Curaçao has made significant strides to solidify its economic position on the global stage by forming strategic partnerships with Suriname and San Marino. These agreements underscore the island’s commitment to expanding trade, attracting investments, and bolstering international cooperation, positioning itself as a key player in global markets.
Curaçao-Suriname Trade Collaboration
A milestone in regional cooperation was marked by the recent visit of Suriname’s President, Chandrikapersad Santokhi, to Curaçao. During the visit, Suriname’s Minister of Foreign Affairs, Albert Ramdin, and Curaçao’s Minister Charles Cooper signed a Partial Scope Trade Agreement (PSTA). This agreement focuses on expanding trade in strategic sectors such as oil and gas, fisheries, tourism, and agriculture. It aims to reduce trade barriers, encourage mutual investments, and strengthen bilateral economic ties.
Cultural and economic bonds between Suriname and Curaçao are strong, reinforced by a shared language and a significant Surinamese community in Curaçao, creating an environment conducive to cooperation. Suriname is well-positioned to supply Curaçao with essential agricultural products, including fruits and vegetables, while exploring opportunities in the oil and gas sectors. President Santokhi emphasized Curaçao’s crucial role in financing Suriname’s burgeoning energy industry.
To further solidify this partnership, a Letter of Intent (LOI) will be signed between Minister Ramdin and Curaçao’s Minister of Economic Development, Ruisandro Cijntje, to initiate broader negotiations on industry, trade, and investment. These discussions will also address technical cooperation, paving the way for a comprehensive bilateral trade agreement and a tax treaty. This strategic collaboration is set to unlock new growth opportunities and drive economic diversification.
Curaçao-Suriname Tax Treaty
Another significant step in strengthening regional cooperation is the new tax treaty between Curaçao and Suriname. This treaty aims to eliminate double taxation, reduce fiscal uncertainties, and promote trade and investments between the two nations. Aligned with the OECD Model Tax Convention, the treaty includes provisions to combat tax evasion and abusive practices, incorporating anti-abuse clauses and measures against treaty shopping.
Key elements of the treaty include:
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- Prevention of Double Taxation: Utilizing exemption and credit methods to regulate income taxation, with active income generally exempt and passive income subject to credits;
- Permanent Establishments (PEs): Profits from PEs are taxable only in the host country, with regulations to prevent profit shifting through inappropriate pricing;
- Employment and Special Provisions: Salaries are typically taxed in the country where work is performed, with exceptions for short-term assignments, directors, public servants, artists, athletes, and pensions.
The treaty fosters economic growth and trade by creating a favorable fiscal environment and removing barriers. Additionally, it allows other territories in the Kingdom of the Netherlands, such as Aruba and St. Maarten, to opt in, significantly broadening its potential impact. While the treaty is not yet in effect and undergoing legislative processes, Curaçao’s Ministry of Finance has been proactive in disseminating information to prepare businesses and individuals for the upcoming changes.
Curaçao-San Marino Tax Treaty
In another step toward strengthening international ties, Curaçao signed a landmark tax treaty with San Marino on November 20. This agreement aims to eliminate double taxation and combat tax evasion, providing clear guidelines for businesses operating in both jurisdictions. By creating a transparent fiscal environment, the treaty ensures companies can operate confidently while meeting international compliance standards.
Curaçao’s strategic location as a Caribbean trade hub, combined with San Marino’s financial stability and expertise, creates a unique synergy that benefits both economies. The new tax treaty removes barriers that previously hindered cross-border trade and investment, making Curaçao an even more attractive destination for foreign investors.
Aligned with this agreement, Curaçao’s recent shift to a territorial tax system—taxing corporations based on locally generated income—demonstrates the island’s commitment to global taxation standards. This reform, compliant with OECD guidelines, enhances Curaçao’s appeal as a business-friendly jurisdiction.
The treaty’s practical benefits include a clearer path for businesses to avoid double taxation, facilitating capital flows between Curaçao and San Marino. Additionally, it strengthens the tax governance of both nations, improving revenue collection and creating more efficient administrative processes.
Despite challenges in practical implementation, the treaty has the potential to streamline fiscal operations and promote economic cooperation significantly. It serves as a powerful reminder of how tax policy can strengthen international economic relationships.
A Unified Vision for Economic Growth
Both the trade agreement with Suriname and the tax treaty with San Marino reflect Curaçao’s strategic vision for economic advancement. While distinct, these agreements share a common goal: to drive sustainable growth and establish Curaçao as a global business hub. The trade deal with Suriname leverages regional partnerships, while the tax treaty with San Marino aligns Curaçao with global fiscal standards, creating a more attractive environment for foreign investments.
As Curaçao’s agreements with its international partners evolve, the island reaffirms its commitment to strengthening the global economy, positioning itself as a strategic jurisdiction for both regional and international business. With robust trade and tax partnerships, Curaçao not only diversifies its growth sources but also creates a safer, more attractive environment for global investors.
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Published on December 9, 2024