The foreign exchange license
The Aruba Ordinance on foreign exchange (Landsverordening deviezenverkeer) regulates international payment transactions, among others.
On the basis of the Ordinance, a license is required for certain transactions with non-resident natural persons or legal entities, among others for capital transactions (kapitaalverkeer).
Foreign exchange licenses are issued by the Central Bank of Aruba (hereinafter: CBA).
CBA temporarily suspends licenses for outgoing capital transactions
On March 17th, 2020, in view of the coronavirus crisis, the CBA announced a temporary stop – until further notice – to the issuance of licenses for outgoing capital transactions:
- Loans to non-residents
- Investments abroad
- Participations in non-resident companies
- Purchase of real estate from a non-resident, either in Aruba or abroad
- Transfers by a natural person or legal entity to own account abroad
- Transfers to foreign intercompany accounts (FIA)
- Other outgoing capital transactions e.g. gifts, donations, inheritance
Licenses for dividend or profit payments to non-resident shareholders are also temporarily suspended
Furthermore, no licenses will be issued for payment of dividend or profit to non-resident shareholders, unless the license for the dividend or profit declaration was already granted prior to the announcement on March 17th, 2020.
Incoming capital transactions are allowed
All incoming capital transaction are allowed, e.g.:
- Receipt of the principal amount from a loan acquired abroad
- Receipt of dividend or profit from an investment abroad
- Receipt of proceeds from a sale of real estate to a non-resident person or entity
Current account transactions are also allowed
All current account transactions are allowed, e.g.:
- Payments connected to the import and export of goods
- Payment of freight and insurance costs connected to the international transport of goods
- Payments and receipt of proceeds connected to travel, accommodation and rental expenses to and from non-residents
- Payments and receipt of remunerations connected to work and services provided to or by non-residents
An end date for the temporary suspension of licenses for outgoing capital transactions is yet to be announced.