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Aruba, which is home to the best beach in the Caribbean and the second best beach in the world, is an ideal place to vacation and invest, even as a foreigner. Aruba is an autonomous Caribbean country in the Kingdom of the Netherlands, along with Curacao, Sint Maarten, and the Netherlands. This gives the island a solid legal system that guarantees all your rights. Aruba’s economy is an open, market-driven economy. Regarding taxes, the island offers competitive rates in the region for both residents and non-residents alike.

Taxes in Aruba

There are different types of taxes in Aruba according to the economic transaction that you’re carrying out. However, the details of each tax are subject to periodic changes and updates. These are the five main types of taxes found on the island:

• Personal Income Tax: Personal income tax is applied to the income of Aruba residents. The tax is calculated based on a progressive table that goes from 8.95% on the lower end of the spectrum to 41.4% for the highest incomes.
• Corporate Income Tax: Aruba’s corporations are subject to corporate income tax. The tax rate is 28.5% for local companies and 25% for international companies.
• Value Added Tax (VAT): Value Added Tax applies to most sales and services in Aruba. The standard VAT rate is 9%.
• Real Estate Tax: Real estate tax applies to real estate property in Aruba. The tax rate is 0.4% of the value of the property.
• Real Property Transfer Tax: Real property transfer tax is levied when a property is sold in Aruba. The tax rate is 6% of the value of the property.

Taxes on Foreigners

Foreign residents in Aruba pay the same taxes as local residents based on their income and assets. In other words, foreign workers and their income will be subject to the personal income tax and other taxes imposed by Aruba. In addition, foreigners who purchase real estate in Aruba will be subject to the real estate tax and real estate transfer tax, just like local residents.

However, in some cases, foreigners may be exempt from certain taxes based on international tax agreements. For example, if a foreigner works in Aruba but does not reside on the island, they may be exempt from personal income tax in Aruba and pay taxes in their home country. In addition, foreigners who have entered Aruba with a digital nomad visa are exempt from taxes during their stay on the island.

Taxes for Foreign Investors

Aruba encourages foreign investment due to its great potential for economic activity and tourism. Many business people around the world choose the island not only as a vacation paradise but also as a place to start a family or even retire. The taxes for foreign investors in Aruba are:

Policies Implemented by Aruba to Attract Investors

Aruba’s tax system is designed to attract foreign investors and encourage the country’s economic development. There are currently a large number of foreign investors on the island, and the number of investment opportunities is increasing.

What incentives does Aruba offer to encourage foreign investment?

Aruba is an investor’s paradise, and the government has been actively promoting the country as a prime location for foreign investment. Here are some of the incentives that Aruba offers to encourage foreign investment:

• Fiscal Incentives: There is a tax holiday for up to ten years for companies in certain sectors, reduced import duties for capital goods, and tax exemptions for certain investments.
• Skilled Workforce: Aruba has a highly skilled, multilingual workforce. The country’s education system emphasizes the importance of languages, making it an ideal location for companies with a global reach. In addition to speaking the native language of Papiamento, a large percentage of the residents also speak English and Spanish.
• Free Zones: Aruba has designated several areas as “free zones”, where foreign investors can establish businesses and enjoy tax exemptions on import duties and other taxes.
• Investment Protection: Foreign investors are protected by a stable and transparent legal system in Aruba. The country is a member of the International Centre for Settlement of Investment Disputes (ICSID) and has bilateral investment treaties with several countries.
• Business-Friendly Environment: Aruba provides streamlined procedures for registering companies, obtaining permits, and establishing licensing.

Why is Aruba the best investment option compared to other countries in terms of tax matters?

Aruba is strategically located between North and South America, making it an ideal location for companies seeking to establish a presence in the Americas. In terms of tax matters, both residents and foreigners can pay the same taxes without nationality affecting the rates. Additionally, certain taxes may not apply to foreigners if there is an international tax agreement.

Furthermore, the tax rates are quite competitive for investors, especially the income tax rates. Another of Aruba’s main advantages for investors, in terms of taxes, is that there are international tax treaties with other countries that prevent double taxation and protect foreign investment. It is also a signatory to the Caribbean Multilateral Convention on Tax Cooperation. This is why Aruba is undoubtedly the best destination in the Caribbean for investors.

Residence Permits for Investors in Aruba

Aruba offers several types of residence permits for foreign investors who wish to establish a company or invest in the country. These permits are temporary residence permit for investors, temporary residence permit for foreign workers, residence permit for investment, and permanent residence permit.

What do I need to qualify for an investor visa?

To qualify for an Aruba investor visa, you must meet certain requirements, such as:

• You must make a significant investment in Aruba, and this investment must contribute to the economic development of the country. To find out the minimum amount of this investment, you must contact the competent tax authorities.
• You must have a verifiable source of income that covers not only the investment to be made but also your cost of living in Aruba.
• You must not have a criminal record.
• You must have a solid and viable business plan.
• You must comply with Aruba’s tax and legal obligations.
• If you are planning to establish a franchise, commercial premises, or company on the island, you must adhere to all the legal requirements for registration.

As you see, you can make great earnings in Aruba if you make a wise investment. Whatever your plan is, the island offers you a very safe investment environment. Our commitment will always be to the economic growth of you and the island. So, go ahead and invest in this happy island!

To start your journey as an investor in the Caribbean, we recommend that you do so by investing in a property with high levels of security and cost-effectiveness in both the medium and short term.

In addition, the growing real estate industry in Aruba is one of the most solid in the Caribbean. You can even count on financing for your investment, even if you are a foreigner. If you’re thinking of investing in Arubian real estate, feel free to contact us and learn about all the available properties that we offer. Currently, our most promising projects are Porta Al Sole and Nanki in Rodgers Beach Aruba. Both have enviable benefits and privileged amenities for the enjoyment of you and your family.

Stay tuned for our next updates to find out more information and tips for making the most of living your dream life on the island of Aruba.