RISK MANAGEMENT AND ASSET PROTECTION

February 03, 2014 8:20 AM
Curaçao offers legitimate risk management solutions
 
Why would one consider an asset protection strategy? There are individuals and business entities all around the world not trusting their government (e.g. fear for expropriation or nationalization by their government). Or they are seeking legitimate protection from any future downturns. 
Or they do not want the world to know about their wealth and do want to protect their privacy as much as possible. Asset protection also can be an aspect of business, personal or estate planning.
 
It is quite common that limited liability companies are used for operating a business. The alternative, a sole proprietorship or a partnership is riskier since personal assets are at risk if being sued. Whether it concerns your business or your private wealth, risk management is something to think about.
 
Under the laws of Curaçao there are several legal entities which hold title to assets in their own name, for instance:
 
  • The Curaçao Trust, which can be used for many purposes, including as a top holding vehicle for international structures, as asset protection tool for previously privately owned assets, as a business or investment trust, in financing- and securitization transactions, as a security trustee and also to set up a protected cell company.
  • A regular Curaçao foundation, which can be used in a number of international asset protection and charity structures.
  • A Curaçao Private Foundation, which can be used in a number of international asset protection and charity structures. The objectives of the Private Foundation, as laid down in the articles of association, may include in general or specific terms the making of distributions to the founder(s), members of its bodies (such as the board of directors and the supervisory board) and/or others (such as children and grandchildren).
The aim of several Curaçao acts, decrees and other regulations is to promote the integrity of the financial industry. For instance, Curaçao has rules for the identification of customers (including UBOs), the identification requirements for the provision of services and the notification of unusual transactions (to prevent money laundering).
 
Many international group or private structures include one or more Curaçao legal entities or partnerships. The main reasons for this are the internationally competitive conditions for business development in the area of corporate law, the tax system, and the well-developed professional financial services industry of Curaçao. Trust (or management services) companies are involved in setting up and maintaining such structures. Supervision of trust companies is dealt with in the National Ordinance on the Supervision of Trust Service Providers 2003 (Landsverordening toezicht trustwezen), which entered into force on 31 December 2003. The supervision is exercised by the Central Bank of Curaçao and Sint Maarten.
 
Risk management and asset protection in particular should be dealt with carefully. Too often people are sheltering their assets for the wrong reasons (creditor fraud [defeating the rights of creditors by fraudulently transferring assets], tax fraud and the like). My message to those people is simple: you are not welcome in Curaçao. We do not want to be engaged in shady business practices.
 
Finally, using a Curaçao entity (limited liability company, private foundation or trust) has the advantage that Curaçao is part of the Kingdom of the Netherlands and thus that the Dutch Supreme Court (Hoge Raad) in the Hague has ultimate jurisdiction over any disputes that may be brought for the courts in Curaçao.
 
The services we offer will be tailored to specific circumstances.
 
Karel Frielink
Attorney (Lawyer) / Partner
 
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