Economy of Saint Martin (island)
Until the island was affected by Hurricane Irma in 2017 and the COVID-19 pandemic in 2020, which put a stop to cruising, tourism accounted for 80% of the economy and about four-fifths of the labor force was engaged in that sector.
As an island in the Caribbean Sea, Saint Martin enjoys the kind of weather and natural geography that supports tourism.
Though the French and Dutch parts differ slightly in terms of their economies and types of tourists, they share the Caribbean's largest lagoon, which is frequented by yachts.
[6][7] On 6 September 2017 the island was hit by Hurricane Irma (Category 5 at landfall), which caused widespread and significant damage, estimated at $3 billion, to buildings and infrastructure.
[9][10][11] France's Minister of the Interior, Gérard Collomb, said on 8 September 2017 that most of the schools were destroyed on the French half of the island.
[13][14] Some days after the storm had abated, a survey by the Dutch Red Cross estimated that nearly a third of the buildings in Sint Maarten had been destroyed and that over 90% of structures on the island had been damaged.
[17] In the 1630s just after colonization by the Dutch, the Dutch West India Company started major salt mining operations on the island which in turn made the island more attractive to the Spanish (who wanted to control the salt trade, a fifteen-year war ensued).
During and after the war, the trade with the USA intensified to the point that they became the sole provider of the island because of the blockade of the Allied Forces.
When peace returned, the island took advantage of an American tourism market attracted by the Caribbean climate and environment.
In Sint Maarten (Dutch south), the Netherlands Antillean guilder (ANG) has been the official currency since 1940.
In addition, its potential growth level is low, as it is hard to reach substantial productivity gains in the services sector.
The Dutch south is known for its casinos, exotic drinks, jewelry and nightlife, while the French north is better known for its beaches, shopping and restaurants.
[21] At the border between the French and Dutch territories is the Caribbean's largest lagoon, Simpson Bay, which attracts tourists with yachts.
Cruise tourism in St. Maarten generated direct employment for 4,897 residents who earned $101.6 million in annual wages.
Winair (Windward Island Airways), a major regional airline in the Caribbean, is headquartered in Sint Maarten.
The turnover tax (BBO) is levied on the delivery of goods and all services rendered ‘within the territory’ by resident or non-resident entrepreneurs within the scope of their business.
A 5% room tax (logeergastenbelasting) is levied from non-resident guests of hotels and other guesthouses, including rentals of vacation villa's and condos.
Possibility for companies to obtain an official ruling (prise de position officielle) regarding their situation, which guarantees that the tax system applied to them will not be changed in the future.
Tax-Free repatriation of profits: Absence of any withholding tax for payments to beneficiaries resident outside Saint-Martin, on dividends, interest, or royalties.
On November 2, 2006, the Dutch government set aside 65 million guilders (NAF) to pay off St. Maarten's debts.
[31] Since St. Maarten became an autonomous country in 2010, it has never had a balanced budget and it has accumulated a debt of 200 million guilders (NAF) according to a statement by the Minister of Finance in December 2015.
