Aruba is a democratic country with an efficient legal framework and political stability indicative of a strong business climate. Companies from Aruba have preferential access to the European market (Overseas Countries and Territories) and the US market (Caribbean Basin Initiative). The Government of Aruba (GOA) has created several tools to help stimulate international investment, such as a competitive profit tax, low import duties on green products, import duty reductions or exemptions for imported raw materials and machinery, low license fees, and the free trade zone regime.
- 7% Turnover Tax (BBO/BAZV/BAVP)
- 22% Corporate Income Tax
- 10% Dividend Tax
- 10% Investment Allowance
An Attractive Fiscal Framework for Business
Aruba has several incentives that are noteworthy to investors, including a 10% investment allowance on fixed assets (including purchases abroad) and two tax free zones (including the capital city of Oranjestad and one at Barcadera).
The Government of Aruba also offers incentives for the island’s Promising Sectors:
- A dedicated industry area with available long-lease land as established in Aruba’s Spatial Development Plan (ROP) 2019 and its regulations (ROPV) for 2020-2024
- Exemption from import duties on goods for commercial activities in horticulture, agriculture, hydroponics, cattle breeding, fishing, fish farming, or beekeeping
- Tax exemption on profit tax, income tax, and turnover tax (BBO/BAVP/BAZV) for companies with activities in agriculture, horticulture, fisheries, beekeeping, livestock, or fish farming
Paving the way for Profit
Qualifying companies can receive a turnover tax exemption on certain goods, including but not limited to:
- Transfer of real estate (in as far as transfer tax is due)
- Fuels for airlines or ships belonging to (foreign) militaries or the Coast Guard of the islands of the Dutch Kingdom
- Prescription medicines
- By Decree mentioned (artificial) medical supplements
- Fuels to water & electricity generating or distribution companies
- Refined oil products
- Water, electricity, and gas
- Free Zone companies (in as far as turnover is generated with sales abroad)
Additionally, certain services are eligible for a turnover tax exemption:
- Renting out hotel rooms and apartments (in as far as tourist levy is due)
- Gaming services (in as far as gaming tax is due)
- International transport of goods and services by way of an airplane or ship
- Public schools and specific schools, as well as the University of Aruba
- Renting out of houses used as the dwelling of the tenant
- Life and pension insurances
- Services provided from the airport or seaport relating to outgoing and incoming goods or persons
- Interest, dividends, and capital gains of shares and securities
- Refining oil based on tolling agreements for foreign purchasers
- Storage and transshipment of oil for foreign purchasers and aimed at export thereof
The Government of Aruba also offers tax exemption on profit tax, income tax and turnover tax for companies with activities in agriculture, horticulture, fisheries, beekeeping, livestock, or fish farming.
Support for International Employees
Whether you’re moving to Aruba with your company or starting your own venture on the island, expats receive several unique benefits:
- Tax-exemption for expat allowances up to a maximum of 15,000 Aruban Florin (AWG) per calendar year
- Allowances for the special education of children of the expat are tax-exempt for a maximum of AWG 25,000 per year per child
- Allowances for housing are tax-exempt for a maximum of AWG 2,500 per month, provided the employee pays for the housing
- In case the expat works on a net basis as per his/her labor agreement, the employer does not need to gross up the wage
- Reimbursement of airline tickets of the employee and his/her family are tax-exempt, as well as the costs related to shipping the household of the employee
- Tax-exempt hotel accommodation, lodging, and car rental, for a maximum of 2 months
- A tax-exempt refurbishment allowance of two times the monthly gross salary (with a maximum of AWG 15,000)
- One free ticket per year is provided to allow expat travel to their country of origin for a maximum of 5 years
Standardized and Dependable for Investments
Though a part of the Kingdom of Netherlands, Aruba has its own separate tax legislation.
Cost of doing business:
- Corporate income tax: 22%
- Turnover tax (BBO/BAZV/BAVP): 7%
- Import duties on green products: 2%
- Investment allowance: 10%
- Dividend tax: 10%
- Personal income tax: 52% maximum
- Accelerated depreciation of business assets
- Minimum wage per month: USD 914.35
- Average hours per week: 40
- The average cost of electricity (per KWH for businesses): 0.281 kW
- The average cost of water for (businesses): USD 5.307 each m³
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