions, including but not limited to banks, insurance companies and investment funds, must sign an agreement with the US Tax Authorities (IRS) to the effect that information on their clients will be provided upon its request. Is this permitted under the PDPA? No, it is not. Nevertheless, in the event a financial institution refuses to sign the agreement, the IRS will charge 30% on withholdable payments of the concerned financial institution from the US. It is therefore expected that most financial institutions will comply with FATCA, with their back against the wall. In the meantime Curaçao should not delay in finding a solution with the IRS that serves all legitimate interests involved. Should you have questions or need advice on the implementation of the requirements under the PDPA and/or FATCA in your organization, contact your lawyer. Carine Jänsch en Miriam den Boogert (associated with) 16

17 CIFA Office Formation Changes New Marketing & Business Development Manager at IBIS Management Associates Rume Sobotie is a design engineer that specializes in the Branding and Marketing of new products and services. He obtained his Master s degree in Strategic Product Design, at the Delft University of Technology in the Netherlands, but was born in Nigeria. Rume has over 5 years of experience in creating innovative concepts as a design engineer, and developing brand concepts for several clients in Europe, South America and the Emirates. He has also conducted research at Volvo Aero in Sweden, and IBIS Management Associates is glad to have him as a member of our business development team. AIC Moved office Per April 2014, Diversied Financial Solutions Provider AIC has moved office and is now located at Pietermaai 123. New tax attorney ; Daniel Dominguez Daniel Dominguez is a tax attorney with more than eleven years of expertise in international taxation. He completed his tax specialization in Argentina and then moved to the United States where he got his LL.M. in international taxation. For more than five years he has worked as in house tax counsel of Techint Group, a conglomerate of steel, construction, and energy corporations with operations worldwide. He has advised various corporate entities within the group on the relevant tax implications of all projects and transactions within Latin America. He then joined an Argentine top tier law firm, and became head of the tax practice. Within the firm he has advised multinational corporations in international taxation, and has focused particularly on transfer pricing issues related to trading activities. Daniel has recently joined a team of 4 specialists who comprise the LA Desk PwC Curacao, to support the growing tax services actually requested by clients in Latin America. The choice of Pietermaai has been made mainly because of the spacious office location and central accessibility. Pietermaai 123, Willemstad, Curacao T: / F:

18 CIFA Upcoming Events BFD Training course The IBFD International Tax Academy will once again conduct a two day training course in Curaçao. The course will take place on 23 & 24 October The course is designed to provide participants who deal with international tax planning an in-depth understanding of some of the more complex issues raised by double tax treaties and transfer pricing strategies. This course contains an introductory online course on transfer pricing and an advanced-level two day workshop in Curaçao. The online component of this course provides an introduction to the transfer pricing principles and an overview of the issues involved. The on-site training course will guide participants through a series of complex case studies, with a particular focus on the treaties entered into by countries in the Caribbean with countries in Latin America, Europe, North America and Asia. The documentation requirements with regard to transfer pricing will be one of the topics discussed. The price will be USD 1,590 (including USD 90,- OB). The course will be held at Avila Beach Hotel. The logistics for this event is provided by PwC. For more information or registration please contact Arne Kattouw at or by arne. [email protected] or Mylene de Gouveia at or by mylene.j.de.gouveia@ an.pwc.com. 18

19 The CIFA newsletter is a publication of the Curaçao International Financial Services Association (CIFA). For more information about this publication please contact [email protected] International Financial Sector Curacao Curaçao is an established, secure, reliable and responsible international financial centre with more than 80 years of experience. The sound economic and financial fundamentals and the skilled, educated and multilingual workforce have attracted many reputable international companies. The geographic location and the available mix of European and Latin-American nationals and languages make Curaçao the ideal hub for channeling cross-border international financial services transactions with Latin America, both inbound and outbound. The Curaçao financial sector offers products tailored to the needs of high net worth individuals, families, closely held businesses, up to and including internationally listed companies. Curaçao International Financial Services Association CIFA (Curaçao International Financial Services Association) is the representative organization of the international financial services sector of Curaçao. CIFA acts as a sounding board for and advises the government, regulatory agencies and monetary authorities on issues concerning the international financial services sector. Furthermore, CIFA initiates and endorses the development of new concepts, products and services by actively lobbying for new state-of-the-art laws and regulation (fiscal, corporate and compliance). CIFA s vision is to make Curaçao the gateway of choice, both inbound and outbound, for cross border international financial services transaction with Latin America, the US, Europe and Asia. For more information about CIFA or how to become a member, please visit 19