|Establishing a business in Aruba|
All businesses in Aruba, whether a sole proprietorship, legal entities or a branch of a foreign legal entity, all are required to register at the Aruba Chamber of Commerce within one week after their commercial activities have started according to the Trade Registry Ordinance, art. 4 (NL). The procedure to follow in order to start a business in Aruba may vary depending on the legal form chosen.
Aruba has various legal forms for doing business, being:
The sole proprietorship and general partnership are often the preferred choice for local starting entrepreneurs who initiate a small and/or low risk venture. For capital intensive or high risk ventures, the entrepreneur can opt for legal entities such as, the NV, VBA or AVV.
Establishing sole proprietorships and general partnerships
A sole proprietorship is a legal form with only one proprietor, who is personally liable for all of the business’ actions. The sole proprietorship is reserved for locals (Arubans) or people who are considered local. When the owner of the sole proprietorship is born in Aruba with the Dutch nationality and at least 18 of age, he/she is exempted from the business license requirement and can make an appointment to register the sole proprietorship at the Aruba Chamber. Registration is completed within 36 hours when presenting at the Chamber with the correct documents.
In case the owner was not born in Aruba but is considered local, first he/she should apply for a business license at the Department of Economic Affairs. When there is more than one person involved, the partners are required to register a general partnership. The requirements are the same as for the sole proprietorship.
Aruban born Dutch nationals do not require a business license. Any partner that does not comply with that requirement needs to apply for a license before business activities can start.
Establishing the NV
The Naamloze Vennootschap, abbreviated NV, is a Corporation, according to Aruban law. It is incorporated by a civil notary who provides the deed of incorporation. At least two founders, whether natural persons or entities are needed to incorporate a NV. The authorized capital is distributed in shares. The company’s shares may or may not be registered to certain owners, which makes them freely transferable.
The shareholders have limited liability. There is no legal requirement as to the nationality or residency of the shareholders. The NV is legally required to be registered in the Trade Registry at the Aruba Chamber and to apply for a business license at the Department of Economic Affairs. Click here for more information on the NV (EN).
Establishing the VBA
The Vennootschap met Beperkte Aansprakelijkheid (VBA) is a Limited Liability Company, that requires at least one incorporator for establishment, with no minimum capital. The VBA is incorporated by a Civil Notary, who provides the Deed of Incorporation. The deed may be executed in the languages Papiamento, Dutch or English. After incorporation, the notary will register the VBA in the Trade Registry at the Aruba Chamber. Then it is necessary to apply for the VBA business license at the Department of Economic Affairs.
The VBA must be represented by at least one managing director at all times. At least one of the directors or the legal representative must be a resident of Aruba. Authorizations and restrictions are stated in the articles of incorporation or rules and regulations. The managing directors are responsible for complying with obligations towards the Chamber. Click here for more information on the VBA in papiamento and english.
Establishing the AVV
The Aruba Exempt Corporation (AVV) is a corporation with limited liability. The AVV is incorporated by a civil law notary in Aruba who provides the deed of incorporation, after which a certificate of no objection of the Minister of Justice is required on the deed of incorporation and the articles of incorporation.
The AVV is represented by is its managing director(s) and is legally required to be represented at all times by at least one legal representative. The legal representative is not a managing director and is a NV established and located in Aruba, whose objects include the representation of AVV’s, while in possession of the applicable business license.
All AVV’s, including offshore ones, are obliged to apply for a business license. The AVV is a company with a special tax regime. If the activities are restricted to certain pre-defined areas, the profits generated with these activities are tax exempt on Aruba. The exempt company remains subject to corporate income tax, but its profits are exempt. If the exempt company does more than the pre-defined activities, the exempt company is subject to the normal corporate income tax rate of 28%.
Businesses need a business license according to the Ordinance on the Establishment of Businesses before initiating their activities. The only exemption to the business license requirement is a sole proprietorship or a general partnership consisting of Aruban born adults with the Dutch nationality. In all other cases a business license is required.
The business license is issued by the Department of Economic Affairs after the Aruba Chamber has been heard. The Chamber will take into consideration its Guidelines to the Business Establishment Ordinance, which are drawn up to support the Chamber in this matter. According to the Guidelines, the Chamber will give a positive or negative advice to the Minister for the granting of the business license for a corporation, of which at least 60% of the shares are owned by locals, or the equivalent of a local, or a legal entity incorporated under the laws of Aruba of which all shareholders are local.
The Chamber sets the following conditions:
The nature of the activities and the place of establishment of the corporation must be in conformity with the Guidelines, premised on sustainable development;
To review the Chamber’s guidelines (NL), click here.
For more information on the business establishment license, consult the Department of Economic Affairs’ website, www.arubaeconomicaffairs.aw.
In addition to a business license, company directors not born in Aruba, and hold the Dutch nationality, should apply for a director’s license at the Department of Economic Affairs. Consult the Department’s website for more information on the requirements, www.arubaeconomicaffairs.aw.
Company obligations towards the Chamber
Besides registering their business within one week after the initial start of the economic activities, businesses should also keep their company data up to date at all times. Adaptations are conducted from Monday thru Friday, between 1:00-3:00pm, free of charge. Businesses can make unlimited modifications and amendments in the company data, which will be processed within 36 hours. For more information, download the brochure on Rights and Obligations of Companies & Foundations here in papiamento and english.
Businesses are subject to paying a registration fee upon registration and an annual contribution in the years following. The registration fee and annual contribution are based on the total amount of capital invested in the business as appearing in the Chamber’s records on January 1st of each following year and is determined by the Minister of Economic Affairs according to the Ordinance on the Chamber of Commerce & Industry, art. 21, paragraph 1, c (NL).
The Chamber’s registration and annual contribution fee (in Aruban florins)
Read the brochure the Chamber’s registration and annual contribution fee for more information.