Oranjestad is the capital of Aruba. Dutch and Papiamento are official languages of the country. Aruba is an autonomous region within the Kingdom of the Netherlands, from which Aruba became independent in 1986. Aruba together with the Netherlands and the Netherlands Antilles form a Commonwealth. All these countries share the same Dutch citizenship and the same passport.

Aruba enjoys one of the highest standards of living in the Caribbean region, where unemployment rate is low and approximately 75% of GNP is earned from tourism and related activities. Oil processing industry, agriculture and manufacturing sector have minimal influence on today’s economy of Aruba. Main trading partners are the Netherlands, the USA and Venezuela; most of tourists come exactly from these countries.

The Aruban florin (AWG) is the national currency of Aruba.

Geography

Aruba’s dry tropical marine climate is different from the most part of the Caribbean islands, which attracts tourists, as it is almost a guarantee of warm, sunny and dry weather.  The temperature remains constant almost all the year, averaging at 28 degrees C. Aruba has cactus-strewn landscape; the most part of its territory is flat, without rivers. Western and Southern coasts have been developed for tourism purposes due to their white sandy beaches and a relative protection from fierce ocean currents. The Mount Jamanota is Aruba’s highest point which raises at 188 metres above the sea level.

Map, Flag and Coat of Arms

Types of Company

The New Fiscal Regime was introduced in Aruba in 2003 which abolished its offshore regime. All the companies incorporated prior to this year should have been transformed into corporate bodies following new regulation until the end of 2007.

Limited Liability Company

This company can be managed by residents and non-residents of Aruba. At least two subscribers and a minimum capital of AWG 25,000 are required for incorporating a company. Its accounts must be audited and filed on the annual basis. A Minister of Economic Affairs should issue a license, in order to authorize a company conduct a business. Stamp duty must be paid at the moment of incorporation. Shareholders’ meetings must be held in Aruba and every such meeting must have its minutes. This type of company is a subject to exchange controls.

Aruba Exempt Corporation

This type of company is subject to much less complicated regulations than limited liability companies. However, from 1st January 2006 a revised tax regime and new regulations apply to this type of company, including the following: this type of company can continue its activities becoming liable to pay corporation tax at a normal rate; it can remain exempt in case it operates as a holding or financing company, but is not as a bank, as well as investment activities may be exempt; such a company can decide to obtain a “pass-through” status, meaning that the income passes directly to shareholders, which are then taxed at the individual level. Identity of shareholders must be disclosed to the state authorities.

General Partnership

Partners must be fiscally transparent and fully liable to all the debts of the partnership. There are no auditing and filing requirements of a general partnership’s accounts. Details of a general partnership and its partners must be provided to the Commercial Register.

Limited Partnership

At least one general and one limited partners may form a limited partnership. General partners have unlimited liability, while limited partners are liable only up to their contributions to the partnership. Information on limited partners does not need to be disclosed to the authorities.

Taxation

In 2006 a tax reform has been implemented, the aim of which was to lower direct taxes and to convert them into indirect taxes.

Personal

A person’s residence determines its tax status. Residence in Aruba is defined by a person’s permanent home, habitual place of residence and centre of economic interests. Residents are taxed on their world-wide income, including income from business, employment, property, capital and periodic receipts. Non-residents are taxed on income derived in Aruba from their business, employment or real estate.

Income taxes together with social security contributions are main taxes applied to individuals. There also are gift and inheritance taxes, as well as a small property tax. Import duties at a standard rate of 12% are added to many goods and commodities. Withholding tax was introduced under the EU Saving Tax Directive, which applies tax on interests of saving accounts or other savings received by residents of the EU within Aruba.

Corporate

A standard rate of the corporation tax in Aruba is 28% applied to all non-exempt companies. A standard rate of 10% of a dividend withholding tax was introduced by the New Fiscal Regime. This rate is reduced to 5% in case all the shares of a distributing company are held by a qualifying company whose shares are listed on a recognized stock exchange, or at least half of the issued shares of the company itself are listed on a recognized stock exchange.

Annual property tax at a rate of 0.4% of the market value of the property is payable annually. 3% of the value is payable at the moment of a property purchase by its buyer. A Business Turnover Tax is an indirect tax charged at a rate of 3% and payable by entrepreneurs for supplying goods or providing services in Aruba. Reduced rates are applicable for certain products and services, while medical sector, tourism and education are exempt from this type of tax.