Parliament Approves New Form of Limited Liability Company - International Law Office

International Law Office

Company & Commercial - Aruba

Parliament Approves New Form of Limited Liability Company

April 06 2009


In September 2006 the Aruban government presented its plan for a new form of Aruban company, known as a vennootschap met beperkte aansprakelijkheid (VBA), a form of limited liability company. On January 1 2009 Parliament finally approved legislation on the new corporate entity. Simple and flexible, it promises to be particularly useful for tax planning. Its main features are as follows:

  • A VBA is a legal entity with share capital, but it can also fulfil the role of a partnership.
  • A VBA is incorporated on a limited liability basis, but the articles of association or operating agreement can stipulate that shareholders are severally liable.
  • Bearer shares are not allowed.
  • A nominal 0.01 cent minimum capital requirement applies.
  • The VBA's organizational flexibility allows for the existence of a board of supervisory directors or other corporate representative bodies.
  • The VBA's structure offers considerable flexibility in its funding (eg, in the types of share that can be issued).
  • The VBA allows for the protection of shareholders and rules exist for the protection of capital and creditors. Creditors and shareholders may raise objections to decisions in certain situations.
  • A VBA can be incorporated by one person, whereas all other legal entities available in Aruba (except for foundations) require at least two people.
  • Founders are not required to participate in the company.
  • Non-voting shares, no-par-value shares and shares without profit-sharing rights are allowed.
  • Capital may be denominated in any legal and freely negotiable currency.
  • Most of the company's details can be set out in an operating agreement. The agreement need not be notarized or made public. The VBA's name, statutory seat and purpose must be included in the articles of association, as well as any limitations on representation. The articles of association must be published, but all other provisions and arrangements can, in principle, be included in an operating agreement.
  • The VBA allows for conversions, mergers and divisions, including international conversions and mergers. However, Aruban legislation does not allow for conversions, mergers and divisions, and no tax facilities will be made available in respect of such operations.
  • The VBA structure allows for derivative suits.
  • A VBA can opt for imputation payment company status if it performs a qualifying activity. It may also opt for fiscal transparency. In both cases a special tax regime will apply.
  • A VBA can be incorporated as a free zone company and will qualify for a special tax regime. It can also be used instead of an Aruban exempt company to obtain the benefit of the latter's exemption from profit tax and dividend withholding tax for qualifying activities.

For further information on this topic please contact Rita Oosterwijk at Loyens & Loeff by telephone (+599 94 34 11 00) or by fax (+599 94 65 15 18) or by email (rita.oosterwijk@loyensloeff.com).


Comment or question for author

ILO provides online commentaries as specialist Legal Newsletters. Written in collaboration with over 500 of the world's leading experts and covering more than 100 jurisdictions, it delivers individually requested information via email to an influential global audience of law firm partners and international corporate counsel. Please click here to register for the service.

The materials contained on this website are for general information purposes only and are subject to the disclaimer.

ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription. Register at www.iloinfo.com.