Tax Incentives for Real Estate Development in Aruba’s Key Urban
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The Minister of Finance has introduced temporary fiscal incentives to stimulate the redevelopment of outdated real estate in designated areas of Oranjestad and San Nicolas, effective January 1, 2026.
Introduction
Temporary fiscal measures will be made available starting January 1, 2026, to encourage the transformation of aging real estate within designated zones of Oranjestad and San Nicolas. The initiative aims to promote the renewal of underutilized properties and attract both domestic and international investment, supporting the long-term economic development of these principal urban centers.
Background
The Minister of Finance has introduced a temporary fiscal incentive to stimulate the redevelopment of outdated real estate in Oranjestad and San Nicolas. The incentive is granted by way of policy, in anticipation of forthcoming legislation.
Tax Benefits
The following tax benefits may be applicable:
– A 10-year exemption from profit tax;
– A 10-year exemption of dividend withholding tax;
– An exemption from transfer tax for transactions occurring in 2026 and 2027;
– An exemption from turnover tax BBO/BAZV/BAVP) for transactions occurring in 2026 and 2027.
– Entities that are unable to qualify, or choose not to qualify, for the profit tax exemption may instead apply arbitrary (accelerated) depreciation to redevelopment and renovation costs, up to a maximum amount of AWG 500,000, incurred between 1 January 2026 and 31 December 2035.
The incentives apply from 1 January 2026 through 31 December 2035.
Attention points
The regime operates on an “all-in or all-out” basis, requiring that the qualifying entity’s activities and assets be exclusively related to the redevelopment and exploitation of redeveloped real estate in Oranjestad and San Nicolas.
Entities falling within the scope of the OECD Global Minimum Tax (Pillar Two) are not eligible for the profit tax exemption.
In addition, the incentives are subject to strict conditions and anti-abuse provisions; non-compliance may result in the retroactive withdrawal of the exemptions.
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