Doing Business in
Bonaire
www.bakertillyinternational.com
Preface
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 156 firms in 131 countries and 26,000 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.
April 2013
Doing Business in
Bonaire
1
Contents
1 Fact Sheet 2
2 Business Entities and Accounting 2.1 Business Entities 2.2 Accounting Requirements 2.3 Filing Requirements 4
4
6
7
3 Finance and Investment 3.1 Exchange Control and Other Restrictions 3.2 Banking 8
8
8
4 Employment Regulations and Social Security 4.1 Residence and Work Permits 4.2 Employment 4.3 Social Security 10
10
10
11
5 Taxation 5.1 Personal Tax 5.2 Business Taxes 5.3 International Tax Provisions 12
12
14
15
2
1 Fact sheet
Geography
Location Bonaire is an island south of the Caribbean Sea
Area294km2
Land boundaries
None
Coastline Surrounded by the Caribbean Sea
ClimateTropical
Terrain Rocky, mixed volcanic and coral origin
Time zone GMT -4
People
NationalityDutch
Population Approximately 16,500 (2012)
Religion
Predominantly Christians (80%)
Language Dutch, Papiamentu
Government
Country name
The Kingdom of the Netherlands
Government type
The Kingdom of the Netherlands (the Kingdom) includes four countries: the
Netherlands (including Bonaire, Saba and St. Eustatius), Aruba, Curaçao and St.
Maarten. The Kingdom is a constitutional hereditary monarchy governed under a
parliamentary system.
Capital Amsterdam
Administrative divisions
Local Executive Council (Bestuurscollege)
Political situation On 10 October 2010, the former country the Netherlands Antilles ceased to
exist and the islands of Curaçao and St. Maarten became separate countries
within the Kingdom. Bonaire, St. Eustatius and Saba (together the so-called
BES Islands) acquired the status of extraordinary municipalities within the
Netherlands
Doing Business in
Bonaire
3
Economy (year 2011)
GDP – per capita US$42,700 (the Netherlands)
GDP – real growth rate
1.3% (the Netherlands)
Labour force
7,570
Unemployment 500
Currency (code)
United States Dollar (US$)
4
2 Business Entities and Accounting
2.1 Business Entities
The most popular types of business entities in Bonaire are the public or limited
liability companies.
2.1.1 Legal business entities
Bonaire corporate law is based on Dutch corporate law and basically recognises
two types of legal business entities:
• The public liability company (naamloze vennootschap or NV)
• The limited liability company (besloten vennootschap met beperkte
aansprakelijkheid or BV).
The BV and NV share many characteristics.
A legal business entity may be established and owned by one or more
shareholders, which may either be legal entities or individuals, residents or
non-residents. Incorporation is achieved by a notary deed; amendment of the
articles of association also requires such a deed. For non-residents it is possible
to incorporate a company by proxy. A company must be registered with the
Chamber of Commerce.
Under Bonaire corporate law, the management and supervision functions may be
separated between the executive board and the supervisory board – the “two-tier
system” – or be merged to form a single board – the “one-tier system”.
A legal business entity must have at least one managing director, which can
be another entity or a private person. At least one managing director must
be domiciled in Bonaire. Under certain circumstances it suffices to have a
local representative. The power and authority of the managing director(s) are
determined by law and the articles of association. Supervisory directors must be
private persons.
The capital of the legal business entity consists of at least one share with any
nominal value and voting power. Shares may be either bearer or registered
shares (under some circumstances restrictions regarding bearer shares apply)
and may vary in class, voting rights, participation in profit distributions and
rights to liquidation proceeds.
A large NV must publish audited financial statements in order to facilitate
inspection by third parties, such as creditors, employees or business partners.
A NV is classified as large based on the number of employees, the total balance
sheet value of assets and net turnover.
Doing Business in
Bonaire
5
The relevant differences between the Bonaire NV and BV are:
• The BV, irrespective of its size, is subject to less strict audit and publication
requirements
• The BV can, under certain conditions, obtain an exempt status for profit tax
purposes
• A BV may only issue registered shares.
2.1.2 Non-legal business entities
Doing business in Bonaire is also possible through several types of entities that
are not legal entities, such as:
• A sole proprietorship (eenmanszaak): this business entity is owned by one
individual. This individual is fully liable for all debts and no distinction is
made between the individual’s private and business debts. The individual is
subject to personal income tax on the profits of the sole proprietorship
• A private partnership (maatschap): this is a business entity commonly
used by a combination of two or more individuals or legal entities having
the same profession (eg doctors, lawyers, or accountants) and wishing to
operate under one business name. All individual partners are equally liable.
