Doing Business in
Bonaire
www.bakertillyinternational.com
This guide has been prepared by Baker Tilly Bonaire, an independent
member of Baker Tilly International. It is designed to provide information on
a number of subjects important to those considering investing or doing
business in Bonaire.
Baker Tilly International is the world’s 8th largest network of independent
accounting and business advisory firms by combined fee income, and is
represented by 154 firms in 133 countries and 27,000 people worldwide.
Its members provide high quality accounting, assurance, tax and specialist
business advice to privately held businesses and public interest entities.
This guide is one of a series of country profiles compiled for use by Baker
Tilly International member firms’ clients and professional staff. Copies may
be downloaded from www.bakertillyinternational.com.
Doing Business in Bonaire has been designed for the information of readers.
Whilst every effort has been made to ensure accuracy, information
contained in this guide may not be comprehensive and recipients should
not act upon it without seeking professional advice. Facts and figures as
presented are correct at the time of writing.
Up-to-date advice and general assistance on Bonaire matters can be
obtained from Baker Tilly Bonaire, contact details can be found at the end
of this guide.
September 2015
Contents
1 Fact Sheet
2
2 Business Entities and Accounting
2.1 Companies
2.2 Partnerships
2.3 Foundations
2.4 Sole Proprietorships
2.5 Audit and Accounting Requirements
2.6 Filing Requirements
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3 Finance and Investment
3.1 Exchange Control
3.2 Banking and Sources of Finance
3.3 Investment Incentives and Restrictions
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4 Employment Regulations
4.1 General Employment Matters
4.2 Visas 4.3 Trade Unions
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5 Taxation
5.1 Corporate Income Taxes
5.2 Personal Taxes
5.3 Employment Related Costs and Taxes
5.4 Withholding Taxes on Payments Abroad
5.5 General Expenditure Tax
5.6 Other Taxes
5.7 Tax Incentives for Businesses
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2
1 Fact Sheet
Facts and figures as presented in sections 1 through 4 are correct as at 8
September 2015.
Geography
Location: Caribbean
Area: 294km²
Land boundaries: None
Coastline: Caribbean Sea
Climate:
Tropical marine; little seasonal temperature variation
Terrain: Flat with a few hills; scant vegetation
Time zone: GMT -4
People
Population: 18,413 (January 2014)
Religion:
Roman Catholic 68.2%, Pentecostal 6.7%, Evangelical 4.5%, Protestant 2.7%,
other 6%, none 12% (2013)
Language: Dutch is the official language. Papiamentu, English and Spanish are also spoken
Government
Name: Bonaire (part of the Caribbean Netherlands)
Government type: Constitutional monarchy
Capital: Kralendijk
Administrative divisions: Special municipality of the Kingdom of the Netherlands
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Political situation
The Island Council (Eilandsraad) is responsible for policy decisions and for
overseeing their implementation. There are nine seats and members are directly
elected for a term of four years. The Executive Council (Bestuurscollege) is
responsible for the daily management of Bonaire, for preparing and implementing
council decisions, and for making decisions such as the grating of permits. The
Island Council supervises the Executive Council. The members of the Executive
Council are the Lieutenant Governor, who is the Chairmen, and the deputies.
The Lieutenant Governor is appointed by the Kingdom of the Netherlands. The
deputies are appointed by the Island Council.
Economy
GDP – per capita: US$21,900 (2012)
Labour force:
9,383 (2012)
Unemployment: 5.8% (2012)
Currency (code):
United States dollar (USD)
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2 Business Entities and Accounting
The main company forms in Bonaire are the private limited company and the
public limited company. Other business forms include partnerships and sole
proprietorships. Foundations and private foundations are also available.
Most businesses in Bonaire require a business permit.
2.1 Companies
2.1.1 Private limited companies
A private limited company may be founded by one or more persons by notarial
deed. The company is a separate legal entity and has one or more registered
shares. The shareholders are not generally personally liable for the debts of the
company. However, the articles of association may provide that shareholders, or
a particular class of shareholders, are personally liable (whether or not jointly or
severally) for some or all of the company’s debts.
Private limited companies are administered by general meetings of the shareholders
and are managed by a management board. A supervisory board consisting of at least
one member (natural person/s) may also be appointed. The articles of association
may alternatively provide that the management of the company is undertaken by
a general board and an executive board. In such cases, the allocation of duties is
established by legislation, and no supervisory board is appointed. The articles of
association may provide that the company is a shareholder controlled company. In
such cases, the shareholders undertake the management of the company.
