Aruba
Executive Summary
Aruba is a small (75 sq m) island off
Venezuela with a population of approx.
103,000 (2009 est). It separated from
the Netherlands Antilles in 1987; they
both still form part of the Kingdom
of the Netherlands. The legal, political
and administrative systems are largely
modelled on Dutch originals, but there
has been some common law influence on
the offshore regime. Government, Judiciary
and Central Bank are established in
Oranjestad, the capital. Dutch is the
official language, but English is often
spoken; the local language is Papamiento,
a Creole dialect. The local currency
is the florin, fixed at 1$US = 1.79
Af. There is a well-connected airport
near Oranjestad.
Aruba is an associated territory of the
EU. The Aruban economy is very open and
is highly dependent on tourism and offshore
financial services. Most goods are imported
since there are few natural resources.
An important refinery was shut for a while
but is now open again, mostly for trans-shipment.
GDP
per head was US$21,800 at PPP by 2004,
making it one of
the highest levels in the region; economic
fundamentals are good and unemployment
is low enough to create labour shortages.
Local taxes are quite high for residents,
but there is a well-developed offshore
sector which originated in World War Two
as a haven for Dutch companies fleeing
the German occupation of the Netherlands.
Many financial links are to the Netherlands
in one direction and to South America
in the other. The financial and professional
infrastructure is well-developed, with
a Dutch (civil law) cast. Banking, licensing,
insurance and holding companies are the
main offshore sectors. The tax burden
on most offshore activities is light but
not minimal. There is a Free Zone which
has successfully attracted manufacturing
companies with markets in the EU and the
Americas.
Aruba has a tax treaty only the Netherlands,
which gives access to the many Dutch tax
treaties and good withholding tax regime.
There is no banking secrecy legislation
as such, but beneficial ownership of offshore
companies does not have to be disclosed.
The jurisdiction normally responds to
requests for help on tax matters, although
local professionals do what they can to
maintain confidentiality.
A
New Fiscal Framework introduced alongside
a new Dutch Tax Treaty (BRK) in response
to international pressure as from 1st
July 2003 abolished the distinction between
offshore and onshore companies, but installed
a generous participation exemption scheme
which in effect maintains previous tax
privileges for non-Aruban business activities.
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