Economic Overview
The travel industry, oil bunkering, neighborliness, and money related and business administrations are the backbones of the little open Aruban economy. Tourism represents a dominant part of monetary movement; starting at 2014, over 1.7 million visitors visited Aruba yearly, with the vast lion’s share of those from the US.
The quick development of the travel industry area has brought about a significant extension of different exercises.
Development keeps on blasting, particularly in the inn sector. Aruba is intensely subject to imports and is attempting endeavors to grow fares to enhance its exchange balance. Practically all shopper and capital merchandise are imported, with the US, the Netherlands, and Panama being the real providers.
In 2016, Citgo Petroleum Corporation, a circuitous completely possessed backup of Petroleos de Venezuela SA, and the Government of Aruba consented to an arrangement to restart Valero Energy Corp’s. previous 235,000-b/d refinery.
The Aruba Growth Fund will concentrate on securing organizations that can use the speculation group’s mastery in driving operational enhancements to make esteem.
While the reserve is segment rationalist, the venture group has assembled exhaustive learning and systems in an assortment of industry areas including: business and budgetary administrations, vitality, sustenance, telecom, the travel industry, managing an account, protection, universal exchange, assembling, preparing and medicinal services.
Main sectors in Aruba
One of the open doors Aruba offers is to utilize Aruba as a portal among Europe and Latin America in the field of innovation. The principle center for Aruba in this part is in the zone of supportability (clean innovation).
Aruba offers a stage (“foundation”) for manageable innovation, which unites financial specialists, backers, organizations, non-benefit associations and individuals in the territory of maintainable innovation. Aruba will position itself as the focal point of learning and expert administrations in the territory of supportability (clean innovation).
The Green Aruba Conference is a genuine case of this stage for manageability; it is a yearly occasion that pulls in all players in the practical field and has marked Aruba as a leader in this field.
Manageable Tourism
Aruba isn’t just taking a gander at the customary the travel industry which is basically centered around drawing in visitors to the island, yet in addition at the fare of the learning and ability that Aruba has gained in the course of the most recent decades with respect to the travel industry.
The legislature of Aruba has made an alluring bundle for speculators and business visionaries wishing to profit by this enormous open door that Aruba is putting forth. Aruban government arrangement bolsters ventures to additionally advance financial broadening and improve the personal satisfaction and expense motivations. Three extraordinary zones (being the Aruba Free Zone, The Green Zone, and The San Nicolas Special zone) are accessible alongside a professional business condition.
Coordinations
Inside this territory the objective for Aruba is to end up the stopover and redistribution point for exceedingly specific globally exchanged merchandise. The open doors distinguished around there are:
• Establishment of Latin American based producers,
• Re-bundling,
• Storage,
• Redistribution Center,
• Maintenance and activities,
• Training.
Money related and Business Integration
Aruba is going for associating European and Latin American organizations through one of a kind points of interest Aruba offers, for example, its superb framework and network; straightforwardness and security of its political framework, laws and directions, money related framework.
Taxes in Aruba
Accounting principles/financial statements – Financial statements must be prepared annually. No specific financial reporting framework is required.
Principal business entities – These are the limited liability companies (NV, VBA and AVV), exempted AVV, general partnership, (private) foundation, limited partnership and branch of a foreign corporation.
Corporate taxation
Residence – A corporation is considered resident in Aruba for tax purposes if it is incorporated under the laws of Aruba or managed and controlled in Aruba.
Basis – Residents are taxed on worldwide income; nonresidents are taxed only on Aruba-source income. Foreign-source income derived by residents is subject to corporation tax in the same way as Aruba-source income.
Taxable income – Corporation tax is imposed on a company’s profits, which consist of business/trading income; passive income, such as dividends and interest; and capital gains. Normal business expenses may be deducted in computing taxable income, while additional incentives may apply.
Taxation of dividends – In principle, dividends received are taxed according to the regular taxation rules, although exemptions may apply (e.g. see “Participation exemption,” below).
Capital gains – Capital gains normally are taxed, unless the participation exemption applies.
Losses – Losses incurred by an individual company on a stand-alone basis may be carried forward for five years, in principle. The carryback of losses is not permitted.
Rate – 25%
Foreign tax credit – Foreign tax paid may be credited against Aruba tax on the same profits, but the credit is limited to the amount of Aruba tax payable on the foreign income.
Participation exemption – Dividends and capital gains received by an Aruban resident company from a participation in a domestic or foreign company are exempt under the participation exemption, provided certain conditions are met.
Incentives – An Aruba limited liability company may qualify as an imputation payment company (IPC). In such cases, the profit tax rate generally is reduced from 25% to 10% and the dividend withholding tax is reduced to nil.
Aruba also has several free zones that offer tax benefits.
Withholding tax
Dividends – A 0%, 5% or 10% withholding tax may be levied on outgoing dividends, although exemptions are available.
Other taxes on corporations
Payroll tax – Wage tax is levied on the employment income of an individual, and is a pre-levy to the personal income tax. The income is taxed under a schedular system.
Real property tax – An annual 0.4% “ground tax” is levied on the value of real estate, determined by the local tax authorities.
Social security – The employer is required to make pay- related social insurance payments on behalf of its employees.
Transfer tax – A 3% transfer tax is levied on the purchase of real estate up to AWG 250,000. Any real estate purchase exceeding this amount is taxed at 6%, with the purchaser being responsible for paying the tax.
Other – A 9.5% tourist levy is payable by tourists staying at hotels and resorts. Fixed amounts apply for time-share rentals. An environmental levy applies on all occupied rooms or units at fixed amounts, depending on the type of accommodation.
Anti-avoidance rules
Transfer pricing – Aruba respects internationally accepted transfer pricing guidelines and the arm’s length principle. Statutory transfer pricing documentation requirements are applied, and documentation should be retained in the taxpayer’s records.
Investing in Aruba
The strength and legitimate security of the Kingdom of the Netherlands
As a Member of the Kingdom of the Netherlands, Aruba is depending on its special legitimate and established status as a Member of this real exchanging nation inside the European Union.
One of the most astounding GDP per capita in the area
Aruba has one of the most astounding GDP per capita and one of the most astounding ways of life in the Caribbean area. The GDP per capita for Aruba was evaluated to be $24,400; among the most elevated in the Caribbean and the Americas. Aruba offers an entirely steady economy where to do your business.
Amazing Tourist Service Sector
The travel industry is the most dynamic segments in the economy of Aruba. The travel industry is in charge of 70% of Aruba’s GDP; which is one of the most elevated GDP in the locale. This is clear verification of the Excellency of the vacationer administration part in Aruba.
Profoundly taught, multi lingual and multi-social workforce
The workforce is profoundly taught and talks a few dialects. Aruba has a differed culture. As indicated by the Bureau Burgelijke Stand en Bevolkingsregister (BBSB), there are around ninety-two distinct nationalities living on the island.
Aruba has a high caliber of living is one of the most secure island in the Caribbean.
Fantastic framework
Aruba has fantastic streets, air terminals and ports in the Caribbean.
Alluring financial assessment impetuses
Aruba has made an alluring bundle for speculators and business people wishing to every one of the open doors Aruba offers to build up their business exercises. Aruba offers 3 uncommon Zones (Freezone Aruba, Green Zone and San Nicolas Zone). Besides, Aruba has likewise the ‘expat regeling’ for business people that need to come and set up in Aruba.
Organization of the Aruban Government
Aruba offers you an organization area as well as it offers you an association in for instance help with the advancement of the local market through association of territorial exchange missions.