Curaçao: E-Commerce

On this Page:

- CURAÇAO INTRODUCTION
- CURAÇAO OFFSHORE ACTIVITIES
- CURAÇAO CASE STUDIES
- Curaçao E-Commerce Special Feature - Offshore E-Commerce: Ready for Action?

NB: The Netherlands Antilles as such ceased to exist in October 2010. This page deals with Curacao, the largest component of the jurisdiction, which has taken its place in many respects.

Curaçao Introduction

Curaçao has a telecommunications infrastructure that is considered on par with US and European standards and includes modern digital switches, satellite link-ups, fiber optic cabling, worldwide direct telephone links and mobile networks.

In May, 2006, Digicel, the largest mobile telecommunications firm in the Caribbean, announced the launch of a revamped service on the Netherlands Antillean island of Curaçao.

Investment has been focused on expansion and upgrading of the network to Digicel’s "signature quality and reliability", as well as supporting a shared vision with the Curacao management team to become the leading wireless telecommunications provider on the island.

The company entered the Curacao market through its acquisition of Curaçao Telecom N.V. in 2005 and Digicel invested in excess of US$10 million in 2005 and 2006.

In July 2006, Digicel announced the launch of additional services in the jurisdiction. The underwater optic glass-fibre cable 'Americas II', running from North America via the Caribbean to South America became operational for Curacao in October 2000. In February 2001 another cable with vastly more capacity made its landfall in Curacao with the arrival of the cable-laying ship Manta during its deployment of the optic glass-fibre cable 'Arcos'. Arcos was the highest-capacity submarine cable yet laid, and was the first to be 'self-healing' in the event of physical damage.

Arcos has a capacity of 960 gigabits in comparison to the 25 gigabit capacity of Americas II. The cable connects Curacao directly with several countries in South America, the Caribbean and Miami. The shareholders of Arcos decided to place their 'Network Operation Center' (NOC) on Curacao, under the control of United Telecom Services (UTS), the local telecom holding company in Curacao.

In February 2007, Global Crossing, the global IP solutions provider, announced that it was working with Global Caribbean Network (GCN), a subsea cable operator headquartered in Guadeloupe, in the French West Indies, to enhance global IP connectivity to the Caribbean region.

Under the terms of several agreements, GCN will interconnect its voice and data traffic services arriving from the Caribbean to Global Crossing's IP network in St. Croix, via 10-Gigabit wavelengths, enabling GCN to extend its services to North America, Europe and Asia. Primarily based in the Caribbean, GCN's customers thus gained access to Global Crossing's state-of-the-art global network, so that they can connect to any of the 600 cities in 60 countries where Global Crossing delivers services.

GCN began offering its commercial services in the Caribbean in October 2006 through the official launch of the first phase of its GCN-1 system, which connects Guadeloupe, St. Martin, St. Barthelemy, San Juan and St. Croix.

According to a 2006 Telecommunications Industry Review study, the Caribbean is one of the fastest growing broadband markets in the world. To accommodate this rapidly expanding demand in Latin America and the Caribbean region, Global Crossing announced that it will upgrade its Mid-Atlantic Crossing (MAC) system, which connects North America to Latin America through the Caribbean.

Global Caribbean Network (GCN) is a new cable operator in the Caribbean region. It is a subsidiary of Groupe Loret, one of the main players in the French West Indies and Guiana economies, with sales of EUR500 million (US$647 million) in 2005.

GCN has been awarded a Public Service Delegation contract by the Regional Council of Guadeloupe (FWI) to build and operate a new submarine cable linking Guadeloupe, Puerto Rico, St.Croix, St. Martin and St. Barthelemy to the rest of the world.

Discussions and several initiatives regarding the set-up of an Internet exchange for the Caribbean region, e-commerce and e-zone led in March, 2009, to the launch of the CAR-IX (not-for-profit) Association and founded with financial support from The Netherland Antilles Bureau of Telecommunication and Post of the Netherlands Antilles. Founding members included UTS, Scarlet, Telbo, Digicel and EOCG Wireless. According to a 2010 flyer published by the Caribbean Internet Exchange, 'The CAR-IX platform has been designed and is operated by Amsterdam Internet Exchange (AMS-IX). It provides continuous high quality full capacity peering services for Caribbean and South American networks that want to keep as much traffic local for network optimalisation and financial benefits.'

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Curaçao Offshore Activities

As a major offshore jurisdiction with tens of thousands of offshore enterprises already installed, including many trading companies, it is only a matter of time before the Netherlands Antilles become a centre of e-commerce activity. The islands' geographical location, their good telecommunications links and sophisticated business infrastructure add to the inevitability of a significant e-future for the Netherlands Antilles.

