Changes to free zone legislation
The State Ordinance Free Zones 2000 was enacted over 10 years ago and a decision has been made to introduce changes to improve the attractiveness of the free zone, without compromising any of the integrity aspects.
The free zone is an important instrument to attract foreign investors and diversify the Aruban economy. Aruba is an attractive location for foreign investment due to its geographic location, transportation network, attractive fiscal tariffs, safety and security, political stability, etc. The free zone is of great importance for positioning Aruba as a hub for Dutch companies, and the rest of the European Union, wishing to enter the Latin-American market.
In anticipation of formal changes to the law, the Minister of Finance, Communications, Utilities and Energy, Mr. Mike de Meza, has approved a policy document encompassing the following points.
The definition of approved service activities has been clarified. This brings the law in line with definitions used by other countries, and expands the possibilities. Services are the quickest growing sector in the free zone. The exclusion of financial services is unchanged.
Service companies are no longer required to have an office in the current designated free zones. This means that they can have an office elsewhere on Aruba, with approval from Free Zone Aruba (FZA) NV and the tax authorities, and taking specific rules into consideration.
The possibility to sell to the local market will be expanded. If a company has a special permit to sell to the local market, the sales to the local market may reach a maximum of 25% of the turnover (on a yearly basis). The percentage will not be reduced over the years, as is currently the case.
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