Invest Wisely in Historic Willemstad: Discover the Tax Benefits
Curaçao is known not only for its beautiful beaches and crystal-clear waters, but also for its distinctive historic capital, Willemstad. Recognised by UNESCO as a World Heritage Site, the city is renowned for its colourful buildings and rich cultural heritage. Investing in this unique location offers attractive business opportunities as well as special tax benefits that can significantly increase your returns.
Tax Benefits for Monuments in Willemstad
The Government of Curaçao values investment that helps preserve Willemstad as cultural heritage. Attractive tax arrangements have therefore been introduced specifically for individuals and businesses investing in registered monuments and buildings within the historic urban area.
Financing Monuments: Tax-Exempt Income
When you provide financing for the purchase or renovation of protected monuments, income from interest and other returns is fully exempt from tax. This applies to both individual investors and businesses, significantly increasing returns and making investment more attractive.
Lower Acquisition Costs
Property purchases in Curaçao normally attract 4% transfer tax and, where applicable, an additional 6% turnover tax. When purchasing a protected monument, however, both transfer tax and turnover tax are fully exempt. Mortgage deeds are also exempt from stamp duty, significantly reducing your initial costs.
Tax Benefits for Private Owners
As a private owner, you can deduct maintenance costs for your protected monument in your income tax return, provided the property is your primary residence. Are you aged 50 or over and interested in the “penshonado” regime? A monument offers advantages here too: you can benefit from tax arrangements if your monument is worth at least XCG 450,000, even when you rent it out for up to four months a year.
Tax Benefits for Businesses
Additional favourable arrangements encourage businesses to invest in monuments. If you invest more than XCG 5,000 a year in the maintenance or improvement of a protected monument, you can claim an increased investment deduction of 30%, rather than the standard 10%.
A special investment deduction of 20% also applies to residential properties in which a business is established. This can substantially reduce your effective tax burden.
Tax Holiday: Exceptional Tax Benefits for Major Projects
Are you planning a larger investment project in Willemstad of at least XCG 5,000,000? You may qualify for a “Tax Holiday”. This package offers:
- Exemption from property tax for five years.
- A substantially reduced profit tax rate of just 3% for five years.
- Exemption from import duties on building materials for five years.
- Exemption from income tax on dividends generated by the project.
For investments exceeding XCG 10,000,000, these benefits apply for a longer period.
The Right Tax Strategy Increases Your Returns
In addition to these attractive tax arrangements, a sound tax strategy can further increase your returns. Seeking advice from a specialist tax adviser beforehand helps you structure your investments effectively and make the most of the available tax benefits.
Equilibrium Tax Solutions
This information is provided by Laetitia Wall, tax adviser and founder of Equilibrium Tax Solutions. This specialist tax consultancy provides high-quality tax advice and compliance services to local and international investors and entrepreneurs.
Would you like to learn more about the opportunities for your investment? Contact Laetitia Wall:
- Margrietlaan 9, Willemstad, Curaçao
- Telephone: +5999 5173434
- Email: [email protected]
“Invest wisely in Willemstad: discover how to make the most of tax benefits. Let Laetitia Wall guide you towards the best possible tax outcomes!”