Establish a Trust in the Netherlands

Foreign citizens have various wealth management solutions if they decide to move to the Netherlands. They can open companies, among which the flex BV (limited liability company), and the private foundation are the most appropriate ones. Those interested in establishing trusts in the Netherlands should know that the government has not enabled a specific law related to these structures, however the local legislations recognized the concept of international trust.

Our company formation consultants in the Netherlands can explain how the international trust is recognized under the local legislation.

The concept of trust in the Netherlands

As mentioned above, there is no law to provide for the creation of trusts in the Netherlands, but given the international regulations on this type of asset protection tool, foreign investors are also given the possibility of setting up private foundations in the Netherlands which replace trusts. Private foundations are different from other types of foundations as they enable their owners to use them as estate planning solutions.

According to the local regulations, a Dutch trust will ensure the difference between legal ownership and beneficial ownership of various assets. Based on international rules, the legal ownership belongs to the individual or Dutch company setting up the trust, while the beneficial ownership belongs to the beneficiary or beneficiaries of the trust.

How to create a trust in the Netherlands

Both foreign citizens and companies are allowed to establish trusts in the Netherlands by drafting and notarizing an agreement with a trustee. The role of trustees is usually carried out by trust companies in the Netherlands. These companies ensure the protection of the assets conveyed through the agreement. The same trust companies are used by those creating investment funds in the Netherlands.

For the same reason, trusts are treated the same as Dutch investment funds from a taxation point of view. In order to provide an efficient tax regime for Dutch trusts, the government has enabled the Segregated Private Capital regime.

For full information on the taxation of trusts in the Netherlands, please contact us. Our company registration agents in the Netherlands can also help you open companies here.