Organization of an international gambling company in Curacao

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As part of the LAWBOOT Lawyers & Consultants blog , we will explain how to create a licensed gambling company in Curaçao.
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For ease of perception of the text of the article, we will use slang terminology inherent in the online gambling industry.

After reading the article, you will learn what benefits can be derived from the above-mentioned jurisdiction in organizing gambling on the Internet.

We went through a licensing procedure from start to finish with several European clients of our law firm , and will be happy to share consolidated information and experience.

To begin with, one of the most accessible and loyal jurisdictions for licensing the gambling business (online casino, roulette, blackjack, poker, betting, lotto, bingo, etc.) is Curaçao.

What is the license for?

Without a gambling license, fortunately, or unfortunately, it is impossible to conduct activities for organizing gambling, for at least the following reasons:

- no bank will open a bank account for a gambling company, which will not give the opportunity to manage the money that comes from the players through payment aggregators, bank cards, etc.

- also not a single “white” IPSP (internet payment service provider) connects to the gambling site, as a result of which the company will not be able to accept online payments (at least from bank cards);

- moreover, the overwhelming majority of users will refuse to play (bet) on a site that does not have a license.

Hypothetically, even if some bank or IPSP agrees to process payments (which we question), and players will bet, an unlicensed gambling activity will be considered illegal in the vast majority of countries around the world, which can entail serious responsibility.

A little about the type of company and the license for Curaçao

The company on Kyurosao needs to register type NV (analogue of a limited liability company). You need to make a share capital of $ 5,000, but we can help introduce and withdraw the money in a completely legal way.

The founder of the company can be both a legal entity and an individual (read more). The license, de jure, is a sub-license issued by a company registered on the island licensed for such actions. A license is issued by default on two different URLs , which makes it possible to have two different projects under one license. The number of URLs can be increased for a fee.

License cost

The cost of the license has several components.
1) local hosting service provider for storing databases required by law,
2) directly the cost of the license,
3) software certification costs (if necessary),
4) the cost of registering a company in Curaçao, as well as fiduciary services of local registrars,
5) the cost of registering a subsidiary or parent company in the territory of the European Union (you can read above why it is needed) + nominal services, in case the client wants to use them,

Do not hesitate to contact the staff of our company for detailed consultations and budgeting for the creation of the structure described in the publication.

Corporate structure

In order to successfully connect a merchant account and go through integration with IPSP, it is recommended to create the following corporate structure:
- the parent company in the EU (for example, Cyprus, Malta and any other European jurisdictions), and a subsidiary in Curaçao,
- or vice versa, the parent company in Curaçao, and a subsidiary in the EU.

Naturally, this is not the only acceptable option, but one of the most optimal, as European banks, when opening an account, want to see in the corporate structure at least one company from the EU.

Restrictions for gambling companies licensed to Curaçao

The company's activities may be limited by the jurisdiction of Curaçao itself, or by the laws of other states.

Some countries at the legislative level prohibit their users from taking part in online gambling, or vice versa, international gambling companies accept bets from their citizens.

The presence of such restrictions suggests that the organization of gambling requires a detailed planning and understanding of the local legislation of many countries.

At the same time, the jurisdiction of Curaçao itself places rather loyal requirements for companies licensed on the island.

The following is one of the basic requirements:
“Gambling companies must ensure that they do not navigate the market, and also promote or deliberately offer their gambling to residents of“ forbidden states ”, including but not exclusively such states as Aruba, Bonaire, Curaçao, France, the Netherlands, o- va Saba, Article, St. Martin and the USA, as well as any other jurisdiction in which, according to the Government of Curaçao, gambling is considered prohibited.
Orientation to a specific market of a prohibited state is defined as displaying the flag of such a country or any other state symbols on the website, as well as promoting the method of payment for services directly among residents of a prohibited country or conscious admission of any new customers who are residents of prohibited countries. ”



In simple words, gambling companies should not conduct direct marketing aimed at a prohibited country. The service should be “for everyone” and be promoted (advertised) as such. At the same time, the term “conscious admission of any new customers” is evaluative, it can even be called “formal”.

Taxation of companies on Kyurosao

The standard corporate tax rate (profit tax) in 2016 is 22%.
But, if the company operates within the Curacao e-Zone , the tax rate for companies is 2% . According to the laws governing gambling, companies providing services on the Internet are classified as companies operating within Curacao e-Zone.

As for VAT (analogue of VAT), the rate is 6%.
VAT applies in the case of the provision of goods and services on the island, as well as the import of goods to the island. Exceptions are companies operating in Curacao e-Zone.

In summary, in order to have a 2% tax and not pay VAT, you must register at Curacao e-Zone and not accept bids from Curaçao residents. Most IPSPs allow you to filter payments.

Technical requirements for licensed companies in Curaçao

One of the requirements is to have a link to the license and logo, confirming that the site is licensed in Curaçao.

Hosting

The second requirement is to store the “backup of the customer and transaction database” on a server that is physically located on the island.

In addition to the mentioned database, all information can be placed on any server regardless of its geography, which is one of the main advantages of the jurisdiction.

Software certification

Proprietary software at the request of a license provider is subject to certification if it contains such elements, for example, as an RNG (random number generator). Certification is carried out by special QA companies. Having a certificate is always a matter of negotiation between the license provider and the gambling company.

Documents posted on the site

One of the important attributes of a website is the availability of Terms of Use, Privacy Policy and Refund Policy. These documents allow you to settle relationships with players. The licensee may receive complaints from the players on your website, to which he is obliged to respond.

The licensee may suspend the license, or cancel it.

In order to avoid complaints from players, we compile for our clients and constantly update the documents mentioned above, which are an excellent risk planning tool.

Bank account and card processing

Most banks in the world do not work with companies that engage in gambling activities. But this does not mean that there are no such banks. We offer our clients with licenses for Curaçao such world-famous and licensed as financial (payment) institution companies like Wirecard (which have their own bank in Germany), Payvision, etc.

In the process of opening an account, it is very important to prove to the bank that the founder has enough white money to start the gambling business, that the company will conduct an absolutely honest and legitimate business, and it is right and clear to fill out all the forms requested by the bank manager or IPSP.

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