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20th of August 2017
   
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Forming a Company

In Aruba the 2 most common legal entities are:
A - the NAAMLOZE VENNOOTSCHAP (NV)
B - the VENNOOTSCHAP MET BEPERKTE AANSPRAKELIJKHEID (VBA)
A)  INCORPORATING THE NAAMLOZE VENNOOTSCHAP (NV) 
In Aruba, the Naamloze Vennootschap is a legal entity (corporation) and must be established by at least two persons (legal or moral), who are by law designated as the founders. The articles of incorporation, including the bylaws of the N.V., must be drawn up in the Dutch language and executed before a civil law notary.

Founders
The founders are the initial shareholders. Other shareholders can also participate in the issued capital at the time of incorporation. There is no legal requirement as to nationality or residency of the founders and or shareholders. Representation can take place by proxy. If a non-resident wishes to establish a N.V., a notary office or a law-office in Aruba can take care of the incorporation.

Articles of incorporation
The articles of incorporation must contain:
  1. The name of the N.V., which may be in any language, provided that it is composed of Latin characters. The name should either begin or end with the words "Naamloze Vennootschap" or the abbreviation thereof: "N.V.". It is to one’s discretion to choose the name of the company, but prior to incorporation the name must be checked and approved by the local authorities;
  2. The statutory seat, which must be situated in Aruba;
  3. The object clause of the N.V.;
  4. The authorized capital, which must be at least Afl. 50,000;
  5. The issued capital must be at least Afl. 10,000 and at all times at least one fifth of the authorized capital;
  6. The par value of shares;
  7. The number of shares for which each of the founders and eventual third parties have subscribed in the issued share capital, and the amount paid-up on those shares at the time of incorporation;
  8. The name(s), birth date(s), birthplace(s) and address(es) of the initial managing director(s) of the company.
Capital Requirements
There are no other legal requirements as to the debt/equity ratio than the requirement that participation of the founders in the issued share capital equals to at least one fifth of the authorized capital. The guidelines have fixed the one fifth of the authorized capital at Afl. 10,000, the so-called minimum issued capital. According to the State Ordinance on the supervision of the credit system, the issued share capital of a bank or a mortgage bank must be at least Afl. 5,000,000.

Procedure
The articles of incorporation are filed with the Minister of Justice, together with a request for obtaining the Ministerial Declaration of No-Objection. The N.V. exists as a legal entity from the date it meets the following two constitutive requirements:
  1. a declaration of no-objection has been granted by the Minister of Justice; and
  2. The articles of incorporation have been executed before a civil law notary.
The civil law notary who has been in charge with the execution of the articles of incorporation must place an announcement as to the incorporation of the N.V. in the Official Gazette of Aruba. Furthermore, the managing director(s) of the N.V. must register the N.V. in the Commercial Register, which is supervised by the Chamber of Commerce and Industry, and deposit a true copy of the articles of incorporation at said Chamber.

Licenses
To operate a business, the N.V. must apply among others for the following licenses:

  1. A business license allowing the N.V. to establish a business. An application thereto must be directed to the Minister of Economic Affairs;
  2. A director's license for each of the N.V.'s foreign managing directors or legal entity. An application thereto must be directed to the Minister of Economic Affairs;
  3. A residence and work license for any non-resident, who intends to take up residence in Aruba, to be employed by the N.V. An application thereto must be directed to the Minister of Justice.
Costs of Incorporation
The main expenses incurred in forming a company are:

  1. Civil law notary's fee: depending on the authorized capital and the work involved;
  2. Stamp duty on the ministerial declaration of no-objection on the articles of incorporation and the registration of these articles: approximately Afl. 300;
  3. Initial registration in the Commercial Register payable to the Chamber of Commerce and Industry: depending on the paid-up capital;
  4. Publication in the Official Gazette: approximately Afl. 40;
  5. A business license: Afl. 400; (pre-payment) 
  6. Each director's license: Afl. 400. (pre-payment)
  7. For complete list of other fees, if situation applies, see 'Legesbesluit DEZHI 2009' (Download Documents)

B) VENNOOTSCHAP MET BEPERKTE AANSPRAKELIJKHEID (VBA) 

Vennootschap met Beperkte Aansprakelijkheid (VBA) is the second form of legal company. As of January 1st, 2009, Aruba introduced a new legal form called the Vennootschap met Beperkte Aansprakelijkheid (VBA), in English the Limited Liability Company (LLC) and in Spanish Sociedad de Responsabilidad Limitada (SRL), next to the existing entities NV and AVV. The VBA is a legal entity which is established by a notarial deed and may have as few as one incorporator.