A private limited company may appoint an external expert to monitor the
company’s accounts.
2.1.2 Public limited companies
A public limited company may be founded by one or more persons by notarial
deed. The company is a separate legal entity and has one or more registered
or bearer shares. The shareholders are not generally personally liable for the
debts of the company.
Public limited companies are administered by general meetings of the
shareholders and are managed by a management board. The articles of
association may provide that the management of the company is undertaken by
a general board and an executive board. In such cases, the allocation of duties
is established by legislation. A supervisory board consisting of at least three
members (natural persons) may also be appointed.
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A public limited company may appoint an external expert to monitor the
company’s accounts. Large public companies (as defined) are required to
appoint an external expert.
2.1.3 Company names
and registration
The company name must include its organisational form or relevant abbreviation.
Companies must be registered with the Trade Register which is administered by
the Chamber of Commerce and Industry.
2.2 Partnerships
2.2.1 General partnerships
A general partnership may be formed by two or more partners. The partners are
jointly and severally liable to an unlimited extent for the debts and obligations of
the partnership.
General partnerships must be registered with the Trade Register which is
administered by the Chamber of Commerce and Industry.
2.2.2 Limited partnerships
A limited partnership may be formed by two or more partners. There must be at least
one general partner and at least one limited partner. General partners are jointly and
severally liable to an unlimited extent for the debts and obligations of the partnership.
The liability of limited partners is generally limited to their contribution. Limited
partners may not take part in the management of the partnership; if they do so, they
become jointly and severally liable for the debts and obligations of the partnership.
Limited partnerships must be registered with the Trade Register which is
administered by the Chamber of Commerce and Industry.
2.3 Foundations
A foundation may be established notarial deed. A foundation has no members
or shareholders and is established in order to achieve a specified objective. A
foundation may not make distributions to the founders or to bodies of the foundation.
Distributions may be made to others for a philanthropic or social purpose.
A private foundation may be established notarial deed. A private foundation has
no members or shareholders and is established in order to achieve a specified
objective. A private foundation may make distributions to its founders. The
objective of a private foundation may not include conducting a business.
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2.4 Sole Proprietorships
An individual may generally undertake business activities in Bonaire as a sole
proprietorship. The individual owner is liable for the debts and obligations of the
business with all of their assets.
Sole proprietorships are required to be registered with the Trade Register which
is administered by the Chamber of Commerce and Industry.
2.5 Audit and Accounting
Requirements
Companies are required to prepare annual accounts within eight months after
the end of the financial year (this period may be extended by up to six months
by the general meeting in special circumstances). The annual accounts must
include a balance sheet, income statement, and document explanations. Large
public companies (as defined) are required to prepare annual accounts and
an annual report within six months after the end of the financial year (this
period may be extended by up to six months by the general meeting in special
circumstances). The annual report is required to provide a true and fair view of
the situation of the company on the balance sheet date and the state of affairs
of the company and of any subsidiaries included in the accounts. Large public
companies are required to have their annual accounts audited by the appointed
external expert.
Annual accounts must be prepared in accordance with generally accepted
accounting principles. Large public companies are required to prepare their
accounts in accordance with the standards established by the International
Accounting Standards Board (IASB) or in accordance with other internationally
recognised standards if appropriate.
Accounting books and records must be kept for a period of at least 10 years.
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2.6 Filing Requirements
Companies are required to file copies of their annual accounts (certified by the
director) with the tax authority within nine months after the end of the financial
year.
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3 Finance and Investment
3.1 Exchange Control
Persons who enter or leave Bonaire carrying with them money which is
worth the equivalent of USD10,000 or more are required to make a customs
declaration.
Anti-money laundering legislation contains customer due diligence requirements
and unusual transaction reporting requirements. Unusual transactions must be
reported to the Financial Intelligence Unit of the Netherlands (FIU-Netherlands).
3.2 Banking and Sources
of Finance
The De Nederlandsche Bank (DNB) is responsible for financial stability,
payments systems, and supervising financial institutions and the financial sector.
Commercial banks operating in Bonaire provide the majority of financial services.
There are generally no restrictions on foreigners opening bank accounts in
Bonaire (certain documentation and a minimum deposit may be required), or on
accounts containing certain foreign currencies.
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Bonaire
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3.3 Investment Incentives
and Restrictions
For business related incentives, see 5.7.
There are generally no restrictions on foreign business investment in Bonaire.
However, investments in certain sectors, such as banking and other financial
services, may require authorisation.
