Frequently Asked Questions
Information
General information
First of all, before buying property on Curaçao, we generally recommend an official property appraisal or a technical/contructional analysis by a construction expert.
Regarding the buying process it is important to know whether you decide to apply for a local mortgage, since the mortgage application process is a bit more extensive for non-residents and takes time. Sometimes the seller prefers a pre-approval from the bank before the bid or the purchase agreement.
Once there is agreement on a price, we will make a copy of your passport and verify your home address. The purchase agreement will then be provided to you. The buyer, provided he/she is a private person, has the right to annul the purchase within 3 days after signing the agreement, without explanation.
Buyers make payment in escrow of notary
To solidify your intent to buy, a deposit on the property is required, usually 10% of the purchase price. This payment is always made to the notary’s escrow account.
If applicable: Buyers apply for a mortgage
This step is streamlined if you’ve already been preapproved for a loan (which is a smart thing to do because it takes time). If not, you’ll begin the loan application process now. A time span indication is approx. six weeks from application for a local mortgage, and a minimum of 30% of private capital for residents, up to 50% for non-residents.
Closing time arrives
Once financing is set and contingencies are removed, all parties sign the deed of transfer at the notary’s office, and the transaction closes. If parties are not on the island for the signing, they can give power of attorney to the notary’s office or the broker. A time span indication is approx. one month for the Notary for doing their research, calculated from the date of receipt of the dossier to the actual transfer date.
Ownership and mortgages are registered by law in the cadastre, the Land Registry Office (“Kadaster“) to protect legal certainty on property and rights.
Applicable taxes and fees:
- Transfer tax: 4 % of purchase price – not for “SPF” (Private Foundation)
- Registry fees & stamps:
o transfer of property (average Naf 910),
o mortgage deeds (minimum of Naf 725 + an additional Naf 100 per Naf 100.000 above Naf 200.000 of Founder value, this is maximized however)
- Seal of debt (in case of mortgage): 2 ‰ of purchase price
- Annual property tax (land & building(s) based on “Founder value” of selling price (the higher of the two:
o 0,4 ‰ < 350.000 Naf
o 0,5 ‰ >< 350.000 – 750.000 Naf
o 0,6 ‰ > 750.000 Naf
(in case of leasehold land different rules apply, and only for building(s))
Notarial fees for transfers of property and mortgage deeds are fixed rates (excl. 6 % VAT) determined by the Common Court of Justice.
See also:
https://www.burgersfungaloi.com/onroerend-goed/koop-en-overdracht-van-onroerende-zaken/ (in Dutch)
Applying for a residence permit as an investor, length of stay and invested amount are connected; the higher the investment the longer the period the permit may be granted:
o Investment > ANG 500.000 -> permit for 3 years
o Investment > ANG 750.000 -> permit for 5 years
o Investment > ANG 1.500.000 -> indefinite permit
Investors’ permit costs are between ANG 1.865 up to ANG 6.170 and can be renewed for the same period as long as circumstances have remained unchanged.
An investor’s permit is not a work permit! For questions about opening (and working in) your own business on the Island, always check the applicable regulations with the Immigration Dept.
Please contact the Immigration Dept. and/or Dos Mundos for the latest and most accurate information:
Immigration Dept. “Toelatingsorganisatie”
Investors’ permit (in Dutch and Papiamentu)
Address: Prinsenstraat 90 (close to MacDonalds and Pietermaai Parking) – Punda – Willemstad
Phone: (+5999) 7332000
Email: [email protected]
(opening hours mon-thur 08.00 – 15.00 hrs, fri 08.00 – 14.00 hrs)
Dos Mundos immigration/emigration services:
Address: Saliña Galleries A-101 – Saliña – Willemstad
Phone: (+5999) 7872323
Email : [email protected]
PDF file: Investor’s permit Request form (June 2018)
Required documents accompanying above mentioned Investor’s permit Request form:
- Fully filled out & signed Investor’s permit Request form;
- Proof of payment legal fees & dues per applicant, per time period requested, from Girobank;
- Fully filled out, motivated & signed (temporary) residency request form;
- Copy valid passport;
- Passport photos (4x) conform passport standards (size 35mm x 45mm);
- Original birth certificate for review (< 1 yr old);
- Original Certificate of Good Conduct issued at last place of residence (< 3 months);
- Proof of valid medical insurance;
- Bank statement demonstrating the investment made.