The VBA is a flexible and modern legal entity enhancing the Aruban investment climate and aimed at developing its financial services sector. It complies with Organization of Economic Cooperation & Development (OECD) and Financial Action Task Force (FATF) stipulated international standards and norms.

The incorporator(s) may choose to keep the VBA as simple or as complex as deemed necessary. This entity, with statutory seat in Aruba, acts as a vehicle for business developments over time without requiring any change to its legal status, as the VBA Ordinance provides stipulations for (inter) national mergers, conversions or splitting.

Incorporating the VBA 

The VBA is incorporated by a Civil Notary, who provides the Deed of Incorporation. A draft of the Deed of Incorporation has to be submitted to the Minister of Justice together with a request for a Ministerial Declaration of No Objection. Once this has been granted and the notary has duly executed the Deed of Incorporation, the VBA legally exists.

The Deed of Incorporation may be executed in the languages Papiamento, Dutch or English. In case another language is desired, it is mandatory to provide a sworn translation in Papiamento or Dutch next to the original deed.

The Deed of Incorporation shall include:

 - Articles of Incorporation.

-   Name, date of birth, place of birth and residence address of incorporator(s).

-  Name and address of the legal representative, if applicable.

-  Name and address of (first) director(s). 

- The type and amount of shares issued as well as the names, address and personal data ofnatural and legal persons holding shares, and the amount paid up on the shares.

 The Articles of Incorporation may be as extensive as the incorporators consider necessary. They must include at least the name, object and seat of the VBA. The Deed of Incorporation must be duly signed by all incorporators & shareholders. The Civil Notary is required by law to register theVBA in the public Trade Registry held at the Aruba Chamber of Commerce.

Business License 

According to the Ordinance on the establishment of businesses, all corporations need a business license in order to conduct business in Aruba. After incorporation the VBA can apply for a business license which is issued by the Department of Economic Affairs after the Chamber has been heard.

Rules & regulations (operating agreement) 

With the exception of the name, seat & object, the incorporator(s) can choose which items to include in the Articles of Incorporation. When deciding to exclude specific items from the Deed of Incorporation or Articles of Incorporation, rules & regulations (operating agreement) are to be included in, or attached to the notarial deed. Formulation by a notary is optional.

The shareholders establish and amend the regulations which must be filed at the Trade Registry. The regulations are not public information, unless authorized by the VBA.

Representation & Liability 

The VBA must be represented at all times by at least one managing director. Authorizations and restrictions are stated in the Articles of Incorporation, or in the rules and regulations.The managing directors are responsible for complying with obligations towards the Chamber. All modifications in the company data must be registered at the Trade Registry.

At least one of the managing directors must be a resident of Aruba. In case all the directors are non-residents, the VBA must also appoint a corporation, established and located in Aruba, whose objects include the representation of VBA’s, and is in possession of the applicable business license, as its legal representative.

One of the characteristics of the VBA is the possibility to annul a legal act which was carried out by the corporation when the corporation oversteps its object and the counterparty was aware of it. Only the VBA can request such an appeal in regard to this annulment and it is not possible to request an appeal of such stipulation in case the articles of incorporation exclude this possibility.

The VBA also allows flexibility in its management structure. Next to the common One Tier model, the corporation can also opt for the One Tier Anglo-Saxon model or the Two Tier model.

Responsibilities of the legal representative

 The legal representative is not a managing director, but is appointed with limited responsibilities in the absence of the directors residing in Aruba. The responsibilities include:

-  maintaining the Shareholders’ Register;

-  documents registration at the Trade Registry;

-  tax filing;

-  issuing of share certificates;

-  license applications;

-  maintaining contact with local authorities.

