History of E-commerce & E-zone
Business on the island of Curaçao
Dr. Miguel Goede
University of the Netherlands Antilles
Today’s objectives
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Curaçao at a glance
Why Curaçao?
What is e-Zone legislation?
How does e-Zone legislation work in practice?
Today’s objectives
• Curaçao at a glance
• Why Curaçao?
• What is e-Zone legislation?
• How does e-Zone legislation work in practice?
Curaçao at a glance
Curaçao at a glance
• Partner in the Kingdom of the Netherlands
• Main economic sectors include Tourism, Oil refinery,
International Financial Services, Logistics
• One levels of government after 2010
• Stable political climate
• Court in the Hague is last resort
• Unique history
• 140.000 population
• Strategic location: Southern Caribbean in front of the
coast of Venezuela
Curaçao at a glance
• 444 km2 /182 square miles
• Dutch is the official language, Papiamentu is the native
language, English and Spanish are widely spoken
• More than 50 nationalities
• Currency is the Antillean Guilder and is pegged to the
US Dollar. Exchange rate is 1 US$ = NAF. 1,82
Economy in 2009
Real GDP
2.1%
Inflation
2.0%
Population
1.9%
Unemployment 9.7%
Youth unemployment 24.7%
Expected developments in 2010
• Economic growth will pick up to 1.6%, reflecting improved domestic
and foreign demand.
• Increased domestic demand will reflect gains in both private and
public demand.
• A cash surplus expected on the general government’s budget due to
the debt relief.
• Worsening of the current account of the balance of payments as
imports of goods and services are expected to rise, partly offset by
increased exports and net current transfers from abroad. The latter
reflects the inflow of debt relief funds.
• Inflation is expected to rise moderately to 2.3%.
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Today’s objectives
• Curaçao at a glance
• Why Curaçao?
• What is e-Zone legislation?
• How does e-Zone legislation work in practice?
Why Curaçao?
• World Class Financial Services
• Attractive investment incentives
• Well equipped infrastructure
Comparative advantages
• Access to the EU market
• Deep sea water ports
• Multilingual workforce
• Culture and sophistication
• Sophisticated financial
• Business Center
services sector
• Friendly environment and
high quality of life
• Dutch based legal system
• Internationally oriented
Education
• Brand new airport
• Sophisticated Tourism
• Close to South America
• Cultural advantages
Infrastructure
• Power and Water
• Telecommunication
• Ports
• Road
• Postal services
• Educational institutions
• Medical care
• Refinery
• New and modern airport
http://nwncable.com/flash/english/map3.swf
Investment climate
• Open to investment
• Modernization of legislation
• Privatization process
• Strategic alliances
Sector Opportunities
• Tourism
• Arts & Culture
• Entertainment
• Transshipment & logistics
• Refinery
• Medical
• Recreation
• Business Services
• Education
• IT/E-commerce
• Telecommunications
• Call centers
• Residential and
Commercial buildings
Today’s objectives
• Curaçao at a glance
• Why Curaçao?
• What is e-Zone legislation?
• How does e-Zone legislation work in practice?
General Definition of an Economic Zone
Economic zones refer to special zones where normal trade barriers
such as import or export tariffs do not apply. Bureaucracy is typically
minimized by outsourcing it to the Free Economic Zone operator and
corporations setting up in the zone may be given tax breaks as an
additional incentive. These zones will attract employers and thus
reduce unemployment and stimulate the area's economy.
Free zones promote economic well-being not only of the
beneficiaries but of the whole economy of the host country in terms
of job creation, attraction of FDI (Foreign Direct Investment),
boosting of export, transfer of technology and management knowhow,
regional development and industrialization.
History of Economic Zone
Economic Zone = e-Zone
• 1975 Curaçao Free Zone Legislation à 2001 Economic
Zone Legislation
• Two types of e-Zones:
– For moving Physical Goods
– For providing Virtual Goods/ Services; Via electronic
communications and information technology
Curaçao has 11 Economic Zones, 2 for Physical Goods
and 9 for Virtual Goods and Services
Today we focus on the e-Zone of Virtual Goods/
Services!
Requirements for Success
• Proper legislation
• Recognition of digital signature
• Superior bandwidth at affordable
rates
• Infrastructure
• Avoid Red-Tape
The e-Zone Incentive
Main motive: Extend the economic base of the
Netherlands Antilles.
