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Nikita Veremeev
31.10.2025 | 6 min read
Updated: 15.10.2026
The Aruba Exempt Company (AVV) is now a historical form. Since 1 January 2021, Book 2 of the Civil Code of Aruba (Burgerlijk Wetboek van Aruba, BWA) has applied, and a new AVV cannot be incorporated. Existing AVVs had three years to convert into a VBA or another legal form. Below: what the AVV was, how its regime ended, and which company forms and tax rules apply in Aruba in 2026.
What is AVV?
AVV stands for Aruba vrijgestelde vennootschap, the "Aruba exempt company", a company form under Aruba's former law. The fixed fee for AVVs was set by the Landsbesluit vast recht A.V.V. (AB 1988 no. 81).
The AVV's main feature was its tax treatment. Its profit was exempt from profit tax if the company carried on only activities from a closed list. Under the Landsbesluit aanwijzing vrijgestelde activiteiten (AB 2005 no. 88), these included holding shares, financing other companies, investing assets other than real estate, and licensing intellectual property. The same regime was also open to a VBA.
The rules were then tightened by decree AB 2020 no. 24, mostly from 1 January 2020. An exempt company may not earn income from intellectual property, and its core income-generating activities must take place in Aruba.
The practice of COREDO confirms that AVVs are especially in demand among clients implementing complex intellectual property licensing schemes and managing financial flows between European, Asian and Middle Eastern divisions. In one recent case, the COREDO team successfully structured an AVV for a large group, optimizing the tax burden on royalties and dividends while ensuring full compliance with international AML/KYC standards.
How the AVV regime ended
Book 2 BWA and the adaptation law, the Aanpassingsverordening Boek 2 BWA (AB 2020 no. 156), entered into force on 1 January 2021 (Landsbesluit, AB 2020 no. 172). That law added Art. 37cc to the Landsverordening overgangsbepalingen Nieuw BW. Since 1 January 2021, no company can be incorporated as an AVV or become an AVV by conversion (Art. 37cc(1)).
What the law required of existing AVVs:
- The Book 2 rules on the VBA apply to them, and they could use the AVV name only until their conversion (Art. 37cc(1) and 37cc(2)).
- Their articles had to be brought into line with Book 2 at the next amendment, but no later than within three years, by converting into a VBA or another legal form (Art. 37cc(2)).
- Throughout this time, an AVV had to be represented by an NV under Aruban law holding a trust office licence (Art. 37cc(4)).
An AVV that did not convert in time is subject to dissolution. If it was not entered in the trade register, it was dissolved by operation of law (Art. 37cc(9)). Any other such AVV is dissolved by the court at the request of the minister of justice or an official designated by the minister (Art. 37cc(7)). The court may give the company no more than six weeks to remove the grounds.
Which company forms apply in Aruba in 2026
How a VBA or an NV is incorporated
Today a company in Aruba is incorporated as a VBA (vennootschap met beperkte aansprakelijkheid, a limited liability company) or an NV (naamloze vennootschap, a public limited company). The NV is governed by Title 5 of Book 2 BWA, the VBA by Title 6. Both forms are incorporated by one or more persons by notarial deed (Art. 100(2) and 154).
The main steps include:
- Name: it begins or ends with the words VBA or NV and must not be confused with a name already in the trade register (Art. 102(1) and 151).
- Articles of association: they state the name, the company's purpose and its seat, which is Aruba (Art. 102(1) and 155(2)).
- Capital: the founders of a VBA declare that its equity on incorporation is not negative (Art. 155(3)). The founders of an NV declare that it is not lower than the amount of capital participation (Art. 101(2)).
- Beneficial owners: since 1 January 2023, a company's ultimate beneficial owners are reported to the trade register (Art. 12b Handelsregisterverordening, AB 2022 no. 105).
The deed of incorporation contains, among other things:
- The number and classes of shares placed on incorporation (Art. 101(1) and 155(1)).
- The details of the founders and of the persons taking up shares (Art. 101(1) and 155(1)).
- A balance sheet dated no more than three months before the deed if a contribution is made other than in cash (Art. 101(3) and 155(4)).
COREDO's experience has shown that careful document preparation and proactive interaction with the notary and regulators significantly reduce registration times and minimize the risk of refusal.
Resident director or legal representative
A VBA and an NV must at all times have a legal representative (wettelijk vertegenwoordiger). This is an NV incorporated under Aruban law and established in Aruba, whose statutory purpose is to represent companies and which holds the required licences (Art. 144(1) and 187(1)). The requirement does not apply if a director is a natural person resident in Aruba, or a legal entity with such a director (Art. 144(2) and 187(2)).
