THE DUTCH CARIBBEAN: An introduction
The Dutch Caribbean consists of the autonomous countries of Aruba, Curaçao and Sint Maarten within the Kingdom of the Netherlands and the public entities (comparable with municipalities) of Bonaire, Sint Eustatius and Saba that are part of the Netherlands. After the reformation of the Kingdom of the Netherlands in 2010, Curaçao and Sint Maarten applied for a similar status to that which the country of Aruba already had since 1986 and have become more independent as autonomous countries, while Bonaire, Sint Eustatius and Saba (the so-called BES-islands) have decided to become part of The Netherlands.
This structure provides for a diverse legal framework that, although based on the same basic principles within the Kingdom of the Netherlands, differs (sometimes significantly) between all countries/public entities within the Dutch Caribbean.
Administration of justice in the Dutch Caribbean is provided for by the common court of justice with its main office on Curaçao, with further offices on Bonaire, Aruba and Sint Maarten. This court is the competent court in first instance and appeal. Higher appeal is processed by the Supreme Court in The Hague (the Netherlands). This system is independent and of good quality.
The islands of the Dutch Caribbean are small island economies with a strong international orientation towards the United States and Europe, but also South America. The islands are self-sufficient in terms of the supply of energy and drinking water and are further developing towards a sustainable production of electricity by solar and wind.
The economies are mainly driven by tourism, logistics, international financial services and activities in the oil and gas sector. Curaçao and Aruba have oil storage and petrochemical refining capabilities available and the refineries form an important part of the economy. Both refineries have experienced a shutdown and are currently in the process of selecting a new operator in order to restart the processes in an environmentally responsible manner. Bonaire and Sint Eustatius have large oil and other fuel storage capacity available in two terminals. Although the terminal on Bonaire is not operational due to environmental constraints, the terminal on Sint Eustatius operates and provides a regional hub for the storage and transport of oil products.
The COVID-19 pandemic seriously impacted the tourism sector and the Netherlands provided financial support.
Aruba, Curaçao and Sint Maarten are constitutional parliamentary democracies. The BES-islands are public entities that have limited legislative powers that are attributed to the respective island councils. The island councils are elected by the inhabitants of each public entity.
From a legal point of view, Aruba, Curaçao and Sint Maarten have the autonomy to institute their own legal framework, provided this complies with Charter for the Kingdom of the Netherlands (and also international obligations originating from treaties etc.).
With regard to the BES-islands, legislation that applies in the Netherlands does not automatically apply, unless it is specified that this legislation applies. The Netherlands is authorized to introduce specific legislation for the BES-islands and consults the local government in order to make sure this legislation meets the specific requirements of the small island economies.
The Dutch Caribbean are not a part of the European Union, but are associated with the EU as Overseas Countries and Territories (OCT). Therefore, European directives and legislation do not apply. This may change if countries or entities in the Dutch Caribbean would apply to be considered Outermost Regions (OMR).
As OCTs, the Dutch Caribbean may benefit from this ‘associated’ status based on the Lisbon Treaty, which results in entitlement to participation in development programs and the availability of subsidies.
Developments and opportunities
The United Nations’ Sustainable Development Goals (SDG) provide a framework that has been adapted by the Dutch Caribbean. This has resulted in many initiatives with a focus on environmental preservation and economic growth. Recent developments that will impact this year are highlighted below.
Curaçao and Aruba have recently introduced a revised civil code on corporate law and corporate governance. The changes include amongst others the abolition of bearer shares, extension of the liability regime not only for directors but also for all supervisors, the requirement of private foundations to maintain a register of beneficiaries and extension of manners to issue and transfer shares. This may require local legal entities to amend their articles of association.
Curaçao has and Aruba is in the process of adapting rules and regulations regarding competition. These regulations will result in transactions becoming subject to supervision and/or approval.
Although the BES-islands are the forerunner on environmental legislation in the Dutch Caribbean, the environmental concepts and norms are also applied on the other islands. This results in existing and future industrial facilities being obliged to take measures (and execute investments) to comply.
Mergers and acquisitions
Mergers and acquisitions have taken place mainly in the communications and utilities sector. The trend is realizing economies of scale and a diminishing influence of (former) government shareholders.
As the density of economic operations increases and the population of the islands grows, governments of the islands are further developing and introducing spatial planning regulations that also have an effect for existing development possibilities.
More and more local and international parties list securities (debt and equity) on the Dutch Caribbean Securities Exchange (DCSX) in Curaçao. DCSX operates under a well functioning yet practical supervisory environment and has developed into a small, stable and profitable exchange over the last 10 years. DCSX is ambitious to become the main securities exchange in the region.
The small island economies of Aruba, Curaçao, Sint Maarten and the BES-islands provide a diversified legal framework and opportunities, especially in the oil and gas sector and in the corporate restructuring of new and existing tourism related ventures.
The economic activity takes place in a setting where legal, political and social considerations and stakeholders are intertwined. This requires a good understanding of local circumstances, but can provide many opportunities for local and foreign investors.