Indeed the Netherlands Antilles has already made a significant start with the opening of a new E-Commerce Park project on Curaçao with a multifunctional datacentre which was operational from November 1, 2001.

The key element of the E-Commerce Park is its location. The Park is situated next door to the UTS building with its direct connection to the backbone of the most important telecom cables resulting in high-quality, continuous 24/7 service from its Network Operating Centre.

The E-Commerce Park provides facilities for global offshore internet companies that re-locate their activities to Curaçao. A company that establishes in the E-Commerce Park building will be awarded vital tax incentives under legislation implemented which provides for the establishment of tax-privileged E-Zone areas.

As of April 1, 2001, special tax legislation for international Internet companies on Curaçao came into force to act as an incentive to persuade e-commerce companies to relocate their activities to the Island. The new law replaces the old Free Zone law and governs 'E-Zones' which are areas within the Netherlands Antilles where international trade and trade supportive services may be carried out by electronic communication and electronic commerce.

Only companies with a capital divided into shares may perform activities in the e-zones including trading or providing services to companies located outside the Netherlands Antilles.

A company may be allowed to conduct business with other firms located in an e-zone but the company has to apply to the local authority before doing so. If given the go ahead the company must meet a certain criteria of conditions relating to price setting, quality of the goods and services on offer and the distribution of goods. The turnover generated through local business may not exceed 25% of the total turnover.

In terms of profit tax the profit of companies within the e-zones will be taxed at 2% - including surtax - until January 1, 2026. This rate is not applicable on the profit of an e-zone company if it is generated by the sale of goods or services to companies located in the Netherlands Antilles or generated through the rendering of services to affiliated companies located in the country. In addition there is no import duty or turnover tax charged on goods entering the e-zones.

Finally, employees who have lived in excess of five years outside the Netherlands Antilles before starting work in an e-zone can qualify for expatriate status, with certain tax-free benefits - providing certain conditions are met. An e-zone company can calculate the wage tax on the net salary of the employee without being required to 'gross up' the salary.

In Feb 2003 Providence, Rhode Island-based Polar Cove, an enterprise information security consultant, established a security monitoring center in Curacao, Netherlands Antilles, from where it offers security protection to on-line gaming companies.

Polar Cove’s Gaming Security Package includes:

• 24 x 7 x 365 Intrusion Prevention and Intrusion monitoring. Polar Cove provides around-the-clock, real-time surveillance of gaming systems from the state-of-the-art control center, responding to security breaches and internal network abuse before your gaming system can be compromised.
• 24 X 7 x 365 Managed Firewall and VPN. Polar Cove's managed security services include managed Virtual Private Networks (VPNs), logical restricted-use networks that make it possible to communicate securely over the Internet from anywhere in the world; and managed Internet security, a Checkpoint Firewall-1 gateway service that restricts data communication to and from a gaming network and includes firewall monitoring, maintenance, and response.
• 24 x 7 x 365 Business Continuity Management & Monitoring. Polar Cove offers: daily data backups, backup power, 24x7 hardware and software monitoring and maintenance, and uptime monitoring.
• Technical Environment Engineered for Security and eBusiness Continuity. Depending on need, there are Windows 2000, Windows.NET and UNIX servers, all with a secure "hardened" OS to provide a high level of security and reliability. Polar Cove engineers can propose eBusiness environments with the appropriate level of redundancies based on stated needs to mitigate risk and support the availability of mission-critical gaming applications.
• Class A Data Center Located in Curacao, N.V. This service provides multiple redundancies in order to minimize potential single points of failure. The center has a high level of physical security.
• Robust Network Connectivity. Redundant switches, routers, and links provide a robust connection to the Internet. The data center is connected via multiple major backbone providers to deliver fast, reliable service.
• Security Assurance Testing and Reporting. Polar Cove conducts periodic vulnerability assessments to validate and ensure that online gaming applications are not at risk.

For information about the impact of e-commerce on a number of the main offshore activities which take place in the Netherlands Antilles, click on a link below to go to our specialist E-commerce site Offshore-e-com.com

Sales and Distribution of Physical Products
Sales and Distribution of Digital Products
Banking and Financial Services (including Investment Funds)
Corporate Support Functions

To see an analysis of the current state of legal and tax issues surrounding offshore e-commerce, click here.

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Curaçao Case Studies

This section will contain case studies of e-commerce solutions applied to offshore business activities carried out from Curaçao.To be kept updated as to our progress click here.

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