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Open a Dutch Foundation

Updated on Sunday 05th November 2017

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There are several types of structures which can be opened in the Netherlands, just like in all other European countries. However, the Netherlands is known for the advantages offered to those who open foundations here. Also, known as charitable organizations or non-governmental organizations, Dutch foundations are regulated by the Civil Code and not by the Company Act.

 Even if the resemblance with other types of Dutch companies is important, foundations or “stichting” have no members.

The Dutch stichting is required to have a share capital in certain circumstances, case in which they are allowed to carry out commercial undertakings, however the profits resulted from these undertakings have restrictions when it comes to their use. Only foundations registered with the Trade Registrar in the Netherlands are allowed to conduct commercial activities.

Foundations can also be registered as special purpose enterprises (SPEs) or holding companies in the Netherlands.

Our Dutch company formation consultants can offer more information on the legislation applicable to foundations.

You can also find out from the video below how a Dutch foundation can be created:

 

Forms of the Dutch stichting

A foundation can take the following forms in the Netherlands:

  • -       of a private foundation;
  • -       of family foundation;
  • -       of an association;
  • -       of a charitable organization;
  • -       of a trust.

It should be noted that the association can take the form of an association with full legal capacity or that of an association with a limited capacity.

Our company formation consultants in the Netherlands can explain the forms of the foundation.

Setting up foundations in the Netherlands                                 

Setting up a foundation in the Netherlands is quite simple, considering no special approvals or licenses are required.

Foreigners who want to create foundations in the Netherlands must prepare a set of documents which must be notarized. These are the formation deed and the articles of association.

While the deed of formation represents the memorandum and establishes the creation of the organization, the Articles of Association will determine the activities and the management of the Dutch stichting. An important aspect to keep in mind is that the Articles of Association must be in Dutch.

The documents through which the Dutch foundation is registered must contain the following information:

  • -       the name of the foundation;
  • -       information about the assets;
  • -       the purpose of the foundation;
  • -       information about the managers or directors;
  • -       the local address of the foundation.

 

Dutch foundations as tax minimization vehicles

Those who want to open foundations with the purpose of carrying out a commercial activity should know that the entity will be subject to the corporate tax.

When created as a special purpose vehicle, the Dutch foundation can be registered as a holding company. This way the settlors will benefit from enhanced protection when it comes to their investments.

When registered as non-profit or charitable organizations, foundations may own other companies, case in which corporate tax reductions are available for the settlors.

Foundations created as special purpose vehicles are allowed to receive funds from third parties without paying any withholding taxes on interest payments.

Dutch foundations registered as limited liability companies can further benefit from exemptions from the corporate tax and the withholding tax on dividends.

Taxation of private foundations in the Netherlands

Dutch foundations are covered by several tax laws applicable in this country. Among these are:

  • -       the State Tax Law;
  • -       the Income Tax Law;
  • -       the Income Tax, Donations and Public Benefit Organizations Act.

The private foundation created in the Netherlands or in the Dutch Antilles is exempt from paying the income and corporate tax. Also, foreign citizens establishing private foundations in the Netherlands will be exempt from paying the gift tax.

Our company registration advisors in the Netherlands can assist with the registration of a foundation with the authorities. For information about other tax optimization solutions, please contact our Dutch company formation agents.

 

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