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Financial Center
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Aruba Financial Center is the regulatory authority of the non bank
financial sector. The Center is a government entity that incorporates all
limited liability companies and issues permits for these companies. The
Center also issues permits for companies that act as a legal
representative and/or director of companies which ultimate beneficial
owner does not reside in Aruba. The Center is an advisory body to the
Minister of Finance and Economic Affairs on policy matters regarding the
non bank financial sector and drafts legislation in that respect. |
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In cooperation with the private sector
the Center develops new financial services and legal entities. The
latter has resulted in new legislation, the so called New Fiscal
Regime, that was introduced January 1, 2003 in order to position Aruba
as an international financial center that fully complies with OECD's
standards of transparency and exchange of information.
New Fiscal Regime Aruba (NFR)
As a result of the introduction of the New Fiscal Regime Aruba has
no longer an offshore regime (grandfathered until 2007/2008). As of
July 1 of 2003 no more (low tax) offshore NV's have been established.
Commitments have been made to the OECD that the other offshore entity,
the AVV or Aruba Exempt Company, will be amended before the end of
2005. The amendments will for the major part relate to transparency
and the requirement of a yearly audited financial statement.
Imputation Payment Companies (IPC)
Simultaneously, an imputation regime has been introduced which is open
to entities that are engaged in listed activities e.g. hotel
exploitation, holding, finance, insurance, leasing, licensing,
music/film industry and aviation, whether carried out onshore or
offshore. To obtain neutrality between onshore and offshore
shareholders of these so-called Imputation Payment Companies (IPC),
Aruba has opted for actually paying out the imputation credit directly
to the shareholders.
IPC's are subject to the standard income tax rate of 35%. Each
qualifying dividend payment will entitle the shareholder of an IPC to
an imputation payment of 33/65 of the dividend. Both the actual
dividend payment and the imputation will be subject to a dividend tax
of 10% (5% for quoted companies), which may result in a combined tax
burden of 11.8% (or 6.9% if the 5% dividend tax applies).
For more particulars on the financial services contact:
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