Under Netherlands Antilles law, no specific requirements exist regarding the purchase of shares in a Netherlands Antilles offshore company by a foreign company. The Netherlands Antilles do not have any anti-trust regulations.

In the Netherlands Antilles there are no statutory requirements preventing the sale of one or all the shares issued and outstanding or any requirements in the form of governmental license or registration. Certain restrictions apply however, if the target company is a bank or insurance company.

According to Netherlands Antillean corporate law shares are transferable, in principle. However, there is one exception. The articles of association may exclude or limit the transfer of registered shares. The transfer of registered shares is effected either by serving a deed of transfer upon the company, or by written acknowledgement of the transfer by the company, which can only take place by an annotation on the share certificate, if share certificates have been issued.

It should be noted that, in order to qualify for a business license and a foreign exchange exemption, the company should have at least one local managing director or a local representative.

Karel Frielink
Attorney (Lawyer) / Partner

The General Pension Fund of the Netherlands Antilles (‘Algemeen Pensioenfonds van de Nederlandse Antillen’; the “APNA”) is governed by its own State Ordinance (‘Landsverordening Algemeen Pensioenfonds van de Nederlandse Antillen’; “SOAPNA”).

The APNA is subject to supervision by the Netherlands Antilles Central Bank and, as far as the annual financial statements, amongst other things, are concerned it is subject to supervision by the General Auditor’s Office a.k.a. General Chamber of Audit (‘Algemene Rekenkamer’). The General Auditor’s Office audits government and government related activities, including government owned companies.

Netherlands Antilles pension funds are obliged to invest domestically 40% of the first tier of NAf 10 million (US$ 5.6 million) of the total provisions and liabilities, 50% of the second tier of NAf 10 million and 60% of the remaining provisions and liabilities (Central Bank Announcement regarding Foreign Exchange of 1 July 2000; 2000/K.7).

According to Article 16 of the SOAPNA, certain restrictions apply to the investment products in which the APNA may invest its funds. The only funds which may be invested in are, for instance, first class shares (Blue Chip), which must be officially listed on one of the global exchanges, and first class bonds (‘obligaties’) which must be marketable on one of the global exchanges. The other products/categories mentioned in the SOAPNA all deal with local investments: shares, bonds and real estate in the Netherlands Antilles.

Karel Frielink
Attorney (Lawyer) / Partner

On 18 November 2008, the Administrative Court in Sint Maarten ruled that the Executive Council of Sint Maarten was not authorized to refuse Scarlet a business license for the provision and operation of international telecommunications services in Sint Maarten (click here for the judgment).

Scarlet, represented by Dr. Douwe Boersema of the law firm Spigthoff in Curaçao, appealed through the courts against the decision of the authorities in Sint Maarten to deny it such a license based on a moratorium on new telecom companies. The moratorium had been effectuated by Sint Maarten in October 2002.

The Court ruled that the moratorium was unlawful, based on the fact that Sint Maarten did not have the authority to rule on telecommunication issues. In accordance with legislation, only the Governor of the Netherlands Antilles has that authority.

Considering the decision by the Netherlands Antilles Council of Ministers to liberate the market for international telecommunications in the Netherlands Antilles as a whole, Sint Maarten could not restrict the entrance of new telecom companies to the island. The Court instructed Sint Maarten to re-consider Scarlet’s request for a business license, without allowing telecom interests to weigh in the matter.

This ruling is a major breakthrough for telecom companies that wish to offer services for long distance telecommunications. It will again force the existing telecommunications companies on Sint Maarten, like Telem and Telcell to cooperate, as was previously the case prior to the moratorium, with other companies operating on Sint Maarten.

Karel Frielink
Attorney (Lawyer) / Partner

See also The Daily Herald.

Under the National Ordinance on the supervision of the insurance brokerage business 2003 (Landsverordening toezicht assurantiebemiddelingsbedrijf 2003, “NOSA”), insurance brokers (assurantiebemiddelaars) are prohibited from providing services as an insurance broker unless they are registered in the relevant register administered by the Central Bank. “Insurance Broker” means anyone who, other than pursuant to an employment contract, acts as an intermediary in the conclusion of insurance policies.

There is no statutory definition of “to act as an intermediary”. However, this phrase aims to cover all acts that are intended to conclude an agreement between a potential insurant and an underwriter. Accordingly, even where no agreement has been concluded, the act of making a contact is considered as acting as an intermediary, though merely giving advice, however, is not considered as such.