The legal representative keeps the shareholder register, makes filings with the trade register and tax returns, and maintains contact with the Aruban authorities. It is not a director (Art. 144(4) and 187(4)). Trust office licences are issued, and trust offices supervised, by the Centrale Bank van Aruba (CBA).
These roles are the basis of a company's corporate governance in Aruba. If a required legal representative has not been registered for a year, this is one of the grounds for dissolution of the company by the Chamber of Commerce and Industry. The Chamber dissolves a company when at least two such circumstances coincide (Art. 25(1)).
The COREDO team recommends integrating regular compliance audits and implementing AML/KYC procedures to timely identify risks and prevent violations. In one of COREDO's cases, a client faced a change in tax legislation that required rapid business restructuring and conversion of the AVV into another legal form.
Conversion of an AVV into another legal form
Converting an AVV was not a strategic choice but an obligation. The deadline was no later than three years after 1 January 2021, so it expired at the start of 2024 (Art. 37cc(2)). A new AVV cannot be obtained by converting another company (Art. 37cc(1)).
The process included:
- Amending the articles together with the conversion into a VBA or another legal form under Book 2 (Art. 37cc(2)).
- A notary check: no conversion is executed while even one of the circumstances listed in Art. 25(1) of Book 2 exists, such as unpaid trade register fees or unfiled accounts (Art. 37cc(6)).
- A merger or division only if the AVV is the acquiring party and at the same time becomes a VBA or an NV (Art. 37cc(5)).
- Payment of the AVV fixed fee until the conversion itself (Art. 37cc(11)).
In COREDO's practice, such conversions are often used to scale the business, enter new markets in Europe and Asia, and increase the company's investment attractiveness. For example, when converting from an AVV to a VBA, the structure becomes more flexible for attracting venture capital and working with investment funds.
These conversions are especially relevant in connection with legislative changes requiring the conversion of an AVV into one of the modern legal forms: VBA or NV.
What practical recommendations?
Who does Aruba suit after the end of the AVV? For profit tax, a company governed by Aruban law is always treated as established in Aruba (Art. 1(3) Landsverordening winstbelasting). The general profit tax rate is 22% (Art. 15(2)). Reliefs remain, but they are narrow:
- Exempt VBA: a VBA's profit is exempt if, for the whole financial year, its activities are limited to the list in the decree (Art. 2(c)). The list includes holding shares, financing and investing assets other than real estate.
- Real presence: the core income-generating activities of an exempt company take place in Aruba. It needs assets, enough full-time employees and operating expenses on the island (AB 2020 no. 24).
- Free zones: companies meeting the conditions of the Landsverordening vrije zones 2000 pay tax at a reduced rate for a set period (Art. 15(3)).
How to minimize risks in managing a company in Aruba
- Check the status of a former AVV in the trade register: whether it was converted, dissolved or is in liquidation.
- Keep the register up to date on directors, address, legal representative and beneficial owners, and file accounts on time (Art. 25(1)).
Comparison of AVV and corporate structures
| Company type | Status in 2026 | Profit tax | Representative in Aruba |
|---|---|---|---|
| AVV | Not incorporated since 1 January 2021, conversion deadline expired | Formerly exempt with a closed list of activities | NV with a trust office licence, always |
| VBA | In use (Title 6 of Book 2 BWA) | 22% or exemption under Art. 2(c) | Legal representative if there is no resident director |
| NV | In use (Title 5 of Book 2 BWA) | 22% | Legal representative if there is no resident director |
Aruba on the EU list and long-term consequences
Aruba is in neither Annex I (the list of non-cooperative jurisdictions) nor Annex II of the EU Council conclusions of 9 October 2026 (document 13854/26).
COREDO's experience shows that a properly structured AVV provides significant tax savings, reduces operating costs and increases business transparency for banks and investors. However, it is important to consider the long-term consequences: changes in international tax law, increased requirements for beneficial ownership transparency, and the need for regular review of the corporate structure.
Conclusion
The Aruba Exempt Company (AVV) no longer suits new projects. Since 1 January 2021 it cannot be incorporated, and the conversion deadline for existing AVVs expired at the start of 2024. Today business in Aruba is done through a VBA or an NV under Book 2 BWA.
Profit tax is 22%, and a VBA exemption is possible only with a closed list of activities and a real presence on the island. If your group had an AVV, check its status in the trade register and the consequences for reporting.
If you are considering Aruba for a holding or financing structure, the COREDO team will help assess the jurisdiction, compare it with alternatives and prepare the documents.