Aruba, formerly forming part of the Netherlands Antilles, became constitutional autonomous within the Kingdom of the Netherlands on January 1, 1986.

The corporate law of Aruba is in principle based on the corporate law of the Netherlands. Effective July 1, 1988, Aruba created the possibilities for the incorporation of zero tax companies, officially known as the "Aruba Vrijgestelde Vennootschap" (A.V.V.), "Aruba Exempt Corporation" (A.E.C.) or "Sociedad Exenta Aruba" (S.E.A.).

However, as per January 1, 2006 Aruba introduced a revised tax regime for these companies. It changed the exempt company (AEC) to a fully taxed company. To accommodate existing AEC's, 2 alternatives are being proposed: an AEC can perform certain activities exempt from profit and dividend withholding tax, or it can be considered transparent for Aruba tax purposes. AEC's that perform exempt activities will also qualify for an exemption of dividend withholding tax when distributing dividends to shareholders.

If a company performs non-qualifying activities, it will forfeit the exemption from profit and dividend withholding tax on all its activities. Qualifying activities are: finance, holding, portfolio investment and IP licensing. A fifth exemption activity, licensing of aircrafts and / or ships, is being considered.

1. Finance activities: The financing of enterprises and corporations, including related parties, not being a
   credit institution.
2. Holding activities: Holding of shares, equity or other rights of participation.
3. Portfolio Investment: Investment of capital, excluding real estate.
4. IP Licensing activities: Licensing intellectual and industrial property rights and similar capital rights or usage
   rights according to the law of Aruba and according to the law of a third country.

Rules and Regulations
• Being an offshore company, the AEC may not conduct business in Aruba other than those activities, which
   are necessary in connection with the maintenance of its office in Aruba.
• The AEC may conduct all legal business with the exception of banking activities, insurance company
   activities or other activities which would make it a credit institution.
• The AEC may transact all banking business from its Aruba on-shore and off-shore bank accounts.
• The AEC must have its registered office in Aruba and must have a Registered Agent in Aruba.
• The Board of Directors may consist of one or more managing directors. This can be an individual who is a
   non-resident of Aruba or a corporate Managing Director

Incorporation
The AEC is formed by notarial deed. Prior to the incorporation, a draft of the deed of Incorporation in the Dutch language must be approved by the Minister of Justice. When this requirement is met, the company can be incorporated within one or two days, and must be registered with the Chamber of Commerce and Industry of Aruba.

The Deed of Incorporation must contain:
• the name of the company which must begin or end with the words "Aruba Vrijgestelde Vennootschap"
  either in full or abbreviated to A.V.V., however, in it’s transactions with foreign business relations the
  company may use A.E.C. or S.E.A.
• the name and address of the first Managing Director
• the name and address of the Registered Agent
• the authorized capital and the shares subscribed for with a minimum of one share.

Advantages Summary
• Limited liability company
• AVV is not subject to corporate income tax and dividend withholding tax in Aruba in case of qualifying
  holding, financing, investment or licensing activities
• May opt for treatment as a partnership for tax purposes, thus providing great international tax planning
  opportunities

Contact details
Hemley Management Services N.V.
Engelandstraat 23
Oranjestad, Aruba
Tel:   +599 9 46 23 700
Fax:   +599 9 46 23 970
Email: aruba@corpag.com