Friday, October 4, 2019

Real presence (substance) explained for E-zone status & Curaçao Investment Companies


 One of the requirements to obtain and keep the Curaçao Investment Company (hereinafter ‘CIC’) or E-Zone status is having real presence in Curaçao. Pursuant to the Profit Tax Ordinance, an entity has real presence if it:

  • employs a number of qualifying fulltime local employees (whether on payroll or not), that is suitable for the size and activities of the entity or the concern[1]; and
  • incurs an amount of annually recurring, local operational costs that is suitable for the size and activities of the entity or concern.

Upon the introduction of the term ‘real presence’, there was uncertainty about how the above criteria should be explained and applied. Recently, he Minister of Finance enacted a Ministerial Decree (hereinafter "MD") in which the above criteria are explained.


Ministerial Decree

 Pursuant to the MD, an entity has a real presence if it meets all of the following conditions:

  1. at least half of the statutory and decision making (managing) directors are resident in Curaçao;
  2. all management decisions are taken in Curaçao;
  3. the bookkeeping takes place in Curaçao;
  4. the registered address of the entity is in Curaçao;
  5. the entity is, to the best of its knowledge, not (also) resident for tax purposes in another country;
  6. the equity is at least suitable for its activities, taking into account the assets of the CIC and the risks that are run;
  7. the entity has qualified employees necessary for the adequate execution and registration of its transactions; and
  8. the directors in Curaçao possess sufficient professional knowledge to execute their duties adequately. These duties are comprised of at least making decisions with respect to transactions the CIC enters into and ensuring the correct processing of the transactions.

Conditions 7 and 8 can also be fulfilled by hiring local professional service providers, supplemented with specific knowledge available within the concern. This specific knowledge may be available inside or outside[2] Curaçao.

Furthermore, the director or employee as meant in conditions 7 and 8 is deemed to have sufficient professional knowledge to execute his duties adequately if the director or employee is subject to supervision by the Central Bank of Curaçao and St. Maarten pursuant to the Ordinance on the Supervision of Trust Service Providers.

If a CIC does not itself meet conditions 7 and 8, but the Curaçao based group entities meet these requirements at concern level, then the CIC is deemed to meet the requirements as well.

Finally, all requirements are deemed to be met if:

  • at least 50% of the nominal capital of the entity is held by ultimate beneficial owners who are residents of Curaçao; or
  • at least one of the directors who is resident in Curaçao has a direct or indirect substantial interest[3] in the entity.

Advance certainty

The MD confirms the possibility to get advance certainty on whether the CIC has a real presence in Curaçao. This can be done by written request to the Inspector of Taxes. If desired, we can draft and file such a request on your behalf.

For more information please contact:


[1] A concern is comprised of the CIC together with the entities:

  1. in which the CIC has an interest of at least one third;
  2. that have an interest in the CIC of at least one third;
  3. in which a third party has an interest of at least one third, while this third party also has an interest in the CIC of at least one third.

[2] Note that the availability of specific knowledge outside Curaçao does not add to local substance.

[3] A substantial interest exists if, in short, an interest of at least 5% in the nominal capital of the entity is held.


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