- Dutch and US citizens are allowed to stay on the Island in total max. 6 months per calendar year without applying for a residential permit.
- EU-citizens (e.g. Germans, Austrians, Belgians etc.) are allowed to stay on the Island on a tourist visum max. 3 months per calendar year
- Others (e.g. Colombians, Ukrainians etc.) are allowed to stay on the Island on a tourist visum max. 1 month per calendar year
http://www.gobiernu.cw/nl/toelatingsorganisatie-curacao/formulieren/van-rechtswege-verklaring/
Dutch citizens can apply for their “Verklaring van Rechtswege” here:
https://www.immigrationcur.org/MPS/Klantenportaal/Toelatingsorganisatie_NL?init=true
(Fill out the “Toelatingscheck” before starting the application process.)
Please contact the Immigration Dept. and/or Dos Mundos for the latest and most accurate information:
Immigration Dept. “Toelatingsorganisatie”
Address: Prinsenstraat 90 (close to MacDonalds and Pietermaai Parking) – Punda – Willemstad
Phone: (+5999) 7332000
Email: [email protected]
(opening hours mon-thur 08.00 – 15.00 hrs, fri 08.00 – 14.00 hrs)
I for all immigration/emigration services
Phone: (+5999) 513 3011
Email: [email protected]
Website: https://iforallcuracao.com/
Dos Mundos immigration/emigration services:
Address: Saliña Galleries A-101 – Saliña – Willemstad
Phone: (+5999) 7872323
Email : [email protected]
Website: www.dosmundos.cw
In (ultra) short: are you over 50 years old and does paying (roughly) 10% tax on Curaçao over your “world income” sound appealing to you? Pls seek advice from a tax advisor if this could be interesting for you. You can contact me for details of recommended professionals. In Dutch a brief excerpt from PricewaterHouse Coopers Curaçao (now: Grant Thornton).
Residency is obligatory, you must be able to prove really living on the Island.
When buying property that is owned by a private foundation, the foundation itself can be taken over, thus avoiding transfer tax. This is in some cases particularly interesting for residents of Curacao.
More information in Dutch by Fung-A-Loi & Samander Notarissen.
One of the most under-utilized, but incredibly advantageous, investment strategies for real estate is using a self-directed individual retirement account (SDIRA). An SDIRA is an individual retirement account (IRA) in which the investor is in charge of making all the investment decisions. A SDIRA differs from a traditionally managed IRA in a way that you, the IRA-holder, have more control over how your funds are invested.
Investing in real estate in Curaçao using a SDIRA involves three simple steps:
- Identify your investment and request funds
Start by contacting a SDIRA custodian and they will help you release the funds and set up your account.
Then, identify the property/investment you wish to purchase, and gather all key documents related to the sale and transfer of the investment.
All documents related to the investment must be titled in the name of your IRA, not in your name. - Process the investment
The IRA custodian you choose will review and process your forms. If everything is correct and approved, the funds will be sent from your IRA for the investment based on your specifications. - Manage and sell the investment
Once your IRA owns the investment, all expenses and profits related to the investment must come from and back to the IRA.
When you are ready, instruct your custodian to sell the investment on behalf of your IRA. Funds from the sale of the investment return to your SDIRA tax-free, where you can continue to re-invest them as you see fit.
Utilizing SDIRA’s for tax-free real estate investments is just one of many topics that your RE/MAX BonBini agent can assist you with.
If you are looking for the perfect property in Curaçao and want to learn how to truly maximize your investment, do contact me.
What is compliance?
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 with headquarters in Paris, France.
The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is, therefore, a “policy-making body” which works to generate the necessary legislative and regulatory reforms in these areas.
