Fund Domiciles

Like other Caribbean domiciles The Netherlands Antilles provides a favourable tax, legal and regulatory climate for funds. (A tax-exempt vehicle is available for hedge funds, for example.) It also offers quick formation; it is OECD and FATF compliant etc. Curacao also has a relatively large funds administration industry.

But unlike other Caribbean domiciles: or indeed those elsewhere; this jurisdiction is Dutch run and therefore has a different legal structure from those with a connection to the UK. In 2003 the Netherlands Antilles passed the National Ordinance for the Supervision of Investment Institutions and Administrators (NOSIIA). The ordinance requires thorough supervision of funds domiciled in the Netherlands Antilles unless the fund qualifies for one of the exemptions available under the ordinance.

The ordinance and the supervision of funds provided for under it is based on Dutch regulations and is thus similar in scope and authority to the supervision of securities and investment vehicles in Holland as supervised by the Autoriteit Financiele Markten (the 'AFM'). The intention of the AFM is to rely on NOSIIA supervision effectively allowing supervised funds to be marketed in the Netherlands.

Also in 2003 the Netherlands Antilles took steps to raise its profile in the hedge fund industry. It formed an association called Curao Financial Services Association (CIFA). CIFA is seeking to promote the Netherlands Antilles as another alternative to Cayman and the other Caribbean domiciles for hedge funds and other similar products.