The Dutch investment fund industry is highly regulated by the central authorities who have provided for various types of investment funds that can be set up and for the vehicles that can be used for their establishment. Among these, limited liability companies, cooperatives, and funds for joint account are common among professional investors. However, another advantageous vehicle that can be employed to set up an investment fund in the Netherlands is the limited partnership (commanditaire vennootschap or CV).

Our company registration agents in the Netherlands can offer more information about the limited partnership for investment purposes. We can help foreign investors who want to open limited partnerships with the purpose of setting up Dutch investment funds.

The Dutch limited partnership as a business form

When it comes to types of legal structures that can be set up in the Netherlands, the limited partnership is usually employed when creating investment funds because of the tax advantages it offers. From the same point of view, it is worth noting that:

the Dutch CV requires only two members in order to be created and it can be set up through a notary deed;
it does not imply a minimum share capital when created for commercial purposes, however, it needs a minimum amount when used as an investment vehicle;
the name of this type of partnership must include the suffix CV;
it is possible for the members in the partnership to be natural persons or companies;
foreign ownership is also permitted when creating a Dutch limited partnership.

From a legal point of view, the Dutch limited partnership must have at least one general member who will act as the manager of the entity and at least one limited partner. The number of limited partners can be higher.

The Dutch CV can also be used as an estate planning tool when it comes to investments. