Foreign persons and entities are free to conclude representation, agency, distribution and franchising agreements with local persons or entities. These are common methods for oversees organizations to promote and offer their goods and services in Aruba as part of the Dutch Kingdom.
In general, there is no specific legislation dealing with these areas, and they are regulated by civil law. Some agreements like the commercial agency agreement are codified in the civil code. No formalities are required for the conclusion of such agreements. They may even be oral but it is obviously preferable that they be reduced to writing. Gomez & Bikker can provide you all necessary assistance. Most contract tend to be subject to Aruba law, but there is no bar to any foreign law serving as the governing law as long as there is some nexus between that law and the contract. The parties are free to agree on what court will have jurisdiction, or alternatively, agree that any disputes will be referred to arbitration. In short, the parties have free scope to regulate their relationship as they deem fit. As part of the Dutch Kingdom Aruba is also a party to a number of international trade treaties, which in some instances may determine the applicable law and/or mode of dispute resolution. Commission rates are not regulated and may be freely agreed upon between the parties.
With distribution and franchise agreements, if any royalties or license fee is payable to a foreign person or entity, the exchange control regulations as regulated by the central bank will apply.
If you have any questions on agency, distribution or franchise related matters contact the author.