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4 Employment Regulations
For employment tax considerations, see 5.3.
4.1 General Employment
Matters
4.1.1 National employment standards
Legislation provides minimum rights and conditions of employment in Bonaire,
including maximum daily and weekly working hours, rest periods, paid annual
leave entitlement, paid public holiday entitlement, and maternity leave rights.
The employer and employee may agree to a probationary period of employment.
The agreement must be in writing and the probationary period may not exceed
two months in duration. Either party may terminate the contract of employment
without notice during the probationary period.
The notice period required by an employer to terminate a contract of employment
varies depending on the employee’s length of employment. For employees, the
notice period required is one month. Either party may terminate the contract
of employment without notice. In such cases, the terminating party is liable to
pay damages unless the termination is for an urgent reason. For an employer,
an urgent reason may relate to the characteristics or behaviour of the employee
which means that the employer cannot reasonably allow the employment to
continue. For an employee, an urgent reason arises in circumstances where the
employee cannot reasonably be expected to continue the employment.
The hourly minimum wage in Bonaire is USD4.70.
4.1.2 Pensions and other benefits
Social security contributions (see 5.3.2) generally provide associated benefits.
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4.2 Visas
Citizens of certain countries (including European Union member states and the
United States) do not generally require a visa to visit Bonaire. Citizens of other
countries require a Caribbean visa which permits entry into Aruba, Curaçao,
St Maarten, and the Caribbean Netherlands (Bonaire, St Eustatius and Saba),
unless the visa is territorially limited.
Foreign individuals wishing to live in Bonaire require a residence permit. Foreign
individuals wishing to work in Bonaire require a work permit.
There are generally no restrictions on foreigners purchasing real property in
Bonaire.
4.3 Trade Unions
One or more employees’ associations may negotiate and conclude collective
agreements with one or more employers.
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5 Taxation
Facts and figures as presented in section 5 are correct as at 8 September 2015.
5.1 Corporate Income
Taxes
The tax legislation applicable in Bonaire also applies to St Eustatius and Saba,
known collectively as the BES islands.
An entity is considered to be resident in the BES islands if the inspector
determines (at the request of the entity) that one of the following sets of
conditions is satisfied:
• The annual turnover of the entity does not exceed USD80,000, the assets of
the entity do not typically exceed USD200,000, and the entity is not engaged
in financial services, royalty payments, insurance and reinsurance, or certain
other activities
• Typically no more than 50% the entity’s assets are made up of investments,
holdings, cash and assets which are made available to non-BES island
residents, and other assets that are used (whether directly or indirectly) for
financing non-BES island residents, or
• The entity (i) typically has at least three full-time permanent employees
who are BES-island resident individuals who are independently engaged in
activities relating to the assets mentioned in the second bullet point (above)
and the powers and responsibilities of the employees are in accordance with
the nature and functions of those activities, and (ii) has immovable property
(or part thereof) located in the BES islands which is worth more than
USD50,000 and has been held for a period of at least 24 months which is
available to be used for the entity’s operations, and the entity is engaged in
financial services, royalty payments, insurance and reinsurance, or certain
other activities.
Foundations established in the BES islands, and entities admitted to a trade and
service warehouse under legislation, are considered to be resident in the BES
islands without the requirement of a determination by the inspector. Entities with
at least a 95% participation in an entity which is admitted to a trade and service
warehouse under legislation may apply to the inspector for a determination that
the entity is a BES island resident.
BES island resident entities are generally subject to revenue tax and property
tax (see Other Taxes), subject to any effective agreements for the avoidance of
double taxation.
Other entities are considered to be resident in the Netherlands and are subject to
the Dutch corporate income tax and withholding tax.
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Revenue tax at the rate of 5% is generally levied on revenue distributed by
entities that are resident in the BES islands. Certain exemptions apply, including
an exemption for distributions made by a foundation if the distribution is a
benefit under a pension fund. The tax is collected by the distributing entity by
way of withholding. Revenue tax declarations must be made on a quarterly basis
and submitted to the tax authority (along with the withheld tax) within 15 days
after the end of each calendar quarter. A declaration is not required if there have
been no distributions in the calendar quarter.
5.2 Personal Taxes
The tax legislation applicable in Bonaire also applies to St Eustatius and Saba,
known collectively as the BES islands.
BES island resident individuals are generally subject to tax on their worldwide
income. Non-BES island resident individuals are generally subject to tax on their
BES island source income, subject to any effective agreements for the avoidance
of double taxation.