Persons applying for registration must be able to demonstrate certain professional skills before being allowed to operate as an insurance broker.

Karel Frielink
Attorney (Lawyer) / Partner

A foreign insurance company, i.e. a company not having its seat in the Netherlands Antilles and not operating through any kind of branch office (including a local representative), is allowed to insure a risk located in the Netherlands Antilles (for instance Curaçao), provided this occurs on an incidental basis (Explanatory Memorandum NOSI, Parliament of the Netherlands Antilles, Session 1987-1988, No. 3, p. 7).

In such cases, no license or registration requirements apply. The point is, however, that it is up to the Central Bank to decide whether this criterion has been met. Unfortunately there are no policy guidelines or guidance available (e.g. no case-law) on what is considered ‘incidental‘. It is likely that, amongst other things, both the number of insurance policies concluded as well as the total of the (yearly) premiums will be of relevance.

Although the Explanatory Memorandum only mentions ‘risks situated in the Netherlands Antilles’, I see no justification for the view that ‘risks situated outside the Netherlands Antilles’ are thus excluded. In my opinion, a foreign insurance company (as defined above) is allowed to insure a risk in or outside the Netherlands Antilles, for an Antillean client, provided this takes place on an incidental basis.

According to Article 44 NOSI, the Minister of Finance of the Netherlands Antilles may, at the request of the Central Bank, issue an order to prevent a particular foreign insurance company from offering its services in the Netherlands Antilles. It may reasonably be assumed that such an order will not affect any insurance agreements previously concluded.

Karel Frielink
Attorney (Lawyer) / Partner

The insurance business in the Netherlands Antilles is regulated by the National Ordinance on the Supervision of the Insurance Business 1990 (Landsverordening toezicht verzekeringswezen, the “NOSI”).

The NOSI divides the insurance business into life insurance and indemnity insurance products. Indemnity insurance products are in turn divided into a number of categories: (i) accident and health insurance; (ii) motor vehicle insurance; (iii) maritime, transport and aviation insurance; (iv) fire insurance and other property insurance; and (v) other indemnity insurance.

Any person or entity wishing to conduct either life insurance or indemnity insurance business in or from the Netherlands Antilles must first obtain a license from the Central Bank. The NOSI does not allow insurance business other than life insurance or indemnity insurance to be carried out, but does allow reinsurance, for which no license is required.

The NOSI distinguishes between foreign and Netherlands Antilles insurance companies. Licensed Netherlands Antilles insurance companies must have the legal form of a mutual insurance association (onderlinge waarborgmaatschappij) or a public or private company with limited liability (naamloze of besloten vennootschap). At least two people must be responsible for the insurance company’s day-to-day policy. These will usually be the members of the Management Board. In addition, public or private companies must have at least three Supervisory Board members. In exceptional circumstances the Central Bank may grant exemptions from this requirement, for instance, if an insurance company is a direct or indirect subsidiary of a company with a Supervisory Board.

Those persons responsible for the day-to-day policy in a licensed insurance company must have sufficient expertise and be considered sufficiently trustworthy by the Central Bank. The Central Bank assesses their expertise and trustworthiness when the application for a license is processed.

Karel Frielink
Attorney (Lawyer) / Partner

What is the procedure for the service of foreign proceedings under Netherlands Antilles procedural law for a company having its registered address in, for instance Curaçao?

Under Netherlands Antilles procedural law, the service of proceedings on a Netherlands Antilles legal person will be done by means of a bailiff’s notification. This notification shall be served (i) on the person or residence of the president of the management board of the company or (ii) on the business and/or registered address of the company.

Netherlands Antilles procedural law does not provide for the possibility to serve the proceedings on the address of the company’s lawyer.

In our view the required language of documents of proceedings before, for instance an English court, to be served on a defendant in the Netherlands Antilles, would, being based on English law, have to be in English. However, the official language in the Netherlands Antilles is Dutch. English is not an official language on Curacao. Therefore, insofar as this is not already required under English law, I would advise attaching a certified Dutch translation of the official court document in which the company involved is called to appear before the English court, to the documents to be served.

