Investment Protection Treaties
When planning to structure investments abroad, consider Curaçao. It has a solid track record as an international financial center. Apart from having a good legal and professional infrastructure, Curaçao also offers good investment protection through its extensive Bilateral Investment Treaties network. When a company or individual asks a professional advisor how best to structure an investment abroad, normally the advice received would only cover tax and financial matters.
From a financial perspective, the advisor would make an analysis of the various options available to finance the investment, such as a combination of equity, which is the clients own capital (funds) and debt, which are funds which can be borrowed from banks or other financial institutions. From the perspective of taxation, the advisor makes an analysis to determine how best to lower the client’s tax burden.
Less known, but perhaps the most important consideration in certain instances, is the application of the rules under a Bilateral Investment Protection Treaty. A Bilateral Investment Treaty offers protection against issues such as unjust revocation of licenses, harmful unexpected changes of law, and disguised or outright expropriation of funds without proper compensation. A Bilateral Investment Treaty’s function is to guarantee a fair and equitable treatment of the investors by the courts of the foreign country in which they are investing. Most of these treaties contain a standard clause that obliges the host country to fully comply with its obligations.
One of the countries that rank very high in terms of the number and quality of Bilateral Investment Treaties is Curaçao. As part of The Kingdom of the Netherlands, Curaçao offers investors the possibility to tap and gain protection in over 100 countries around the world.
The two main factors that make the Bilateral Investment Treaties network of Curaçao worth considering are:
The definition of the term “investments” which is worded fairly broadly. In these treaties, the term investments covers almost all kinds of assets:
(i) movable and immovable property and security rights in relation thereto;
(ii) rights derived from shares, bonds, and other interests in corporations and joint ventures;
(iii) monetary claims;
(iv) intellectual property rights;and
(v) rights to explore, extract and win natural resources and other rights granted under public law.
The fact that, contrary to many others, their coverage is not only for the natural (persons) and legal citizens (corporations) of Curaçao but also for foreigners investing directly or indirectly through Curaçao. To illustrate this, US investors could benefit from the Bilateral Investment Treaty with China by investing in China through a Curaçao-based (sub) holding company.
When it comes to having Bilateral Investment Treaties, the little country of Curaçao is big. In comparison, the United States has only about 40 Bilateral Investment Treaties in place; most off-shore jurisdictions, such as the Cayman Islands, Bermuda, and the British Virgin Islands, have no or only a handful of Bilateral Investment Treaties in place. In addition, in contrast to these other Caribbean off-shore islands, Curaçao is out of the hurricane belt and there is a much reduced risk that your investment portfolio through Curaçao could be interrupted or otherwise harmed through infrastructure damage.
Access to Bilateral Investment Treaties and all of the other above-mentioned considerations make Curaçao an ideal location to consider when structuring one’s investments. We can show you how investing through Curaçao and taking advantage of Bilateral Investment Treaties is worth your time and money.
For more information feel free to contact us.