The partnership’s profit is allocated to each partner and subject to personal
income tax if the partner is an individual and subject to profit tax if the
partner is a legal entity
• A general partnership (vennootschap onder firma or VOF): this entity is set
up by a combination of two or more individuals or legal entities conducting
the same trade as “blue-collar” entrepreneurs (eg painters, carpenters, or
bakers) operating under one business name. All partners are jointly and
severally responsible and liable to other parties for the partnership’s debts.
The partnership’s profit is allocated to each partner and subject to personal
income tax if the partner is an individual and subject to profit tax if the
partner is a legal entity
• A limited partnership (commanditaire vennootschap or CV): this entity is
similar to a general partnership; however a distinction is made between
general (managing) partners and limited (dormant) partners. Provided limited
partners do not take part in the day-to-day business, their liability is limited
to their capital contribution. General partners are jointly and severally liable
for the partnership’s debts. The partnership’s profit is allocated to each
partner and subject to personal income tax if the partner is an individual and
subject to profit tax if the partner is a legal entity. A CV with capital divided
into shares is, however, subject to profit tax.
6
2.2 Accounting
Requirements
The accounting requirements as stipulated in Book 2 of Bonaire Civil Code are
compulsory for all legal entities.
2.2.1 General provisions on annual accounts
Legal entities are required to prepare financial statements that consist of at least
a balance sheet, a profit and loss statement and explanatory notes. The financial
statements should contain sufficient information in order to enable a reader to
form a reasonable opinion about a company’s financial position and results and,
within limits, its liquidity and solvency.
The law generally stipulates that financial statements must be prepared within
eight months of the financial year-end. The financial statements must comply
with generally accepted accounting principles. The law does not state which
principles are considered generally acceptable, but Dutch General Accepted
Accounting Principles are commonly used. In the case of an ordinary NV or
BV the general meeting of shareholders may extend the period to prepare the
financial statements by up to six months after the end of the preceding financial
year, in specified circumstances.
For large NVs the financial statements should be prepared within six months of
the financial year-end and must be prepared in accordance with International
Financial Reporting Standards (IFRS). Other international generally accepted
accounting principles may be permissible with valid reasons.
The financial statements should include a balanced and complete analysis,
corresponding to the size and complexity of the legal entity and its group
companies, of the situation at the balance sheet date, the developments during
the financial year and the results. If necessary for a proper understanding of the
developments, results or position of the legal entity and its group companies,
the analysis should comprise both financial and non-financial performance
indicators, including environmental and personnel issues.
2.2.2 Report of the directors
A large NV is required to include a report of the directors in the annual
accounts. This report must provide a true and fair view of the financial position
at the balance sheet date and the performance during the financial year. Any
stakeholder may demand that the company fulfils this obligation.
The Bonaire Civil Code stipulates that the report of the directors should provide
information on any event of material significance that occurs after the end of the
financial year. In addition, it must provide information on the expected future
performance and should not contradict the financial statements.
Doing Business in
Bonaire
7
2.2.3 Audit requirements
Large NVs are required by law to have their financial statements certified by
an external expert. For other entities the articles will establish whether the
financial statements must be audited. Generally speaking the general meeting is
authorised but not obliged to appoint an external expert. The law clearly defines
who is considered to be an external expert in the case of a large NV, namely a
registered accountant (RA), an accounting consultant (AA), a certified public
accountant (CPA), or an expert admitted by the Minister of Economic Affairs
based on their professional competence.
2.3 Filing Requirements
For NVs which are not classified as large and for BVs the individual shareholders
are entitled to inspect the financial statements during a period of two years after
preparation or adoption.
Large NVs are obliged to deposit a complete copy of the financial statements
at the registered office, within eight days of adoption by the shareholders in
general meeting, for inspection by stakeholders. If the financial statements have
not been adopted and approved within two months of the maximum period as
approved by the general meeting, the financial statements must be deposited
immediately after preparation for inspection by stakeholders. The trade register
of the Chamber of Commerce must be notified of the deposit of the financial
statements for inspection, if applicable, together with a statement stating that
the financial statements have not yet been adopted or approved.
8
3 Finance and Investment
3.1 Exchange Control and
Other Restrictions
On 1 January 2011 the US dollar became legal tender in Bonaire. Banks in
Bonaire dispense dollars through their ATMs and over the counter.
3.2 Banking
Bonaire’s banking system falls under the supervision of the Dutch Central
Bank (De Nederlandse Bank).