Karel Frielink
Attorney (Lawyer) / Partner

Under the Civil Code of the Netherlands Antilles (article 7:428), an agency agreement is defined as a contract for a fixed or indefinite period of time between a principal and an agent, whereby the agent agrees, against payment, to mediate in the conclusion of contracts and to eventually conclude these contracts in the name and for the account of the principal, without being subordinate to the principal.

An agent shall be entitled to a commission for the negotiation of commercial transactions concluded after the sales representation contract has been terminated:

• if the transaction is mainly attributable to the sales representative’s efforts during the period covered by the sales representation contract and if the transaction was entered into within a reasonable period after the sales representation contract was terminated; or
• if the third party’s order reached the principal or the sales representative before the sales representation contract was effectively terminated, provided certain conditions are met, for instance that the agent mediated in the conclusion of the order.

It should be noted that the terms “mainly attributable” and “reasonable period” are not defined by the Netherlands Antilles Civil Code. In the event that the agency agreement has been terminated and certain conditions are met, an agent may be entitled to goodwill compensation.

Karel Frielink
Attorney (Lawyer) / Partner

National boundaries these days are increasingly less significant, even for small or mid-size law firms. Though Spigthoff Attorneys & Tax Advisers can hardly be called a global law firm, with only two offices, one in Curacao and one in Amsterdam, we can however offer services to our clients world wide.

It is not necessary to have a presence in every region of the world to operate across borders and cultures. One can work together with reputable local law firms in any and all countries. It saves time and money not having to be bothered by issues related to organizing ones foreign offices, how to compete in a global legal arena or how to manage ones staff on a global scale. In other words: a mid-sized firm like Spigthoff is able to provide effective legal representation in every country and in every major area of legal practice, without being bothered by major overheads. Thus even a small or mid-size law firm can be a “one-stop shop”, provided it continually monitors the standard of quality of the foreign law firms it works with.

Also, being a global firm raises the probability of conflicts. As a small or mid-size law firm one can choose among various alternatives consulting with the client and carefully considering his needs and wishes.

Spigthoff Attorneys & Tax Advisers (Curacao, Netherlands Antilles)

Spigthoff law firm is a market leader with its strengths in the areas of financial services, corporate, tax and litigation. We practice law throughout the Dutch Caribbean and are routinely called in to assist clients with their most critical issues.

Our clients include a diverse group of institutions and individuals: from local and international banks to large funds; from foreign companies seeking to transact business in the Dutch Caribbean to local companies doing business abroad; from high net-worth individuals to governments; from telecom companies to airlines; from real estate project developers to hotel chains.

Spigthoff is a top law firm. Our attorneys and tax advisers are not only excellent professionals, they are also practical, creative and proactive in working with our clients. Their goal: cost-effective and straightforward solutions to complex legal and tax issues, combining skill with a tough approach where necessary.

Our lawyers and tax advisers deal with complex issues on a daily basis and finding effective solutions is second nature to them. Resolution by mutual agreement is often the preferred way to go, however we do not shun litigation in the interest of our clients. A quick solution via rapid injunctions is often preferable to time consuming debates. We are ambitious and assertive, with a strong client commitment. Just what the doctor ordered for those requiring a “robust” solution to their problem.

We started our firm in 2001 with litigation experts specialized in the fields of corporate, securities and banking law, however also including tax law professionals. Spigthoff has since built up a fearsome reputation based on quality, an unwavering sense of direction and on fearlessness. With our focus on international business, our Curacao office has through the years also developed a distinct local practice.

Clients see us as being on the ball: rapid and solution-oriented. They appreciate our personal style, our accessibility and straight talk.

Corporate law

Spigthoff is highly experienced in public and private transactions, including mergers, takeovers, management buyouts and corporate governance. We provide legal services to a variety of clients, from (publicly held) large multinational companies to (start-up) private businesses.

Our broad practice intersects with related practices, in particular tax, labor law and banking & securities. Prof. Alexander Mohr of Spigthoff co-drafted the Netherlands Antilles corporate code and Karel Frielink is the author of the leading corporate textbook.

Spigthoff represents a variety of businesses with regards to their original establishment, initial capitalization, ongoing financing transactions (private equity and debt), (cross-border) contractual relationships, joint ventures, shareholders’ agreements and directors liability. Our areas of practice include advice on exit-strategies, whether by private sale or initial public offering, E-Commerce, limited partnerships and tenders.

