The island’s government has expressed interest in developing blockchain technologies and fintech innovations, suggesting that future regulation may be more favorable to crypto businesses. Thus, as of now, Curaçao has not yet adopted formal cryptocurrency regulations, but it has shown signs of becoming more crypto-friendly. The Central Bank of Curaçao and Sint Maarten (CBCS) has acknowledged the potential of cryptocurrencies, but has also emphasized the need for caution due to risks like money laundering, fraud, and volatility.

To stay in line with international standards and recommendations of the Financial Action Task Force (FATF), Curaçao has made amendments to its National Ordinance on Identification when Rendering Services (Landsverordening Identificatie bij Dienstverlening / LID) and National Ordinance on Reporting of Unusual Transactions (Landsverordening Melding Ongebruikelijke Transacties / MOT). The two ordinances were supplemented by a provision that requires virtual asset service providers to comply with LID and MOT starting May 16, 2024.

In summary, as per the modified laws, registration with the CBCS is obligatory for supervisory and AML/CFT purposes. Non-compliance with these requirements may result in legal consequences for the entity and may lead to sanctions.

Referring to the legislation of Curaçao, we can highlight the following basic requirements for crypto companies:

1) it is necessary to declare themselves by filling out a form that includes such basic information about the company (company name, type of organizational form, date of registration, country of registration, contact information, geography of services performed, information about directors and shareholders, types of services provided, etc.);

2) copies of passports of the board members and beneficiaries, document on the organizational structure of the entity, document on the group structure must be attached to the completed application form;

3) also, such companies must comply with local laws and regulations provided for the combating of money laundering, namely those provisions related to customer identification, reporting and obligations in relation to unusual transactions.

Corporate income tax

• Despite the fact that the standard corporate tax rate in Curaçao is 22%, the effective tax rate can be much lower for companies that mainly operate outside of Curaçao.
• The jurisdiction operates on a territorial tax system, which means that only profits earned within Curaçao are taxable. If a company can prove that its income is derived from activities outside the island, it may not be taxed on those profits at all.

Capital gains tax

• Curaçao does not impose a capital gains tax on profits derived from cryptocurrency transactions. This means that businesses can retain more of their earnings without having to pay taxes on the profits made from buying and selling cryptocurrencies.

Dividend tax

• Curaçao does not impose dividend withholding tax, meaning that profits distributed by crypto companies to shareholders, including those residing outside Curaçao, can be repatriated without additional tax burdens.

Value added tax

• Curaçao does not have VAT but imposes a 7% General sales tax (GST) on goods and services. Cryptocurrencies themselves are typically not considered goods or services under this regime, so crypto transactions and trades are generally exempt from GST.

Curaçao is in the process of developing a more specific regulatory framework for cryptocurrencies and blockchain technologies. The current legal structure offers flexibility, with businesses largely following general financial regulations. As a result, tax treatments for crypto businesses and assets tend to align with those for other international services and products.