Doing Business in
Bonaire
9
10
4 Employment Regulations and Social
Security
4.1 Residence and Work
Permits
Every foreigner (excluding Dutch nationals) wishing to become a resident of
Bonaire requires a residence permit. A foreigner wishing to work in Bonaire
requires a work permit. In general a work permit is only granted when no
suitable qualified person is available on the Island. In other cases, if the
employer is willing to provide a guarantee in respect of related expenses and
responsibilities, a request for a work permit will be considered. Holders of a
Dutch passport do not require a work permit.
4.2 Employment
Employment contracts may be concluded for an indefinite term, a definite term,
or for a specific project. Consecutive temporary contracts (the maximum duration
of each contract is one year) are permitted for three periods. Contracts are
considered to be consecutive if interruptions between contracts do not exceed
three months. If the total period of consecutive temporary contracts exceeds
three years, the contract is, by law, converted into a contract for an indefinite
term.
An indefinite term contract may only be terminated, without penalty, for material
breach. The dismissed employee is often entitled to severance pay.
Doing Business in
Bonaire
11
4.3 Social Security
A number of institutions in Bonaire are responsible for the application of several
social security laws. In general, social security premiums are withheld and paid
over by the employer. Contributions may be due in respect of:
• Old age pension (AOV): a compulsory insurance against the financial
consequences of old age for the entire population, on account of which the
insured person receives an old age pension on reaching 65 years of age
• Widow’s, widower’s and orphan’s pension (AWW): a general insurance
guaranteeing financial support to the widow or widower after the passing
away of a spouse and to children generally up to the age of 15, upon the
death of an insured mother or father
• General healthcare (zorgverzekering): all residents of Bonaire are by law
insured for healthcare
• Sickness insurance (ZV): insures employees with an income under a certain
threshold for the costs of medical care and loss of income as a consequence
of sickness
• Accident insurance (OV): obliges employers to insure their employees for the
costs of medical care and loss of income as a consequence of an accident at
work
• Cessantia: a severance payment that insures employees against the costs of
unemployment through no fault of their own. It grants the employee the right
to a lump sum payment dependent on the duration of the employment and
the most recently received wage.
12
5 Taxation
5.1 Personal Tax
Residents of Bonaire are subject to income tax on their worldwide income.
Non-residents are subject to Bonaire income tax on certain income, such as
income from an enterprise carried on in Bonaire.
Resident taxpayers are taxed on their taxable income, defined as income less
deductible costs, minus losses brought forward. Income is defined as the results
derived from capital (not real estate) employed, entrepreneurship and labour and
entitlements to periodic payments. Deductible costs are divided into personal
burdens and extraordinary burdens.
Non-resident taxpayers are, in principle, taxed in the same way as resident
taxpayers, however certain restrictions apply.
The income tax rate (including employee’s social security premiums) is
progressive with a rising scale with two brackets ranging from 30.4% - 35.4%.
For 2013 these figures are as follows.
Income from (US$)
Not more than (US$)
%
0
263,250
30.4
263,250
Unlimited
35.4
Income tax returns should be filed within 60 days after the date stipulated
on the income tax return-form. It is possible to request an extension, which is
limited to 18 months after the end of the tax year concerned.
Wage tax
Wage tax is a pre-levy of income tax and withheld by the entity that paying the
income arising from current or former employment, generally the employer or a
pension insurer.
Quarterly wage tax returns should be filed and the wage tax paid to the tax
authorities on or before the 15th day of the month following the quarter in which
the wages were paid. The employer is also obliged to file a summary wage tax
card (for the calendar year) with the tax authorities before 1 February of the
following calendar year.
Doing Business in
Bonaire
13
Expatriate facility
Under the expatriate facility, an employee may enter into a net salary
arrangement with their employer whereby the gross salary is paid as net salary
and the employer accounts for the wage tax.
In general, the term “wages” includes all benefits received from employment
such as salary, allowances, remuneration in kind such as a car or living
accommodation. For the purposes of the expatriate scheme, the following fees
are not treated as wages:
• Benefits in kind (for example, car or living accommodation) to a maximum of
US$8,380 per year
• Fees for child education (conditions apply if the child is educated abroad),
per child for up to US$13,967 per year
• Compensation to cover the travel expenses associated with the arrival and
repatriation of the employee and their family up to US$2,235 (single),
US$4,470 (couple without children), or US$6,704 (couple with children)
• Compensation for hotel expenses in Bonaire for up to two months, with a
maximum of US$5,587 (single), US$8,380 (couple without children), or
US$11,732 (couple with children)
• Refurbishment allowance of up to two months’ salary but with a maximum of
US$6,704
• Reimbursement of car rental expenses during the first two months, with a
maximum of US$1,509 per month.
