VBA

Highlights Limited Liability Company (VBA a.k.a. LLC)

On January 1, 2009, a new corporate entity was introduced in the Aruba laws, the limited liability company (comparable to the LLC, hereinafter: VBA). The VBA is a very flexible corporate entity that is especially useful if the voting rights and profit rights of shares need to be separated.  

1. Some legal aspects of the VBA

The VBA has the following legal flexibility:

  • The VBA can be incorporated by one individual or entity.
  • The articles of incorporation can be in Dutch, English or Papiamento. All other languages can be used as well, as long as a certified translation is attached to the original Dutch or Papiamento version.
  • The share capital of the company has no minimum.
  • Shares have a value equal to the nominal value or, if no nominal value is determined, equal to the consideration paid.
  • Shares can be with or without voting rights or profit rights, as long as one share with both voting and profit rights is issued, or one share with voting rights and one share with profit rights are issued.
  • A usufruct can be established on the shares.
  • Certain (types of) shareholders can be held responsible for certain specified or all debts of the VBA, as long as this is included in the articles of association of the VBA.
  • The board of directors can have different tiers, e.g. managerial and supervision.
  • The VBA can legally merge and split, either locally or cross-border.

The VBA can be converted into a regular corporation (NV) or a foreign entity, if the foreign entity is similar to an AVV, NV or VBA.

2. Filing obligation

The VBA is legally required to file the annual financial statements and other documents at the Aruba Chamber of Commerce. Ultimately August 31 of each year, the financial statements need to be approved by the shareholders. Within 8 days after the General Shareholders’ Meeting’s approved the financial statements, the following information needs to be filed at the Chamber of Commerce:

  • (Condensed) balance sheet
  • (Condensed) profit & loss account
  • Notes
  • Minutes with the approval of the financial statements
  • Shareholders register.

Extension of the filing obligations can to be requested by the managing directors from the shareholder, which extension may however not be longer than six (6) months.

3.  Tax regimes applicable

The VBA is eligible for:

4. Tax implications mergers and splits

  • In case a VBA merges or splits (either locally or cross-border), converts into a foreign entity, or transfers its statutory seat abroad as per the State Ordinance Transfer of Statutory Seat Entities, the assets of the VBA will need to be revaluated to the fair market value, and the gain (hidden reserves, fiscal reserves, and goodwill) will be subject to 25% corporate income tax.
  • In case of a conversion of an AVV or NV into a VBA, or a VBA into an NV, no tax implications arise. This would however be different if afterwards the tax regime would be changed.
  • In case of a conversion of a foreign entity into a VBA or a transfer of the statutory seat of a foreign entity to Aruba, the VBA will receive a step-up for corporate income tax and dividend withholding tax purposes.

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