As mentioned before the number of new businesses registering themselves at the Chamber is increasing every year in the Q1 period from 2019 to 2021. To be more exact, the sector wholesale and retail trade businesses had the most new registrations. The professional, scientific, and technical coming in second, and accommodation and food services activities coming in third. From these three sectors, accommodation and food services activities can be viewed as a sector that will not be falling down at the bottom or not claiming the top of the list. This is a sector that is constantly remodeling its boundaries, therefore, the businesses in this industry have to be on top of their game. Also, it is highly important to know when and how it is time to adapt to the environment. An example of this is the rise of food delivery services during the pandemic. This service was not available for the customer at first, however, due to the lockdown and social distancing this needed to be implemented to keep the business running. Nevertheless, an impressive number of new businesses were established during those difficult times.
During 2019 a total of 1028 new registrations were completed. In the first quarter of that year, a total of 64 businesses were registered. The most chosen business form is the Sole Proprietorship. This form scores highest, with a total of 35 registrations. The second most popular legal form concerns the VBA (LLC) with a total of 17 entities. The third most popular legal form concerns the Limited Company (NV), with a total of 10new registrations.
Furthermore, in 2020 a total of 81 new registrations were completed. The number of VBA registered in 2020 is 26 and there were 47 sole proprietorships. These two establishments are still the most popular types to be registered. For example, back in 2018, a total of 303 new registrations were recorded. From this total, the most registration completed was for the sole proprietorship and VBA. Likewise, in 2021 a total of 75 sole proprietorships and a total of 30 VBA were registered. For the Limited Company (NV) a total of 5 establishments were registered. It can be said that sole proprietorship and VBA are the most legal entities being utilized in Aruba.
Cancellation & Liquidation
The year with the highest numbers of cancellation and liquidation is 2019 with a total of 225 in Q1. The total number of businesses canceled or liquidated was 722 in 2019. Although the pandemic played a big role in our business community, where a great number of people lost their jobs, there were 113 lesser cancellations and liquidations in 2020. During the pandemic, the Netherlands aided the Aruban Government. With this, the Aruban government created the FASE (Fondo di Asistencia Social di Emergencia) to aid the group who are unemployed. The Aruban government, also, created a wage subsidy which is financial aid to local employers who have been affected by the current situation and who have lost more than 25% of their income. This aid could be the reason that the total in 2020 did not surpass nor reach the total number of cancellations and liquidations in 2019.
In 2020 the number of businesses that canceled or were liquidated decreased by a total of 19.4%. In total 124 businesses were canceled or liquidated in Q1. One of the reasons for this could be the business owners evaluating their situation at the beginning of the new year and evaluating if it is plausible to keep the businesses going in 2021 knowing that the commercial sector is still recovering from the pandemic. From the total of 172 in 2021, it is calculated that 86.6% are from Sole Proprietorship establishments that were canceled or liquidated. The following establishments that were canceled or liquidated are the N.V’s (Naamloze Vennootschap) with a total of 37. There is no concrete research completed for the above-mentioned reasons as to why certain businesses were registered or canceled or liquidated. However, it is a fact that each year during the Q1 there is an increase in new registrations.
Remarkably, the number of new registrations during the first quarter has continued to increase for 3 consecutive years. The wholesale and retail sectors welcomed the most new registrations. The vast majority of new companies are one-person companies. In total, almost 6 out of 10 new companies are one-person companies that are easy to set up. In second place comes the legal entity VBA, which was created especially for Aruba. In legal terms almost the same as the NV, but easier to set up and more flexible in nature. Only 2 percent of new companies opt for the NV as their legal form. Moreover, the cancelation or liquidation of businesses decreased drastically by more than 50% in 2020 compared to 2019.