Aruba Tax Authorities – Tax Incentive Policies

December 18, 2025

The Aruba Tax Authorities have announced two separate Ministerial Decrees providing for two very different Tax Incentives as per January 1, 2026. The first is the Ministerial Decree regarding the Start-up Tax Incentive Regime in the Profit Tax and the second is the Ministerial Decree regarding Tax Incentives in Profit Tax, Dividend Withholding Tax, Real Estate Transfer Tax and Turnover Tax for the economic development of Oranjestad and San Nicolaas.

Tax Incentives Start-up businesses

The Government of Aruba promotes economic diversification by supporting promising sectors such as the knowledge economy, agriculture, logistics, circular economy, creative industries, and niche tourism.

Following recommendations from the Commission Economic Recovery (2023) and the Landspakket Aruba Implementation Agenda, Aruba introduces a Startup Scheme (in Dutch: “Startersregeling”) to remove fiscal barriers for newly established companies. The scheme focuses on easing the startup phase through targeted tax incentives in Corporate Income Tax and Turnover Tax.

Eligible Companies
The scheme applies exclusively to new companies that:

• Are incorporated and established in Aruba on or after 1 January 2026
• Are subject to Aruba corporate income tax
• Are not Free Zone companies
• Operate independently (no restart, continuation, or restructuring of an existing business)
• Are registered with:
  a. The Chamber of Commerce
  b. The Social Insurance Bank (SVb)
  c. The Tax Department (Departamento di Impuesto) within one month of incorporation

• Hold a business license confirming activities in a promising sector, which are defined as tourism, knowledge economy, logistics, agriculture, circular economy (recycling, reuse of waste etc.) and creative industries (art, music, graphic design photograpy, webdesign etc.)

Substance Requirements (Real Presence in Aruba)
Companies must demonstrate real economic activity in Aruba. The core income generating activities need to be in Aruba, which needs to be substantiated by:

• Adequate tangible fixed assets located in Aruba
• A sufficient number of qualified full-time employees (directly or indirectly employed locally)
• Adequate annual local operating expenses matching the scale and nature of activities

Tax Incentive – Corporate Income Tax
All start-up companies will receive an exemption from Corporate Income Tax of AWG 50.000 per year for the first 5 financial years after incorporation if certain conditions are met. The conditions include:

• An investment requirement; At least 15% of annual gross turnover must be reinvested in Business assets (machinery, ICT, business-use vehicles), Professional training of employees or expansion or improvement of business premises.
• During the 5-year period no dividend distributions are allowed to the shareholders, nor is the company allowed to provide for shareholder’s loans
• Depending on the amount of turnover, the company needs to employ a minimum of 1 to 3 employees

Lastly, the tax incentive only applies to active operating companies and not to holding entities and artificial divisions of companies are not allowed, nor is inflation of costs through affiliated entities.

Tax Incentive – Enhanced Investment Deduction
The Investment deduction (in Dutch: “Investeringsaftrek”) for tax purposes increased from 10% to 20% of the investments in the first 5 financial years of the start-up. The deduction applies to investments in new business assets with annual investments exceeding AWG 5,000. Please note that the disinvestment additions (in Dutch: “Desinvesteringsbijtelling”) for these assets will also be applied against the higher rate of 20%.

Tax incentive – Partial Deduction of Start-up Loan
To incentivize investments in the start-up phase of companies, 50% of the principal amount of new business loans is deductible for Corporate Income Tax purposes in the year the loans are provided with a maximum deduction of AWG 30,000 per year. Please note that loans must be provided by a supervised Aruban credit institution or investment fund, and loans must be granted on arm’s length terms

Tax Incentive – Market Value Salary
For shareholders with a substantial interest who also work for the company the normal conditions for the market value salary do not apply during the first 5 financial years. Instead, the market value salary must be at least the statutory minimum wage applicable on 1 January of the relevant year.

Tax Incentive – BBO, BAVP and BAZV Relief
During the startup period of the first 5 financial years of the company, the small business exemption for businesses with a turnover of less than AWG 50.000, normally only applicable to individual entrepreneurs will also be applicable to qualifying startups

Tax Incentives Oranjestad and San Nicolaas

The Government of Aruba introduces temporary tax incentives to stimulate urban redevelopment, renovation, housing development, and adaptive reuse of buildings in the city centers of Oranjestad and San Nicolas. The goal is to revitalize both cities, address vacant and outdated buildings, and support sustainable economic growth.

Tax Incentive – Corporate Income Tax
The tax incentive provided is the application of the Exempt Company regime in the Corporate Income Tax for a period of 10 years (1 Jan 2026 – 31 Dec 2035) on income directly related to qualifying redevelopment income.

The conditions further include requirements for the assets of the companies applying the Exempt Company regime to include the legal and economic ownership of properties in the designated areas and a prohibition of holding excess cash items other than used for the development (up to 20% of the value of the property), requirements for the minimum investment in the property (the highest of Afl 500.000 or 50% of the value of the property) and commencement of the redevelopment needs to start within 3 years of the 10-year period. If conditions are breached, the exemption is revoked retroactively.

If the Exempt Company regime cannot be used, companies may apply accelerated depreciation of redevelopment and renovation costs up to AWG 500,000 in the same period.

Tax Incentive – Dividend Withholding Tax
The Exempt Company regime also extends to the Dividend Withholding Tax allowing for full exemption on dividends paid during the tax-exempt period. Dividends paid after the exemption period are fully taxable.

Tax Incentive – Real Estate Transfer Tax – Turnover Tax
The transfer of real property in the period in which the Exempt Company regime is applied is also exempt from Real Estate Transfer Tax, as is the transfer of shares in a real estate company. And if the redevelopment qualifies as a “new property” the transfer of the property is also exempt from Turnover Tax.

Anti-Abuse Measures
Please note that if the status of the Exempt Company regime is revoked for Corporate Income Tax purposes, this also applies to all other incentives (apart from the accelerated depreciation).