The government of Curaçao approved a law that will allow
for the formation of trust funds. A Curaçaotrust will be
treated similar to the well known private foundation (Stichting
Particulier Fonds, SPF).
The SPF is a type of tax exempt private foundation that does not
need to have a charitable purpose. Though it may not engage in
profit making business activities, it can strive to manage assets
profitably Since payments to beneficiaries outside Curaçao
are not taxed either, money can flow freely in and out of an
SPF.
Private foundations are often used in our tax-planning structures
because they offer protection against business liabilities and
allow for the transfer of income to private hands.
A trust is basically a common law version of a foundation: instead
of a founder, there is a settlor, and instead of a director there
is a trustee. But in spite of the similarities and similar tax
treatment of a Curaçao trust and private foundation, it does
make a difference for other nations. The use of a trust or a
foundation can be instrumental for tax planning structures,
depending on whether the proposed beneficiary is living in a common
law or civil law jurisdiction.
With enacting a trust law, Curaçao has just increased its
tax planning market potential by a large measure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
