Aruba Free Zone — Expanded 2026 Legislation
Free zone companies pay as little as [VERIFY: 2%] profit tax on qualifying income — compared to the standard [VERIFY: 22%] corporate rate. New 2026 legislation has significantly expanded the range of businesses that qualify.
Find out if your business qualifies — take our quick assessment or reach out directly.
Understanding the opportunity
The Aruba Free Zone was established under the Landsverordening vrije zones 2000 as a designated economic area where qualifying companies operate under a preferential tax regime. The concept is straightforward: companies that perform specific activities from within the zone and serve predominantly international markets receive a substantially lower corporate tax rate.
For years, the Free Zone was primarily used by trading and logistics companies. That changed decisively in late 2025, when the Aruban government enacted new legislation that expanded the scope far beyond traditional trade.
The legal framework gives Free Zone companies a corporate profit tax rate of [VERIFY: 2% on qualifying income], compared to the standard Aruban corporate tax rate of [VERIFY: 22%]. Companies may also benefit from BBO/BAVP/BAZV turnover tax exemptions on qualifying services [VERIFY: confirm turnover tax exemption specifics]. This makes the Aruba Free Zone one of the most competitive tax regimes in the Caribbean for service-based businesses.
New legislation
In December 2025, the Aruban government enacted AB 2025 no. 45, a ministerial decree that dramatically expanded the types of service activities permitted in the Free Zone. The decree took effect on January 1, 2026.
Before this change, the Free Zone was largely limited to warehousing, assembly, and international trading of goods. The new rules open the door to a wide range of service-based and knowledge-economy activities — including technology, healthcare, media production, scientific research, financial services, and education.
This is a strategic shift by the Aruban government to attract international service companies and diversify the economy beyond tourism. For businesses in qualifying sectors, the timing is optimal: the regime is newly available, application precedents are being set, and early movers can establish themselves before the landscape becomes more competitive.
[VERIFY: Describe any additional specifics of the 2026 expansion — e.g., whether existing free zone companies automatically get access to the new categories, transition provisions, or planned further expansions.]
Is it right for you?
Companies that buy and sell goods internationally without serving the Aruban domestic market. The classic Free Zone use case, now with even better terms.
Online businesses with customers outside Aruba — SaaS platforms, digital marketplaces, subscription services. The Free Zone offers a Caribbean base with EU-standard infrastructure.
Companies that hold and license intellectual property internationally. Aruba offers a transparent, treaty-accessible jurisdiction with real substance requirements.
Professional services firms (consulting, engineering, project management) serving the Caribbean and Latin American region from an Aruban base.
Software development, AI/ML, cybersecurity, data analytics — the 2026 expansion specifically targets IT and data-driven businesses.
Film, streaming, VR/AR production, audio technology. Aruba offers location advantages plus the new Free Zone tax treatment for media companies.
Permitted activities
Under the new 2026 legislation, the following service categories are permitted in the Free Zone. Each category includes multiple specific activities. [VERIFY: confirm this is the complete and current list]
Film production, streaming, VR/AR, AI-driven media, recording studios
Aircraft/vessel maintenance, engineering, design, inspections
Big data, software development, call centers, internet platforms, cybersecurity
Proprietary trading via recognized international exchanges
Biotech, nanotech, blockchain, sustainability, lab services, R&D
Medical tourism, e-medicine, diagnostics, pharmaceutical labs
Aviation/maritime schools, banking education, specialized training
Civil engineering (airports, tunnels), postal service optimization
[VERIFY: Confirm this is the full list per AB 2025 no. 45. Some sub-categories and conditions may apply.]
Requirements
The Free Zone is not a paper-only arrangement. Aruba requires genuine economic substance, and the rules are enforced. Here is what you need to know:
Your company must have an actual office in the Free Zone, employ staff locally, and conduct core income-generating activities (CIGA) from Aruba. Board meetings, key decisions, and contract negotiations should happen on the island. Shell structures will not pass scrutiny.
Free Zone companies may direct no more than [VERIFY: 25%] of their revenue to the Aruban domestic market. The regime is designed for internationally-oriented businesses, not local ones. If a significant portion of your revenue comes from Aruban clients, the Free Zone may not be the right structure.
Companies must obtain a Free Zone license from the Aruba Free Zone Authority. There are annual licensing fees [VERIFY: typical fee range]. The application process involves demonstrating your business plan, projected activities, and compliance with substance requirements.
Once licensed, you must maintain compliance with substance requirements, file corporate tax returns under the Free Zone regime, and submit annual reports to the Free Zone Authority. Failure to maintain substance or comply with reporting requirements can result in loss of the preferential rate.
If your Free Zone entity transacts with related parties outside Aruba, those transactions must be at arm's length. Aruba follows OECD transfer pricing guidelines, and the tax authority is increasingly active in reviewing intercompany arrangements. Proper documentation from day one is essential.
What to watch out for
We have seen companies fail to obtain or maintain their Free Zone status due to avoidable mistakes. These are the most common:
The most frequent problem. Companies incorporate a Free Zone entity but delay establishing a real office, hiring local staff, or holding board meetings on the island. DIMP assesses substance from day one. If your first year of operations shows no Aruban payroll, no local premises, and no evidence of decision-making on the island, you will face challenges.
Some companies plan to serve "mostly international" clients but gradually drift toward local sales. Once you breach the [VERIFY: 25%] domestic revenue threshold, your Free Zone status is at risk. Structure your sales channels to maintain clear boundaries between Aruban and international revenue.
Related-party transactions between your Free Zone entity and parent/sister companies abroad will be scrutinized. Pricing must be at arm's length, documented, and defensible. Companies that set up intercompany arrangements without proper transfer pricing studies often face adjustments — or worse, lose the preferential rate entirely.
Companies sometimes apply under a category that does not accurately describe their core activity, either due to misunderstanding or optimism. If your actual operations do not match the licensed activity, you are exposed to reclassification. Be precise and honest in the application.
Aruba is not and does not want to be a brass-plate jurisdiction. The entire premise of the Free Zone is real economic activity on the island. If your plan involves minimal presence and remote management from abroad, this is not the right structure for you — and it will not survive a substance challenge.
Our process
We guide businesses through every stage of Free Zone establishment — from initial feasibility to ongoing compliance.
We review your business activities, client base, and operational plans to determine whether the Free Zone is the right fit — and if so, which activity category applies. If a Free Zone structure is not optimal, we will tell you and suggest alternatives.
We handle the Aruban entity formation, articles of incorporation, and the Free Zone license application. This includes preparing your business plan, substance plan, and all documentation required by the Free Zone Authority.
We serve as the primary contact with the tax authority and Free Zone Authority throughout the application process. Questions, information requests, and negotiations are handled directly by our team.
We establish the intercompany pricing framework, prepare transfer pricing documentation, and set up your ongoing compliance calendar — tax returns, annual reports, and substance reporting. We also handle your Aruban bookkeeping and payroll if needed.
We have already successfully obtained Free Zone approvals under the new 2026 conditions. Our team understands the requirements, the application process, and what the authorities expect — because we have been through it.
Free assessment
Fill out this short questionnaire and we will assess your eligibility. No obligation, no cost.
Whether you are ready to apply or just want to understand your options, we are here to help. Our team has direct experience with the new 2026 regime and can give you a clear picture of what is possible.
Franklinstraat 5, Oranjestad, Aruba · Mon – Fri, 9 AM – 5 PM