Individuals are subject to tax on their taxable income at the following rates
(subject to exemptions, deductions and allowances):
Taxable Income
Up to USD274,150
Over USD274,150
Rate
30.4%
USD83,341, plus 35.4% on the excess
Profits from a substantial interest in a company (as defined) are subject to tax at
the rate of 5%.
Tax exempt income includes: gains from the disposal of property not used for
business or professional purposes, income gained by way of inheritance or
legacy, interest from savings up to a maximum of USD5,000 per year, and
dividends up to USD5,000 per year.
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5.3 Employment Related
Costs and Taxes
5.3.1 Fringe benefits
There is no separate fringe benefits tax. Unless specifically exempt, the taxable
value of benefits-in-kind form part of the taxable income of individuals and are
subject to personal income tax.
5.3.2 Social security costs
Employee social security contributions for the general retirement pension, general
widows/orphans insurance, and health insurance are generally included in the
30.4% personal income tax rate (see Personal Taxes).
Employers are generally required to make the following social security
contributions in respect of their employees:
Contribution Category
Health insurance
Health insurance (medical care)
Contribution Rate
1.6%
16.1%
Accident insurance
0.5%
Severance
0.2%
5.4 Withholding Taxes on
Payments Abroad
Revenue distributed by entities that are resident in the BES islands is generally
subject to revenue tax (see Corporate Income Taxes).
5.5 General
Expenditure Tax
General expenditure tax is generally levied on the supply of goods produced and
services provided in Bonaire, and on the importation of goods.
The standard general expenditure tax rate is 8%. A rate of 6% applies to supplies
of services, and a rate of 7% applies to insurance. The rate for passenger cars
(unless very economical, as defined) is 25%. A 0% rate applies to certain
supplies, including very economical passenger cars, and goods placed under a
customs regime. Certain supplies are exempt, including certain basic commodities,
public passenger transportation services by road, hospital and medical services,
certain medicines, utilities (water, electricity, and gas), life insurance/reinsurance
and health insurance/reinsurance, and transport by aircraft or ships.
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An entrepreneur may make a written request to the inspector to be exempt from
paying general expenditure tax. The request is granted if (i) the entrepreneur
is a natural person who is resident in a BES island, or is established or has a
permanent establishment in a BES island, and (ii) the entrepreneur can show
that their annual general expenditure tax revenue will not exceed USD20,000.
Traders can generally recover the general expenditure tax with which they
themselves are charged on their purchases of goods and services, subject to
conditions and possible exceptions.
5.6 Other Taxes
5.6.1 Transfer tax
Transfer tax is generally imposed on acquisitions of immovable property located
in the BES islands (and associated rights), and BES island registered ships if the
gross volume is at least 20 cubic metres, subject to exemptions. The tax rate is
5% of the greater of the fair market value of the immovable property or ship, or
the consideration paid.
5.6.2 Property tax
An annual property tax is generally imposed on profits from immovable property
located in the BES islands. The tax is levied on those that own, possess or have a
limited right over, property in the BES islands at the beginning of the calendar year.
Certain exemptions apply, including qualifying principal private residences. The
tax rate is 17.5% of the profit from the immovable property (10% for the hotels
of non-natural persons). The profit is fixed at 4% of the value (as defined) of the
property. For independent houses that are not dwellings, the 4% fixed rate applies
to the value of the property exceeding USD70,000. For time-share properties,
the profit is multiplied by a factor of use, which is the number of days that the
property may be used divided by the number of days in the calendar year.
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5.6.3 Excise taxes
Excise taxes are imposed on certain goods, including alcoholic products, tobacco
products, and gasoline.
5.6.4 Gaming tax
Gaming tax is generally levied on authorised domestic (BES island) gambling
operators, and on gambling prizes from domestic non-authorised gambling
operators or foreign gambling. The tax rate is 10%, and the tax base depends on
the type of activity. Prizes not exceeding USD600 are tax exempt.
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5.7 Tax Incentives
for Businesses
5.7.1 Bonded warehouse
Goods admitted into a bonded warehouse for re-export are exempt from general
expenditure tax and excise tax.
5.7.2 Property tax exemptions
If the value of immovable property subject to property tax is increased by way of
construction, alteration, improvement, demolition, or destruction, the increase in
value is exempt from property tax for a period of 10 years from the beginning of
the year in which the modification occurred.
Baker Tilly Bonaire
www.bakertillybonaire.com
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United Kingdom
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