• Contribution to the Economic Development of
the Netherlands Antilles
– Generating Foreign Exchange
– Developing e-Commerce
– Converting the Island in International Distribution
Center & International Service Center
– Creating more Job Opportunities
• Requests files with Island Council (DEZ)
e-Zone Tax Aspects
• Profit Tax: 2% instead of 34.5% until 2026
• Import of (Trading and Inventory) Goods are
Exempt of Import Duties and Turnover Tax
• Exemption of Sales Taxes on the Volume of
Sales of Products and Services Rendered
Overseas or to another e-Zone Company
• Exemption of Land Tax
• In conformity with OECD practices
Note: OECD recognizes a server as (part of) Permanent
Establishment
E-Zone e-portunity
• Legislation passed in 2001
• 2% Profit tax rate
• 0% Import duties, sales tax and property tax
• Excellent infrastructure
• Besides Goods also Services!
e-Zone Legal Aspects
• Legal entity with Capital Divided in Shares
• Specific Articles, in particular its Objective
• Registered at Trade Registry at Curaçao Chamber of
Commerce
• Registered Address in an e-Zone and doing business
from an e-Zone
• Apply for Business License and Foreign Exchange
License
• Need a Local Bank Account
• CRIB Number (Tax Identification Number)
• Business Plan
• E-Zone Status License Request by e-Zone Manager
Today’s objectives
• Curaçao at a glance
• Why Curaçao?
• What is e-Zone legislation?
• How does e-Zone legislation work
in practice?
The e-Zone Triangle
How to become an E-Zone
Company
• The Law says that the company needs to
be established in/operating from an EZone
Permanent Establishment
How does your company take domicile in
the e-zone
two options:
• People
• Servers
People vs Servers
People
Servers
Square meters
Physical address
Branches
Rack units (U’s)
IP-address
Bandwidth
People
Housing people
• Office space, depending on amount of
employees
• Superior and competitive telephone rates
• High availability IT-infrastructure
• 24-7 Challenge (time zones)
• Various providers/e-zones
Servers/Equipment
OECD recognizes a server as (part of) PE
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Collocation of hardware in cabinets
Professional Service Providers, SLA’s
24/7 Managed hands on-site
Relatively easy deployment
Define your needs
•Human Support
•Network Infrastructure
•Security
•Your specifics
Network Infrastructure
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Bandwidth Needed:
Peak Traffic
Average
– 8 Mb
– 4 Mb
Future (1yr) Avg – 10 Mb
Space:
Current :
• Bandwidth
• Space
• Connectivity
2 Web Servers
–4U
• Redundancy
2 Firewalls
–2U
• Uptime
1 Database Server – 4 U
------10 U
Connectivity: 2 Ports
Redundancy: Failover protocol VRRP
: Provider must be multi-peered
with BGP
Uptime: As close to 100% as possible!
Future:
More space, bandwidth, services?
The E-Zones in Curaçao
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E-Zone Koningsplein (goods & services)
E-Zone Hato (goods & services)
E-Commerce Park
New Haven E-Zone
E-Powerhouse
E-Zone van Engelen
E-Zone Hoogstraat
E-Trading House
The application process
Standard application form
Regular KYC information
E-Zone administrator
Relatively quick turnaround (10 -15 working
days)
Acquiring e-Zone License
• Application for the e-Zone Status License by e-Zone Manager
• Provide DEZ with required corporate documents
• Provide DEZ with Business Plan specifying:
– Economic Contribution,
– Growth in Local Employment and
– Stimulus of Flow of Foreign Currency
Acquiring the e-Zone Status License is subject to approval by
the e-Zone Committee chaired by the DEZ. Other parties are:
Inspectie der Belastingen (invoerrechten en accijnzen), DROV,
Afdeling Juridische Zaken van Eiland Gebied Curaçao
Examples of e-Zone Businesses
• International Trade and Distribution
• Entertainment
• Services: Travel Agency, Reservations,
Information
• Logistical Services
• Software Sale and Leasing
Anything that can be sold and distributed through the
WWW, telephone and/or fax is possible!
Who’s already
there (except you; here’s a
shortlist)
• First Caribbean
International Bank
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Total Bank
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Marriott, Hilton, Renaissance,
Hyatt, Wyndham, Best Western,
• RBTT
Superclubs Breezes
• Guardian
• Sagicor
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Ansari Corporation
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Productive Business Solutions
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Digicel
Indian companies in Curaçao
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Boolchand
La Curaçao
La Palestina
Hermanos Lalo, Daryanani family
Baba’s
Omni Electronics
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http://www.newhaven-ezone.com
http://www.hbmgroup.com
http://www.e-commercepark.com
http://www.cifa-curacao.com
http://www.businesscuracao.com
www.miguelgoede.com
Questions
Thank you
Sources
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Eliane Behr MBA
Herman Behr MBA
Robert Vermeulen MBA
Arthur Rosaria MBA
Central Bank of the Netherlands Antilles