• Trust Industry Explained
• Managing the Clients interests
• Government Supervision

Trust Industry Explained

The concept of civil law trust originates from the post World War II and Cold War era, when the Netherlands Antilles became popular as safe haven for the protection of assets. Later on, as a result of favorable tax rates and the use of international tax treaties, the use of Netherlands Antilles companies in combination with Netherlands companies became a favorite tax-planning instrument ("the Dutch sandwich"). International tax planning then started to involve more and more jurisdictions: Luxembourg, the Channel Islands, several Caribbean islands. It became a worldwide industry and many small jurisdictions grew the trust industry to an important basis for their local economies. Competitive forces encouraged these countries to make their tax systems more attractive to investors.

However, some tax practices are considered anti-competitive and believed to undermine fair competition and public confidence in tax systems. To fight these tax practices, OECD and non-OECD economies are working together through the Global Forum to address harmful tax practices by improving transparency and establishing effective exchange of information. As a result the OECD has published a black list of countries considered to use harmful tax practices. The Netherlands Antilles is not on this list and has adapted its legislation -where necessary- to comply with OECD guidelines.

The vast majority of the Netherlands Antilles trust industry is located in Curaçao, the biggest island of the Netherlands Antilles. There are more than 65 trust companies in Curaçao alone and close to 200 in the Netherlands. In Curaçao, the Curaçao International Financial Services Association (CIFA) represents the trust service providers, tax advisors, lawyers and accountants. The website of CIFA (www.cifa.an) contains valuable information about relevant legislation in the Netherlands Antilles.