An individual is eligible for the expatriate regime if they lived abroad for an
uninterrupted period of five years or more prior to employment in Bonaire.
Furthermore, they must possess “specific expertise” which is either not available
or is scarce in the local labour market.
“Specific expertise” is demonstrated as follows:
• The employee has an academic or higher vocational training
• The employee has at least five years’ relevant work experience
• The employee receives a remuneration of at least US$83,500 per year.
The expatriate status is only available on request. The request must be made
by the employer, countersigned by the employee and be submitted to the tax
authorities of Bonaire. The expatriate status will, in principle, be granted for a
maximum period of five years, however, subject to conditions, this period may be
extended for a further period of up to five years.
14
5.2 Business Tax
Bonaire companies are subject to regular Dutch corporate income tax
(vennootschapsbelasting; please see the Doing Business in the Netherlands
guide for details) unless they have a so-called declaration of establishment in
Bonaire (vestigingsplaatsbeschikking). For such a declaration to apply, the
company should meet the activity test. The activity test is met if a company is an
active company, ie a company for which that total of investments, participations,
liquid assets, or other assets the use of which are transferred to a person outside
Bonaire accounts for less than 50% of total assets. If the company does not
comply with the activity test it may still qualify for the declaration and become
subject to Bonaire tax if, in summary, (i) the amount of turnover is not more
than US$80,000 and the value of assets is not more than US$200,000, or (ii)
the number of fulltime employees of the company is at least three and it has
access to local real estate with a value of US$50,000 for a period of at least 24
months.
Bonaire does not levy a regular corporate income tax. Instead Bonaire has a so
called revenue tax (opbrengstbelasting).
5.2.1 Revenue tax
For revenue tax purposes, revenues are payments made by legal entities and
foundations. Revenue includes dividend distributions.
The revenue tax rate is 5%. The recipient of the revenue is subject to revenue
tax, however the payer must withhold and pay the tax. For each payment
of revenue the payer must issue a note, containing the name and address
information of both the payer of the revenue and the recipient. The withholding
entity (payer) must declare the revenue tax due on a quarterly basis and must
pay the revenue tax within 15 days of the end of the quarter.
Although there is no corporate income tax in Bonaire, legal entities must send
a copy of their annual financial statements to the tax authorities within nine
months of the end of the financial year. The financial statements should consist
of a balance sheet, profit and loss account and explanatory notes.
Doing Business in
Bonaire
15
5.2.2 Turnover tax
Turnover tax is levied on entrepreneurs in Bonaire. Any person who exploits an
asset (such as real estate or intellectual property rights) will under conditions
also be considered an entrepreneur for turnover tax purposes. Turnover tax is
levied on the sale of goods, the rendering of services and the import of goods.
The applicable tax rate varies from 4%1 up to 30%.
Quarterly turnover tax returns should be filed and the tax due should be paid on
or before the 15th day of the month following the quarter to which the turnover
relates.
5.2.3 Withholding taxes
Bonaire does not levy a withholding tax on dividends or royalty payments.
Although Bonaire is not part of the European Union (EU), it has committed itself
to the enactment of the EU Savings Directive. Interest payments to residents
of EU member states are subject to withholding tax, unless the EU recipient
requests to be exempted; in that case an exchange of information will occur
and no taxes will be withheld. For non-EU residents, no interest withholding tax
applies.
5.3 International Tax
Provisions
5.3.1 Tax treaties
Bonaire has double taxation agreements with Norway, the Netherlands, Curaçao
Aruba and St. Maarten.
Bonaire has tax information exchange agreements with Antigua and Barbuda,
Australia, British Virgin Islands, Bermuda, Canada, Cayman Islands, Denmark,
Faroe Islands, Finland, France, Greenland, Iceland, Mexico, New Zealand, Spain,
St. Lucia, St. Kitts and Nevis, San Marino, Sweden, United Kingdom and the
United States.
1
0% for certain goods exported or clean cars imported.
16
Member Firm Contact Details
Baker Tilly Bonaire
Bulevar Gob. N. Debrot 31
Kralendijk
Bonaire
T: + 599 717 4168
www.bakertillybonaire.com
Contacts:
Eric Vesseur – audit
Arthur van Aalst – tax
Danny Bol – business support
Doing Business in
Bonaire
17
Global Office
25 Farringdon Street
London EC4A 4AB
United Kingdom
T: +44 (0)20 3201 8800
F: +44 (0)20 3201 8801
[email protected]
www.bakertillyinternational.com
Baker Tilly is the trademark of the UK firm, Baker Tilly UK Group LLP, used under licence.
Like us on Facebook
© 2013 Baker Tilly International Limited, all rights reserved
Join our group