Financial Transactions

Spigthoff has wide experience in financial transactions, including securities transactions, private equity, venture capital,  investment and hedge funds, corporate and project  finance, IPOs, private placements, (term loan) credit facility agreements, structured finance (collateralized debt obligations, credit-linked notes, note issuance programmes, securitizations and acquisitions), security documentation, ship financing, aircraft financing, group finance companies and convertibles.

We also advise our clients on reporting matters and regulatory issues, helping our clients develop compliance systems and procedures.

Spigthoff represents a variety of clients regarding the establishment, structuring, and regulatory matters related to funds, including private investment funds, mutual funds, hedge funds, umbrella funds and real estate funds. We advise on exit-strategies, whether by private sale or initial public offering.

Additionally, we often assist national and international clients dealing with complex financial transactions and the resulting tax issues. Tax considerations often represent a central consideration in structuring hedge and other funds. Our tax lawyers have worked on various international tax-planning strategies and transactions.

Tax law

Spigthoff provides guidance on the full range of business and personal tax issues for clients, including investment and hedge funds, high net-worth individuals, venture capitalists, multinational companies, emerging companies and lending institutions. We strive to find innovative solutions to complex situations.

Our tax professionals advise on mergers and acquisitions, joint ventures, limited liability companies, reorganizations, the structuring of foreign investments, debt-for-stock and other exchanges, private foundations, real property investments, e-commerce, e-zone companies and individual as well as corporate (international) tax-planning.

Spigthoff also represents clients in tax disputes, including profit tax, personal income tax, sales tax, estate and gift tax, international tax, and disputes related to international treaties. We have extensive experience in dealing with various tax authorities. We attempt to resolve disputes out-of-court, but if necessary we stand ready to engage in tax litigation.

Litigation

Spigthoff is routinely called on to assist clients with their most critical matters. We handle complex commercial litigation, including shareholder and corporate control disputes, director liability issues, contractual disputes, investment management disputes, insurance coverage, regulatory and administrative law, intellectual property infringements, employment disputes, telecommunication matters and real estate related disputes. As far as banks and other financial institutions are concerned, we both represent and sue them (the latter only if not being a client of course).

We attempt to resolve disputes out-of-court, but if necessary we stand ready to engage in litigation, whether in court or any alternative dispute forum. We also counsel clients on minimizing litigation risks.

Spigthoff represents a variety of investors, financial institutions, private persons and businesses. The cases we handle are as varied as the clients we represent, who have chosen Spigthoff because they need a troubleshooter in their corner.

If you have any questions or if you are considering engaging our firm, please feel free to contact me at Karel.Frielink@Spigthoff.com. We have been life savers for many before you.

Karel Frielink
Attorney (lawyer) / Partner

Click here for what Bloomberg.com has to say about legal boutiques and suing financial institutions.

The termination of the employment contracts of more than 25 employees or of 25% or more of the employees of a company is considered a mass lay-off. For such a mass lay-off permission is required from the Director of the Department of Labor and Social Affairs irrespective of the nature of the company’s activities. The Director must be informed by the employer at least two months prior to the (intended date of) termination of the employment contracts. Simultaneously, or at least within eight days of notifying de Director the employer must provide the Director with a redundancy arrangement (“afvloeiingsregeling”).

The redundancy arrangement should include the (financial) measures the employer has taken or is willing to take to mitigate the consequences of being laid-off for the employees. The Director will base his decision on whether these terminations are reasonable and socially acceptable on the foregoing, in combination with an assessment of the financial position of the company.

Although there are no exact guidelines on how to determine the reasonableness of a redundancy arrangement, we consider that the so called ‘cantonal court formula’ (kantonrechtersformule), a guideline the court will use when asked to dissolve an employment contract, is an important indicator.

No later than six weeks after receipt of the redundancy arrangement the Director will communicate his (written) opinion thereof. An employer is obliged to wait for the Director’s opinion before it may terminate the employment contracts. Should the employer not do so or should it terminate the contracts in spite of a negative advice from the Director then the employees will be entitled to start legal proceedings for damages on the grounds of manifestly unreasonable dismissal.

Another possibility is to institute proceedings for dissolution of (all) employment contracts through the courts. In these proceedings the statutory period of notice is not applicable. The court may be requested to dissolve the agreements at the earliest possible date. The dissolution proceedings will usually take approximately two months. If the court agrees to the dissolution, it will generally dissolve the contracts as of the date of its decision.

Karel Frielink
Attorney (Lawyer) / Partner