Home Education Investment in Education: An Opportunity with Great Potential

Investment in Education: An Opportunity with Great Potential

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Thanks to our rich cultural heritage, Curaçao is a multicultural society with people from diverse backgrounds, speaking several languages, all with a global perspective on business. This is so deeply rooted in our culture that we tend to forget the great advantages it has on our daily work-life.

TEXT JANICE TJON SIEN KIE AND ARNE KATTOUW, PWC DUTCH CARIBBEAN

More and more, students across the world are choosing to pursue foreign degrees through international higher education programs. The need for traveling overseas to the country awarding the qualification or providing the academic oversight has decreased significantly. Through a range of collaborative arrangements with degree-awarding institutions from major education-exporting countries, international higher education programs can be delivered in innovative ways, crossing borders and reaching students demanding these programs.

Research shows that over 153 million students participate in higher education. Based on current trends, the number of students’ with global mobility is expected to be around 6.7 million by 2020. This particular form of education is referred to as Transnational Education (TNE). Curaçao’s Ministry of Economic Development has identified this sector as a key investment opportunity with great potential.

More and more, students across the world are choosing to pursue foreign degrees through international higher education programs.

Transnational Education in a Nutshell
The United Nations Education, Scientific and Cultural Organization (UNESCO) defines transnational education as: all types of higher education study programs, or sets of courses of study, or educational services (also distance education) in which the learners are located in a country different form the one where the awarding institution is based.

Institutions in Curaçao are already successfully engaged in forms of higher transnational education. Most of them are delivered by franchised providers and branch campus operations. For example, University of Curaçao (UoC), University of the Dutch Caribbean (UDC) and College of the Dutch Caribbean (CDC) are local institutions offering higher education programs, some in partnership with foreign institutions. Additionally, Curaçao is home of three medical schools that award Doctor of Medicine degrees (MD). These three universities: Avalon University School of Medicine, Caribbean Medical University and St. Martinus College have around 600 students 90% of which are foreign. The staff members are also a combination of foreign and local professionals. Another local example of TNE in Curaçao is the Caribbean Marine Biology Institute (Carmabi). This institute welcomes around 200 scientists annually to conduct research and attend specific courses in marine biology.

Curaçao, as part of the Kingdom of the Netherlands, is a politically stable country. The inhabitants are multilingual and the infrastructure is well developed. Immigration laws for Dutch and American passport holders are very flexible.

Also, Curacao’s tax regime offers attractive incentives and possibilities for foreign institutions to invest in Curaçao. Several tax incentives are available, for example with regard to corporate income tax. Depending on the amount of investment, a “tax holiday” could be requested.

This specific incentive reduces the corporate income tax rate to 2%. Another incentive that might apply for foreign education institutions is export regulation, which would provide them with a tax rate of approximately 3.2% from 2016 onwards, in cases where students are mostly foreign. In case a tax holiday applies, this also allows for an exemption towards import duty and sales tax, with regard to the cost of building and furnishing the school.

For teachers, the regular income tax and social security premiums are greatly reduced in case they qualify for the “expatriate regulation.” To apply for this, incentive specific requirements regarding income, education and experience of the teacher must be met. The students that attend the school for a short period of time, for example less than a year, may not be considered a resident for tax purposes and will therefore only be taxed on locally earned income. In case students become a resident for tax purposes, they will be taxed on their local and foreign income. Nevertheless, periodic financial support from family or any amount of student loans they receive is not considered taxable income. If a student does enjoy taxable income, then the initial USD 10,000 (approx..) is considered tax free.

For teachers, the regular income tax and social security premiums are greatly reduced in case they qualify for the “expatriate regulation.”

Opportunities beyond borders for Curaçao
According to Curaçao’s Central Bureau of Statistics, over the last three years, more than 2000 students have attended higher-level public high schools (HAVO/VWO). Transnational education may offer local students access to high-quality, accredited education programs, without the need to travel overseas. Developing this sector will create jobs, generate cross-sectorial income, and contribute to the annual GDP. Curaçao can benefit significantly from TNE opportunities. Nevertheless, the number and type of TNE operations and the aggregate enrolment of local students, expatriate students and staff enrolled in all operations must be taken into account. Flexible immigration policies to facilitate this sector are key. The potential for TNE in Curaçao lies creating a variety of programs and opportunities. Current programs offered in Curaçao are focused on management, financial services or medical professions, but there are great opportunities for niche studies such as hospitality, culinary arts, fine arts and science.

Transnational education can be delivered through different models. The most common delivery methods are:
• Double degree or joint degree: in this form of TNE, education providers in different jurisdictions collaborate to offer a program through which students receive qualifications from all institutions involved.

• Branch campus: this is the most visible example of TNE; through this form, an educational institution establishes a fully operational branch campus in the host country. Furthermore, persons from the offering institution are based in the foreign country.

• Distance or virtual education: courses and programs are offered through different channels (internet, video conferring, skype) and other methods within or beyond the national boundaries. An offering institution has no physical presence in the country of the student, but they can make use of support centers.

• Study abroad: in this more traditional model, students of local institutions have the opportunity to undertake courses and degrees for a fixed period of time at an institution located abroad.

• Franchising or partnership: an educational institution in an offering country enters into a partnership with an institution in a host country by offering courses and education programs. This model is also referred to as delivery through-third parties or service suppliers.

• Articulation or twinning: an institution from an offering country systematically recognizes specified courses or programs (e.g. through partial credit transfer) at an institution in a host country.