Aruba, a prosperous Caribbean island with a strong economy based on tourism, provides investors and entrepreneurs with a range of legal company forms. Because it affects responsibility, taxation, and operational flexibility, selecting the appropriate structure is essential. Knowing Aruba’s corporate structure guarantees compliance and strategic expansion, regardless of whether you’re a foreign investor or a local business owner. Here is a thorough examination of the main business structures that Aruba offers.
Sole proprietorship (eenmanszaak)
Owned and run by a single person, this is the most basic type of business in Aruba. It is perfect for freelancers or small enterprises and requires very little registration. All debts and duties, however, are directly owed by the owner. Profits are taxed as personal income as the owner and business are legally the same, which makes it simple but dangerous.
General partnership (vennootschap onder firma – VOF)
In a general partnership, two or more people operate a firm under a single legal body. Each partner shares earnings and losses and provides cash, resources, or talents. All partners have unlimited responsibility, which means that personal assets may be utilized to pay off corporate obligations even though it permits flexibility. To specify duties and responsibilities, a partnership agreement is advised.
Limited partnership (commanditaire vennootschap – CV)
There are two kinds of partners in this structure: general and limited. Limited partners only contribute cash and are solely liable for their investment, whereas general partners run the company and have unlimited responsibility. For people who wish to invest without becoming involved directly, it’s a fantastic choice. To preserve liability protection, limited partners must refrain from managing responsibilities.
Private limited liability company (vennootschap met beperkte aansprakelijkheid – VBA)
The most popular option for companies looking for limited liability protection is a VBA. It features a flexible organizational structure and requires a minimum of one shareholder. Shareholders’ assets are protected since their liability is capped at their investment. A VBA can enter into contracts and possess property on its own as it is a distinct legal entity from partnerships.
Public limited liability company (naamloze vennootschap – NV)
An NV is intended for larger businesses that could go to the government for funding. It needs several shareholders and a minimum amount of capital. Public trading of shares enables significant capital growth. Similar to the VBA, an NV has limited shareholder liability and is a distinct legal organization. Stricter rules, corporate governance specifications, and financial transparency are all part of it, though.
Foundation (stichting)
Although it can also be utilized as a corporate organization, a foundation is a legal body that is usually employed for charity or non-profit reasons. It is run by a board but has no shareholders. To further their goals, foundations may do commerce. This structure is frequently employed for charitable endeavors, estate planning, and asset protection.
Association (Vereniging)
An association is a collection of people engaged in cultural, social, or recreational endeavors who are working towards a shared objective. Associations have members who may vote and have a say in decisions, unlike foundations. They are allowed to do business, but they have to put the money they make back into their cause. For clubs, unions, and community organizations, this format is perfect.
Branch office of a foreign company
Instead of creating a local corporation, foreign companies wishing to conduct business in Aruba can set up a branch office. The international parent firm is still entirely responsible for the branch’s activities even if this permits businesses to operate in Aruba. Multinational firms testing the Aruban market can benefit from it, but there are compliance constraints.
Trust (Aruban trust)
Aruba has a trust structure that is mostly utilized for estate planning and asset protection. A trustee manages assets on behalf of beneficiaries under a trust, in contrast to other commercial organizations. Instead of being utilized for business activities, this structure is frequently employed for asset management. Because it offers legal protection and anonymity, it appeals to wealthy people.
Cooperative society (coöperatie)
A firm run and owned by its members, who split earnings and decision-making duties, is known as a cooperative society. Small companies, service providers, and agricultural associations favor this strategy. Members have little responsibility, but democratic decision-making procedures may make operations more complicated. It encourages cooperation and sustainable economic growth.
Conclusion
Whether you’re a global firm, an investor, or an individual entrepreneur, Aruba’s many business forms may meet your demands. Choosing the best structure relies on operational objectives, taxation, and liability issues because each has distinct benefits and legal ramifications. Aruba’s corporate environment can be effectively navigated by speaking with a local legal specialist.
You may also find these articles helpful
Guide on company registration in Aruba
Types of Legal Business Structures in Mozambique
Types of legal business structures in Lesotho
