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Establish a Trust in the Netherlands

Updated on Wednesday 23rd March 2022

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Establish-a-trust-in-the-NetherlandsForeign 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.
 

How to open a Dutch trust company

 
Amsterdam is home to most trust companies in the country, even if these can also be found in the Dutch Antilles and Curacao, when it comes to offshore destinations.
 
The creation of trust company here implies registering a business that will need to obtain a special license from the Dutch National Bank. There are also a few important requirements to meet upon the creation of such an entity:
 
  • - it must have at least two Dutch resident directors;
  • - it must also have an internal compliance officer.
  • - In order to find a service provider, the Central Bank has created a register where persons or companies interested can search for a trust company in Amsterdam or any other parts of the country.
 
Our Dutch company formation specialists can help foreign investor set up trust companies here. We are also at the service of those interested in setting up a trust fund in the Netherlands.
 

Requirements 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.
 

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.
 

The trust company in the Netherlands and its services

 
While the law does not provide for the creation of a trust in the Netherlands, it does recognize the existence of foreign trusts on the Dutch territory. However, it is possible to create trust companies here. These can be used for offering several services, among which:
 
  • - fiduciary services;
  • - trustees services.
 
It is also possible for Dutch trust companies to act as agents or legal representatives on behalf of clients who can be natural persons or corporate entities.
 
It is quite common for businesspersons to choose Amsterdam for trust company creation, as the city is an important financial hub of the Netherlands.
 
A trust company or office is usually created for the purpose of administering one or more of the following:
 
  1. foreign trusts or trusts created by Dutch parties in other countries;
  2. estates ranging from real estate to other types of assets;
  3. companies from a beneficial ownership point of view;
  4. various arrangements made by private high net worth individuals or companies.
 
A trust company in the Netherlands can also act as a custodian for investment funds.
 
It is also possible to create a trust fund in the Netherlands with the purpose of ensuring a high protection level of assets to be left to beneficiaries.
If you want to have a trust recognized in the Netherlands, you can obtain more information on this aspect from our company registration agents.
 

Aspects related to the taxation of a trust in the Netherlands

 
The Dutch taxation system requires taxpayers to fill out tax forms divided into 3 boxes, each for certain income type. When it comes to a Dutch trust:
 
  • - Box 1 or Box 3 can be filled out as regular income, respectively income derived from asset ownership, inheritance, or gift;
  • - the income generated under Box 1 can lead to a tax rate of 52% (the income tax is applied progressively);
  • - Box 3 income is applied with a tax of 30%.
 
We advise using our accounting services for support in filing tax returns in the Netherlands, as well as for obtaining various tax deductions and allowances.
 

Legislation on trust companies in the Netherlands

 
In the Netherlands, a trust fund and company fall the Law on the Supervision of Trust Companies which enables them to provide various services. One of the most common facilities such entities offer imply registered addresses for companies and individuals in combination with assistance in other matters.
 
Registered addresses can also be obtained by acquiring virtual offices in the Netherlands, however, the main difference is that a virtual office does not imply professional services such as asset management. Also, a virtual office is cheaper than using a registered address offered by a trust company in the Netherlands.
 
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.

 

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