TT is one of the top five countries for visitors to Curaçao’s Harbour Free Zone.
Established in 1956, the zone, in Curaçao’s capital, Willemstad, allows the wholesale purchase of available items including accessories, shoes, electronics, and clothing, and each store in the park has its own minimum purchase amount.
Curinde investment promotion manager Fiorina Hernandez told Business Day many customers are from the Caribbean and South America, and its top markets are Venezuela, TT, Jamaica, Suriname, the Dominican Republic, and Haiti.
“Of course, lately it has diminished a bit, because there is no consistent connectivity. But with the start of the Caribbean Airlines direct flights, we think it’s going to pick up because there is a lot of interest in the Trinidad market to come buy in the zone.”
CAL made its inaugural flight to Curaçao, its 21st destination, on August 2 and will continue to fly between TT and Curaçao on Mondays and Fridays.
The Harbour Free Zone is the first and largest of its kind in the country. The area is 210,000 square metres with 99,000 square metres of buildings, shops, warehouses, and storage spaces for about 80 wholesale companies.
In order to rent a space in the zone, 75 per cent or more of a company’s annual sales must be generated by export. In exchange, companies are exempted from sales tax and import duties, while their profit tax is only two per cent, while companies outside pay 22 per cent, according to Curaçao’s economic zone law.
Hernandez explained that Curinde is the operations manager of three business parks in Curaçao – two free zones and one industrial park geared towards the Curaçao market. She said it is a semi-government entity in which the government owns 85 per cent of the shares, and 15 per cent are held by a local pension fund. It does not receive any government subsidies and all revenue comes from its clients, companies in the zones.
She said Cuba is a growing market but Cuban retailers are not allowed to take more than six pieces per item, so merchants recently had to be more flexible and offer a decreased minimum purchase to accommodate such smaller clients. A few companies even allow retail sales.
“We had to diversify and look for new markets. Venezuela was an important market for us, but with the situation there, they travel less and purchase less, which has affected our merchants in the zone.”
Tourists are allowed to visit, show their passports and receive a free day pass to shop. Customers can walk out with up to US$100 in goods. If they spend more, the free zone will either ship the goods directly to the intended country or arrange for the packages to be delivered to the airport on the day of the buyer’s flight.
Hernandez explained that the US$100 limit is to ensure goods do not make it to the local market without paying the proper taxes. She said the free zones are mainly distribution centres for products imported from China, Panama, and countries in the Far East. Locally-made products are not available in the free zone, as local production is limited in Curaçao.
However, she said the government would like that to change and is looking into enabling more local manufacturing.
“The reason why production isn’t that high in Curaçao is because the cost of doing business is a little bit high compared to other countries in the region. We’re talking about labour costs, energy and utility cost.”
To allay some of the zones’ utility costs, however, Hernandez said Curinde is working with the local utility company to install solar panels on the roofs of the buildings in both free zones and at the industrial park by the beginning of 2020.