Legal Blog

Wednesday, July 23, 2014

Central Bank released Policy Memorandum Segregated Trust Company

The Central Bank of Curaçao and Sint Maarten recently released the “Policy Memorandum Segregated Trust Company”.

On 1 January 2012 as far as Curaçao is concerned and 1 April 2014 as far as Sint Maarten is concerned, new legislation entered into force according to which it is possible to set up a trust (a Curaçao Trust or a Sint Maarten Trust) similar to the trust in Anglo-Saxon common law jurisdictions. Such a Trust can be used for different purposes, including a Segregated Trust Company (a.k.a. protected cell company).

The Curaçao or Sint Maarten Trust is a legal relationship instituted by means of a trust deed pursuant to which assets are or will be brought under the control of a trustee for the benefit of one or more beneficiaries or a certain purpose. The assets brought into the trust are segregated from the assets of the trustee. The beneficiary of a Curaçao or Sint Maarten Trust holds equitable title to the assets while the trustee holds legal title to the assets.

For instance, one can incorporate a limited liability company (NV or BV) and organize it as a segregated trust company in which separate trust cells are created for the purpose of legally segregating and protecting the trust cell assets and liabilities. Each individual trust cell will be a trust within the meaning of Title 6 of Book 3 of the Civil Code. The creation of a trust cell does not create, in respect of that trust cell, a legal person separate from the limited liability company mentioned. The limited liability company will act as trustee for each trust cell.

The main uses for a Segregated Trust Company are to structure (umbrella) investment funds, captive insurance funds, or to hold in each cell a property such as real estate, aircraft or vessels, or a certain (high-risk) part of a company.

The Central Bank’s policy memorandum describes the application procedure of the Segregated Trust Company and makes it possible to obtain an exemption in order for the Segregated Trust Company to become the trustee of two or more Curaçao Trusts within this legal entity.

We assist our clients in various areas of financial law, including establishing and structuring trusts and funds. For more information, or to discuss setting up a Segregated Trust Company, please feel free to send an email (.(JavaScript must be enabled to view this email address)).

My list of publications on this subject include:

  • The Curaçao Trust – a common law trust in a civil law jurisdiction – a comparison with the Curaçao Private Foundation, co-writer with Davina Mansur and Tamara Stienstra, published in Trust & Trustees (2012, Volume 18, July 2012)
  • Does the Curaçao Trust make the incorporation of a Protected (Trust) Cell Company possible?, published in Tijdschrift voor de Ondernemingsrechtpraktijk (TOP) (Number 4, June 2012, Pp. 154 - 158)
  • The Curaçao Trust in practice, co-writer with Davina Mansur, published in Weekblad voor Privaatrecht, Notariaat en Registratie (WPNR) (14 April 2012, Number 6926, Pp. 292 - 301)
  • Postscript to a response to The Curaçao Trust in practice, published in Weekblad voor Privaatrecht, Notariaat en Registratie (WPNR) (26 May 2012, Number 6932, Pp. 412 - 414)
  • The Dutch Caribbean – a new episode for offshore investments, co-writer with Jeroen Starreveld, published in Trust & Trustees (2011, Volume 17, Number 6, Pp. 581 – 585)

Filed under: Finance by Maike Bergervoet.

 

 


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