Chapter

ARUBA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15, 1961.
Exchange Arrangement
CurrencyThe currency of Aruba is the Aruban florin.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe florin is pegged to the dollar at Af. 1.79 per $1. The Centrale Bank van Aruba (CBA), the central bank, deals with local commercial banks within margins of 0.002795% on either side of parity.
Exchange taxA foreign exchange commission of 1.3% is levied on all payments to nonresidents, except when settled in Netherland Antillean guilders. Certain institutions or groups are exempted from this rule.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlThe CBA administers foreign exchange control.
International security restrictions
In accordance with UN sanctionsYes.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of domestic banknotes is prohibited.
Foreign currencyThe exportation of foreign banknotes requires a license, except for traveling purposes.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyThrough March 31, 1999, approval to open these accounts was required.
Held abroadThe opening of an account held abroad must be reported to the CBA.
Accounts in domestic currency convertible into foreign currencyThese accounts are not allowed.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyBalances up to Af. 200,000 are convertible. Approval of the CBA is required for balances in excess of Af. 200,000.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Licenses with quotasThe importation of eggs may be subject to quotas, depending on the domestic supply situation.
Import taxes and/or tariffsYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsUnless specifically exempted, export proceeds must be converted into local currency within eight working days or credited to a foreign currency account with a local foreign exchange bank or deposited in a foreign bank account approved by the CBA.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersMost restrictions on these transactions have been eliminated.
Investment-related payments
Indicative limits/bona fide testInterest payments on all types of loans may be executed if a license has been obtained from the CBA to conclude the loan. As regards profits and dividends, documents should be submitted to the CBA with respect to the amount involved. Authorization may proceed only if a license was obtained for the loan. In the case of depreciation of direct investments, a special license is required.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsUnless specifically exempted, proceeds must be converted into local currency within eight working days or credited to a foreign currency account with a local foreign exchange bank or deposited in a foreign bank account approved by the CBA.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsTransactions of less than Af. 200,000 a year for natural persons and Af. 500,000 a year for juridical persons (excluding commercial banks and institutional investors) are free. These ceilings are not only applicable to investments but also to all capital transactions with nonresidents. This implies that a CBA license is only required for capital transactions in excess of these ceilings.
On capital market securitiesThere are controls on all these transactions.
Shares or other securities of a participating nature
Purchase locally by nonresidentsA CBA license is required.
Controls on derivatives and other instrumentsThere are controls on all these transactions.
Controls on credit operationsThere are controls on all these transactions.
Controls on direct investment
Outward direct investmentThe CBA may require divestment, repatriation, and surrender of proceeds to the CBA.
Inward direct investmentYes.
Controls on liquidation of direct investmentYes.
Controls on real estate transactionsThere are controls on all these transactions.
Controls on personal capital movementsPersonal capital transactions must be settled through the banking system and foreign accounts approved by the CBA.
Loans
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsYes.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)The CBA’s approval is required for lending in domestic currency.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Liquidasset requirementsYes.
Provisions specific to institutional investors
Limits (max.) on portfolio invested abroadYes.
Limits (min.) on portfolio invested locallyThe limits are 40% of the first Af. 10 million of outstanding liabilities; 50% of the second Af. 10 million; and 60% of the remaining liabilities.
Other controls imposed by securities lawsNo.
Changes During 1999
Resident accountsApril 1. The CBA’s approval is no longer required for residents to open foreign currency accounts.

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