Doing Business in Aruba

Occasionally, we have clients who not only want to enjoy our beautiful beaches and weather but also desire to invest in Aruba and be part of our economic success.

In this section of Aruba Property Buzz, we will provide you key information on investing in Aruba and establishing a business in Aruba.

General information

·        Capital                                            Oranjestad

·        Official Language                         Dutch and Papiamento

·        Population                                     107,000

·        Area                                                180 km2/ 70 miles

·        Time zone                                      UTC -4

·        Currency                                        Aruban Florin (AWG)

·        GDP 2023 (in M $USD )                USD 4,115

·        GDP 2023 % growth                     13.7%

·        Total Visitors (* 1,000)                  1,244

·        Total Cruise Passengers (*1,000)      818

• Languages

The official languages of Aruba are Dutch and since 2003 Papiamento. The Aruban native language Papiamento is a Creole language based on Spanish and Portuguese, with Dutch, English and African influences. Besides the official languages many people also speak English and Spanish.

• Currency

The official currency of Aruba is the Aruban Florin (AWG), which is pegged to the US Dollar at 1.80. The US Dollar is also widely accepted on the island. The monetary system of the island is regulated by the Central Bank of Aruba.

• Economy

Since 2022, Aruba has experienced a significant increase in its nominal Gross Domestic Product (GDP), with a growth of 13.7 percent in 2023 and an expected rise of 8.5 percent in 2024. Aruba's tourism sector continues to play a crucial role in the economy. Currently, there is a noticeable increase in both the number of tourists and the average spending per tourist per night, which is approaching pre-pandemic levels. Aruba received a total of 1,244,000 visitors and 818,000 cruise passengers in 2023. and is projected to increase to 1,393,000 visitors and 871,000 cruise passengers in 2024. The projections are very positive for this year and suggest that tourism revenue is expected to grow by 14.0 percent in 2024.

Aruba is not just a popular tourist destination but also a promising location to expand your business and be part of its economic success.

Doing Business in Aruba 8 Essential Steps

These are the 8 essential steps to establish a business in Aruba:

1.     Select a legal business structure.

2.     Register your business.

3.     Consult the Spatial Development Plan (ROP).

4.     Apply for a business license.

5.     Register with the Tax Department.

6.     Obtain necessary licenses and permits.

7.     Adhere to Aruban environmental regulations.

8.     Open a business account.

1.     Select a legal business structure

•    CORPORATIONS

To do business in Aruba, a company must first acquire a business license under the Business Establishment Ordinance. Aruba offers various legal forms for doing business. The following are the most common legal entities in Aruba:

i.   The Public Limited Liability Company (Naamloze Vennootschap, N.V.)

ii.   The Limited Liability Company (Vennootschap met beperkte Aansprakelijkheid, V.B.A.)

iii.   General Partnership (Vennootschap Onder Firma, V.O.F.)

  i. PUBLIC LIMITED LIABILITY COMPANY

The most common legal form of doing business in Aruba is through the Public Limited Liability Company or Naamloze Vennootschap (N.V.). This is a corporate body with shareholders governed by corporate law and its articles of association. The corporation itself, not the shareholders that own it, is legally liable for the corporation’s acts and debts.

One or more (legal) persons form the Public Limited Liability Company (N.V.) by signing a notarial deed before an Aruban civil law notary. The statutes and rules regulating the N.V. and the conduct of affairs, commonly referred to as the articles of association, are contained in this notarial deed of incorporation, which must be in Dutch.

ii. THE LIMITED LIABILITY COMPANY

The Limited Liability Company, or Vennootschap met beperkte Aansprakelijkheid (V.B.A.), is a single business where two or more people share ownership. An Aruban civil law notary completes a notarial Deed of Incorporation to form a V.B.A. The Deed of Incorporation can be in any language that the civil law notary understands.

The incorporators of a V.B.A. are not required by law to participate in the issued capital at the time of incorporation. The by-laws can be found in the articles of incorporation or separate rules (referred to as Regulations). As a result, the articles of incorporation might be concise.

iii. GENERAL PARTNERSHIP

The Vennootschap Onder Firma (V.O.F.) is a general partnership in which all members are equally and severally liable for the debts incurred by the partnership’s business. Partners run the firm and use the same company name, but the general partnership has its own capital, distinct from the partners’ assets. The Civil Code of Aruba applies to the general partnership.

2.     Register Your Business

All legal entities, except General Partnerships, must be registered through a civil law notary. The notary will handle the registration process at the Chamber of Commerce on your behalf.

3.     Consult the Spatial Development Plan (ROP)

If you have a specific location in mind for your business, ensure it aligns with the Spatial Development Plan (ROP). The ROP outlines land use rules, specifying where certain businesses can establish and what structures are allowed. The Department of Infrastructure & Planning (DIP) handles lot allocation. 

4.     Apply for a Business License and Director License

To establish a business, non-Arubans usually need a local partner who owns 60% (exceptions are listed below) of the shares to start a business in Aruba. You can apply digitally through the Department of Economic Affairs, Commerce, and Industry of Aruba (DEACI). Check the relevant information on their website for the application process. Remember that you already need to have secured a business location to qualify.

In addition to a business license, company directors who are not born in Aruba, should apply for a director license. The director license is requested in conjunction with the business license.

5.     Register with the Tax Department

After registering your business with the Chamber of Commerce and obtaining the necessary business license, it is crucial to promptly register with the Tax Department (DIMP) to obtain your tax registration number. For assistance with this process, please contact info@impuesto.aw.

6.     Obtain Necessary Licenses and Permits

Depending on your business type, you may need additional licenses and permits from different departments. Examples of businesses requiring these include food & beverage establishments, hotels & guest houses, transportation services, telecommunication companies, and more. Some licenses and permits will have expiration dates, requiring timely renewal.

7.     Adhere to Aruban Environmental Regulations

If your business operations impact the environment, you may need to apply for a nuisance license. Aruba has laws to protect nature and the environment, enforced by the Inspection Department of the Department of Nature and Environment (DNM).

8.     Open a Business Account

You should start the process of opening a business account when you are ready to engage in financial transactions for your business operations.

• Profit Tax: Profit tax is due on the profit of an enterprise that carries out its business in Aruba . The regular profit tax is 28%.

• Turnover Tax (BBO/BAZV/BAVP): This Tax applies to most sales and services in Aruba. The standard rate is 7%.

• Dividend Withholding Tax: Dividend withholding tax is due upon dividend distributions from companies situated in Aruba. The tax rate is 10%.

• Real Estate Tax: Real estate tax applies to real estate property in Aruba. The tax rate is 0.4% of the value of the property.

• Real Property Transfer Tax: Real property transfer tax is levied when a property is sold in Aruba. The tax rate is 6% of the value of the property.

Foreign residents in Aruba pay the same taxes as local residents based on their income and assets. In other words, foreign workers and their income will be subject to the personal income tax and other taxes imposed by Aruba. In addition, foreigners who purchase real estate in Aruba will be subject to the real estate tax and real estate transfer tax, just like local residents.

However, in some cases, foreigners may be exempt from certain taxes based on international tax agreements. For example, if a foreigner works in Aruba but does not reside on the island, they may be exempt from personal income tax in Aruba and pay taxes in their home country. In addition, foreigners who have entered Aruba with a digital nomad visa are exempt from taxes during their stay on the island.

If you are considering launching a business in Aruba, please do not hesitate to contact us, and we will guide you through this process.