In recent years, the government and financial regulators have imposed more and more rules on financial institutions. In this way, they hope to promote the integrity of the financial system and to prevent new financial scandals. For example, there is legislation on the prevention of fraud, inside information, and money laundering and terrorist financing.
What about in Curacao?
Compliance is still in its infancy in Curacao. Especially compared to other countries. For example, the United States and the United Kingdom introduced regulations for the financial sector at the beginning of the last century. In the Netherlands and in Curacao, people started to work on ‘compliance’ legislation only after 1990.
Compliance has received increasing attention in recent years. Partly due to the embedding of European directives in national legislation, the number of obligations also increased sharply for Curacao. That is increasing the need for compliance. Only a few real estate agencies work according to all compliance guidelines in force on Curaçao.
Countries that are members of (member of) the FATF make their own laws. National Ordinance Reporting Point Unusual Transactions‘ (MOT) and ‘National Ordinance Identification for Services‘ (LID) are the laws for compliance of curaçao.
The Financial Investigation Unit (FIU) Curacao is a supervisor and checks whether brokers comply with the rules of these laws. These FIU laws have been in force since 2010 and have been further tightened in 2016.
FIU legislation for compliance is dynamic legislation; sanction lists are adjusted. For example, it may be forbidden for brokers to do business with people from certain countries. Such a ban can be withdrawn later when the situation changes. It is therefore important for brokers to keep up to date with the latest rules. This is why a number of real estate agencies work with training companies and/or appointed ‘compliance officers’.
Several brokers are members of the National Working Group of National Risk Assessment (NRA). The NRA is a forerunner of the audit that the World Bank will do in Curacao in the year 2022. The working group determines the current level of compliance and whether there are opportunities to do this better in the future.
More info about the NRA in this news article from The Curacao Chronicle.
FIU can conduct research into persons or companies if there is a reason to do so. FIU may also impose administrative fines on its own when a broker or other service providers do not comply with the laws. If there is a crime (for example, money laundering), the case is referred to the public prosecutor.
It is very important for a country like Curacao that service providers adhere to the international standard (legislation). In this way, we escape the image that Curacao is an island ‘where everything is possible’.
Does it also apply to European Dutch?
We notice that our American and Canadian customers are familiar with such compliance rules but that many European customers wonder why they should give so much information when they want to buy or sell a house on Curacao. After all, this is not necessary when they are involved in a real estate transaction in the Netherlands.
The rules on Curacao apply only to non-residents. In the Netherlands this is the same: the compliance rules do not apply to people who live in the Netherlands. After all, all sorts of information about its inhabitants is known to the municipality/tax authorities/government in the Netherlands. But if the customer comes from abroad, it is necessary to request more information about this customer when he wants to buy/sell a property.
What information and what is done with it?
In addition to a copy of a legalized passport and an extract from the birth register (both can be done via the municipality), buyers must also complete and sign a ‘source of wealth declaration’. This statement is accompanied by attachments, such as a salary slip or a copy of a bank or savings account statement, to the broker.
With this information, nothing is done in most cases. Only when there appears to be an unusual transaction, the name of the customer is passed on to the FIU. The FIU can then decide for themselves whether or not they wish to investigate further.
Brokers do not decide for themselves whether a transaction is unusual or not. This is done by the ‘compliance officer’, on the basis of rules drawn up for this purpose.
To summarize:
The legislator requires that real estate agents know their customers and that they do research on this. For the time being, only a few real estate agencies on Curacao comply with all the rules of this legislation.
When you want to sell a house through our office as a customer, you can be confident that we have a good understanding of the customer. That way you also keep out people with bad intentions.
For people who want to buy a house, it may be a little difficult to provide extra information, but everyone has to contribute to achieving FATF’s goals. This way we make Curacao and the world a better and safer place to live in.
Should you have any further questions about the FIU legislation on Curacao after reading this information, please send an e-mail to [email protected].
See also information from Fung-A-Loi & Samander Notarissen (in Dutch).
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