 

Issued shares 

One of the advantages of the VBA is that it does not require a minimum amount of authorized capital for incorporation.

The choice to have shares in the VBA or not is stated in the Articles of Incorporation. According to the law, shares are transferable, but this transferability of shares may be restricted or prohibited by the VBA’s Articles of Incorporation. Shares can be issued with or without nominal value, right of profit and/or to vote. The shares may be stated in a currency other than the Aruban florin.

 Annual financial statement 

The managing director(s), or the legal representative(s), is/are legally required to file the annual financial statement at the Chamber within 8 days after the Board’s approval. The annual financial statement should be ready within 8 months after the financial year is completed. Under exceptional circumstances, this term may be prolonged by max. 6 months by the shareholders.

Shareholders, directors and supervisory board members, if applicable, shall all sign the financial statement (art. 36.1 and 36.2 lvVBA). The financial statement is not public information, unless explicitly authorized by the corporation.

 

The Aruba Chamber of Commerce and Industry
The Aruba Chamber of Commerce and Industry was instituted by law in 1930. Its main objective is to promote the collective interests of commerce and industry. This is pursued through its advisory activities and the administration of the Commercial and Foundations Registers, which have been entrusted by law to the Chamber. The Board of the Chamber consists of nine members. To become eligible for membership of the board one must be 25 or more years old, have the Dutch nationality and must have been a resident of Aruba for the last two years.

Commercial Register
Registration in the Commercial Register is mandatory for all enterprises conducting a business in Aruba. The Commercial Register is under the supervision of the Chamber of Commerce and Industry and is open to public. The Register contains detailed information on the name of the company, trade name if any, the registration number, the objectives, date of establishment, the authorized capital (only for corporations), owner or management, the directors and proxies. Registration in the Commercial Register is subject to an initial fee and a subsequent annual contribution. The initial fee is based on the paid-up capital and the annual contribution is collected on the company's invested capital.

Initial fee and annual contribution due to the paid-up capital or invested capital (Afl.).

Paid-up or invested capital 

MinimumMaximumInitial feeAnnual contribution
5,0009696
5,00010,0009696
 10,000 25,000 9696 
 25,000 50,000120120 
50,000100,000165156
100,000200,000210175
200,000500,000350245
500,0001,000,000700280
1,000,0002,000,0001,500600
2,000,0003,000,0001,500750
3,000,0004,000,0001,500900
4,000,0005,000,0001,5001,125
5,000,00010,000,0001,5001,275
 10,000,000 ---2,500 2,250
* fees are subject to change.
Source: Chamber of Commerce and Industry Aruba.

Limited liability companies with an authorized capital of more than Afl. 50,000 in bearer shares and companies with bearer bonds or limited liability companies operating as financial institutions or insurance companies are required to file their annual financial statements with the Commercial Register.
The Commercial Register carried at the end of June 2009 approximately 13,186 active companies. Of this total about 85% are locally operating companies and the other 15% are so-called offshore companies.

The Chamber of Commerce and Industry can:
  1. Provide the government with information, advice and recommend on any matter concerning the business community;
  2. Assist the business community with registration in the Commercial Register. According to the Commercial Register Ordinance all businesses operating in Aruba must be registered in the Commercial Register of Aruba, and all changes in the registered data must be submitted to this Register;
  3. Assist with a summary of a business, containing the most detailed information of the registered enterprise;
  4. Endorse certificates of origin, such as EUR-1 certificates;
  5. Provide declarations or letters of recommendation, issued in Dutch, English, or Spanish, to be used by businessmen both locally and abroad related to their business interest;
  6. Assist with information and guidance with regard to the business community in Aruba;
  7. Conduct company and trade name checks;
  8. Provide all other information from its data bank and library, such as addresses and business information on international commerce, foreign industries, products, international exhibitions, etc.
For more information, please contact:
Chamber of Commerce and Industry Aruba
J.E. Irausquin Boulevard 10
Aruba
Tel: 297 582 1566
Fax: 297 583 3962
E-Mail:
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Website: www.arubachamber.com