Recently, amendments have been introduced with respect to the Free Zone regime. These amendments to the Free Zone regime were suggested by the Organization for Economic Cooperation and Development (OECD). The aim of the OECD is to align international preferential tax regimes with approved international standards. 


The former Free Zone legislation permitted companies in the Free Zone to provide services to non-residents. Services provided to the Aruban local market were in principal (partially) restricted and would be subject to the normal corporate tax rate. The OECD proposed that the former Free Zone legislation prohibits explicitly and implicitly service providers, which benefit from the regime, from providing services to residents. The new Free Zone legislation forbids any form of restrictions to enterprises that provide services to residents. For instance, the approved legislation does not only disallow restrictions which involve the prohibition of providing services to residents but also indirect restrictions which include the application of higher corporate tax rate on the profits generated by the supply of services to residents.  

In a nutshell, companies in the Free Zone regime can now provide services to residents and non-residents, while equally benefitting from the reduced corporate tax rate. However, these will be limited and certain conditions must be met. Services that will be permitted will be announced through a national decree. 

Services not allowed  

The new Free Zone legislation excludes the following services from the Free Zone regime: 

  • Financial services
  • Services provided by accountants, tax advisors, notaries, and lawyers
  • Services including the disposal or licensing of intellectual and industrial property rights
  • Plus other services to be announced later by a national decree  

Economic substance requirement  

Companies in the Free Zone are also required to have an economic substance for core-generating activities. Examples of core-generating activities are: 

  • Head office activities
  • Holding company activities
  • Distribution and other associated service activities 
  • Shipping activities

Companies that cannot comply with the economic substance will be excluded from the Free Zone regime. 


A transitional period is available up until 30 June 2021 for companies within the Free Zone regime with intellectual property activities in place existing prior to 1 September 2018 and to non-intellectual property activities existing prior to 15 November 2018. No transitional period applies for companies that have joined the Free Zone regime as of 1 September 2018 respectively 15 November 2018. 

We will contact you shortly, should this apply to you, in order to be able to come to an optimal application of the new changes of the Free Zone regime. 

Contact our Tax & Legal team, we’re happy to assist.

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