Types of business activities in the Free Zone of Aruba

  Several types of businesses activities are allowed in the free zone, such as:

  • Trade in final products (import, storage and export);
  • Repackaging, labeling, assembling and processing of semi-products;
  • All types of services (financial services are excluded): logistic, consulting, internet-mailing, medical services, etc.;
  • Retail sales;
  • Or a combination of the above mentioned.

 For more info contact www.gobiklaw.com

Benefits of doing business in the Free Zone of Aruba www.fzanv.com

Companies that operate in the export business of goods and services can enhance their competitive edge by choosing the free zone status in Aruba. A free zone company in Aruba enjoys three major financial benefits:

  • 2% tax over all profits generated from free zone activities
  • 0% import duties on goods imported and exported through the free zone
  • 0% turnover tax over the turnover generated from free zone activities
  • Exemption from foreign exchange commission on foreign currency payments

 Other Benefits

  • No local partner is required to establish a free zone company (full foreign ownership)
  • No import duties on equipment and machinery acquired for company use
  • A US dollar account can be maintained ensuring efficiency in payments
  • No minimum investment capital required to start up a business in the free zone
  • Custom clearance office located at the main gate of the free zones
  • Modern control mechanism and clear regulations
  • Flexible construction possibilities
  • 24-hour security
  • The free zones are located at short distance from the harbor and airport

Employment agreement in Aruba

The legislation of Aruba establishes that an employment relationship exists when the following facts are fulfilled: (a) dependency or subordination (b) personal benefit of the service (c) payment of a wage. A written employment agreement is not required although it is recommended to have one in place, especially to evidence specific items. When the work is performed (permanently) in Aruba, the labor relation is governed by Aruba mandatory law. As such an employee is entitled to all rights and remedies under Aruba law, including general medical insurance, minimum wages, minimum vacation days, rest days etc. Am employment agreement can de for an indefinite period of time, or for a fixed term.

Aruba companies are “checking-the-box”. Should you?

Under the new “check-the-box”-rules, limited liability Aruba companies (“naamloze vennootschap”) (“n.v.”) and aruba axempt companies (“AVV”) have the option to opt for fiscal transparency. In that case the company will be treated fiscally as a partnership (“maatschap”), so that not the company is subject top profit tax, but the shareholders. If the shareholders reside in Aruba, the profits may be subject to tax at the level of the shareholders, in case of a company 35%. In case of an individual the rate could be higher than 35%. If the shareholders reside outside Aruba, the profits (made by the foreign shareholder) will not be taxable unless the foreign shareholder is deemed to have a permanent establishment in Aruba or the profits are derived from immovable property in Aruba.

P.G. looses civil injuction against Aruba.

On June 5th, 2007 The Courts of Aruba declared a civil claim of the prosecutor general (“PG”) inadmissible. The  PG demanded that her pension to be adjusted in accordance to certain promises made by Aruba. The Court ruled that the PG had sought the wrong legal recourse by addressing the civil court.  Acording to the Court, the PG should have sought legal remedy through the administrative courts. The latter legal recourse is available to the PG as of June 7th, 2007.

On June 6th, 2007 I gave legal commentary on the subject for ATV Channel 15.