Dear Weekender,
As we navigate an era of rapid technological advancement, let’s take a moment to look at the latest trends and tax incentives shaping the tech scene here in our Friendly Island, Sint Maarten. This edition of the column will examine significant technology-related legislation.
Background
FinTech (short for Financial Technology) activities have been identified in Sint Maarten, however, there has been a lack of adequate supervisory legislation. Specifically, for FinTech the Central Bank of Curaçao and Sint Maarten issued minimal guidelines in 2018 in anticipation of supervisory legislation. With respect to the modernization of the gambling legislation (online and land based), the latest version of the draft legislation is expected to be finalized shortly.
International trends
Globally, many countries have already moved forward with implementing FinTech and gambling regulations, following years of policy discussion and development. To keep up with these international trends and to meet international standards, Sint Maarten has been working towards having FinTech legislation and regulation in place. International organizations such as the Financial Action Task Force (“FATF”) and its Caribbean counterpart the CFATF, the Organization for Economic Co-operation and Development (“OECD”) and the EU Code of Conduct review Caribbean jurisdictions on a regular basis to evaluate whether these jurisdictions meet international standards or not. In addition, maintaining stable relationships with correspondent banks remains a strategic priority for Caribbean nations.
FinTech legislation
The main purpose of FinTech legislation is to modernize the banking and payment systems of Sint Maarten.
- National Ordinance on the Supervision of Virtual Asset Service Providers
About: This legislation seeks to establish a licensing system for virtual asset service providers to operate in or from Sint Maarten. It is also proposed that the licensing as well as supervision and enforcement be conducted by the Central Bank of Curaçao and St. Maarten. As of 2024, the supervision for anti-money laundering and counter terrorism financing for these types of service providers is also conducted by the same institution.
Purpose of legislation: The most important background of this legislation is in recommendation number 15 of the FATF which is mainly aimed at the mitigation of risks related to money laundering and terrorism financing.
Status: draft delivered to the Minister.
- Draft National Ordinance on the Supervision of Payment Service Providers
About: Licensing requirements, creating substantive legal rules, oversight on the payment systems and enforcement and supervision by the Central Bank of Curaçao and Sint Maarten on these payment service providers. As of 2024, the supervision for anti-money laundering and counter terrorism financing for these types of service providers is also conducted by the same institution.
Purpose of this legislation: Increase confidence and increase the use in digital payment services in order to decrease the use of cash.
Status: Draft delivered to the Minister.
Draft Gambling Legislation
Another interesting development is the draft legislation on online and land-based gambling. Having a modernized regulatory framework in place allows for clear rights and obligations for all market participants and provides the regulator with tools to conduct supervision and enforcement. The status of this legislation is currently in draft.
Corporate & Tax Structuring
Once the abovementioned legislation is in place, corporate and tax structuring are crucial to ensure the envisioned activities are conducted in a legally appropriate and tax efficient manner. Your trusted lawyers and advisors from HBN are available to further assist.
Conclusion & Takeaways
Ultimately, the adoption and implementation of abovementioned legislation bring about positive developments for Sint Maarten by establishing structured regulatory frameworks for specific technology related activities such as virtual assets, payment services and gambling operations, thereby enhancing legal clarity for all stakeholders.
Yours sincerely,
Rejauna Rojer & Nicole Echobardo
HBN Law & Tax
