Estate planning in Curaçao

To maintain and increase the attractiveness of the Netherlands Antilles as an international financial services centre, legislature introduced a totally new legal entity in 1998: the Antillean Private Foundation (or SPF as it is locally known). The Netherlands Antilles ceased to exist in 2010 and since then, the tax-efficient version of the SPF is available in Sint-Maarten and Curaçao only. In Curaçao, the legal framework of the Private Foundation is the Curaçao Corporate Code, which has been revised on the first of January 2012 and which can be considered as a very flexible and modern legal framework. Among other things, the Curaçao Private Foundation (SPF) offers very interesting tax planning opportunities to international investors.

The Curaçao SPF

The Curaçao Private Foundation (SPF) is a separate legal entity (like a company) without shareholders (unlike a company) and with assets and liabilities in its own name. The Curaçao Private Foundation is a special form of the legal concept ‘foundation’. The legislator of Curaçao was inspired by the legal frameworks of foundation jurisdictions such as Austria, Liechtenstein and Panama. Although we’re talking about a foundation, there are some differences between the Curaçao SPF and a traditional foundation. Firstly, the Curaçao SPF isn’t allowed to carry out a business in order to realise profits. Secondly, the SPF is allowed to make distributions to individuals and family members, whereas a pure traditional foundation is only allowed to grant distributions with a charitable, social motive.

Furthermore, there are no restrictions whatsoever so one doesn’t have to use the assets to serve the objective(s) of the SPF (as opposed to a traditional non-profit organisation). Whatever its objective(s), the SPF can use its capital to make any possible form of investment. Additionally, the legislation clearly states that a Curaçao SPF is allowed to operate as an investment or holding entity and that this isn’t considered as carrying out a business.

Tax aspects

The Curaçao Private Foundation is exempt from profit tax in Curaçao and there’s no requirement to file the annual financial statements with the Commercial Register. When a non-resident of Curaçao transfers assets into the Private Foundation, this contribution is exempt from Curaçao gift tax. When the Private Foundation makes a distribution to non-residents of Curaçao, these distributions are fully exempt from Curaçao gift tax. When the person transferring assets into the Private Foundation or receiving distributions from the Private Foundation is a resident of Curaçao, the situation is different and gift tax is due.

It should also be borne in mind that the individual transferring the assets into the Private Foundation and the beneficiaries receiving a distribution from the Private Foundation will possibly have to pay gift tax and income tax respectively in their country of residence. To conclude: the SPF itself is entirely exempt from all taxes in Curaçao (except for a transfer tax which might be due on the transfer to or by the Private Foundation of real estate located in Curaçao).

Other conditions

Both natural persons and legal entities can act as the founder of a Curaçao Private Foundation and a nominee founder is permitted. Frequently, a local fiduciary service provider acts as the founder, the so-called nominee founder, and after incorporation, the founder rights are transferred to the anonymous real founder. The founder has almost unlimited freedom to organise the SPF according to his/her/its wishes and only a few conditions need to be fulfilled:

The SPF has to be established by a Notarial Deed executed before a Curaçao notary. Furthermore, the SPF must be registered in the register of foundations of Curaçao. The Articles of Association (incorporation documents which are publicly accessible in the public register of Curaçao) must contain the name and objectives of the SPF, and the address in Curaçao where the SPF has its seat. Additionally, these articles of association must specify how directors are appointed and dismissed (the founder can appoint the directors but it can also be determined that the board of directors appoints its own directors). Last but not least, a director must specify the manner in which any liquidation surplus will be allocated in the case the SPF should be dissolved in the future.

The articles of association have to contain only elements that are required by law and can remain quite undetailed and superficial. Besides the articles of association, which are publicly accessible, the founder has the ability to formulate a Letter of Wishes. This letter of wishes is private and completely confidential. Neither the notary, nor the authorities of Curaçao have access to it. The founder can give, in complete confidentiality, very clear instructions to the director(s) about (1) what kind of distributions are to be made and to whom (individuals or legal entities receiving such distributions are called ‘beneficiaries’) and (2) how the assets should be managed and invested. Of course, the founder also has the possibility to grant enormous discretionary powers to the directors. Important to note is that beneficiaries nominated in the letter of wishes can neither individually, nor as a group, claim any benefit against the SPF (important for tax planning reasons in the beneficiaries’ country of residence).

The SPF can be established for a specific period or for an indefinite period. This is different from a trust, as a so-called perpetual trust isn’t possible (the concept ‘trust’ will be explained later). The specific period can also be a period that ends when a particular event occurs. As said before, the board of directors may decide to liquidate the SPF and agree on the distribution of the surplus upon liquidation. However, it’s also possible to make other arrangements and to empower the founder to liquidate the SPF for example.


The name of the founder doesn’t have to appear in the articles of association and as a consequence, the founder’s name isn’t mentioned in any public register. Additionally, a local fiduciary service provider is allowed to act as nominee founder and as a director of the SPF. The names of the beneficiaries and the details of any distributions to be made can remain strictly confidential by creating a Letter of Wishes.


The SPF can be used in situations where it’s desirable to transfer individual or family assets into an entity which is subject to a favourable tax regime. The SPF functions as a crucial entity for estate planning purposes. Then it becomes an instrument to ensure a smooth transfer of assets to the future generation(s) or other successors in accordance with the wishes of the founder. An additional benefit is that the assets can be transferred to the successors while postponing their right to dispose of the assets. Under certain circumstances, multiple gift and inheritance taxes can be avoided by using an SPF. For example, the SPF can function as the owner of the shares of a family business. Furthermore, the SPF can be used as an asset protection instrument and an investment holding entity. A Curaçao Private Foundation can also be specifically designed for artistic purposes and to hold a special valuable art collection together, for example.

Always remember that the most important issues to be addressed are two fiscal aspects. First, what are the fiscal consequences for the founder in his/her country of residence? Is there any gift tax due when he/she transfers assets into the SPF? Secondly, what are the fiscal consequences for the beneficiaries in their country of residence when they receive certain distributions? Based on the analysis of these two aspects, one can start customising the structure to make it, in a creative way, tax-efficient.

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