Estate Planning
The English word estate planning is also used in the Dutch legal language and includes the idea of having assets and/or enterprises pass on unto the next generation in such a way that less succession tax (successiebelasting) must be paid and that the decision rights with regard to those assets are arranged properly.
Examples: Stichting Administratiekantoor
A father, who started his enterprise long ago and who has transferred his enterprise to his own limited liability company, wants his son to be his successor as director of the company without the other children having any influence on the company. It seems easy to have his son appointed director and become the sole shareholder, but forced heirship rules may prevent the wishes of the father.
In practice the following solution is applied. The father transfers his shares to a foundation, which foundation in its turn issues so called depositary receipts ("certificaten van aandelen") to the father. These depositary receipts entitle their holders to all distributions, received by the foundation, but do not entitle to any voting rights. The foundation now has become the sole shareholder of the company. The father and the son will be the directors of the foundation, with the right to appoint their successors. As board members of the foundation they appoint the directors of the company and they decide on whether or not profits are distributed to the shareholder (and indirectly to the holders of depositary receipts).
The result of this is, that after the passing away of the father, the son is in power and the children are holders of depositary receipts and entitled to any dividends, if and when distributed.
Private Foundation (in Dutch Stichting Particulier Fonds)
A private foundation is a foundation, which may distribute assets and money to anyone and these distributions are free from any taxation in Curacao. No one can be regarded as owner of the foundation and the board of the foundation may designate beneficiaries of the foundation. The private foundation is used as the civil law equivalent of the Anglo-American trust.
Low tax rates succession tax
The low rates of succession tax in Curaçao provide possibilities of passing assets to next generations (children and grand children) by persons having their residence in Curaçao. Especially for persons, who are planning to move from Curaçao to a country with high succession tax rates, like England or The Netherlands, there are possibilities to make donations to the next generations in several ways in order to avoid those high tax rates.
Shares without voting rights
In Curaçao it is possible to create companies, with voting shares and with non-voting shares. The estate planning can be done by leaving the voting shares to one of the children (or to a trustee), while the (other) children will get the non-voting shares. There are several possibilities in the Curacao corporate law to structure the estate planning.
Trusts
On January 1, 2012 the possibility of the trust, similar to a Delaware trust, was introduced in our legal system. The trust can be tailor made to the wishes of the client. Because the forced heirship rules and the prohibition of the entail (in Dutch "fideicommis") have been abolished, the trust can be used without restrictions.
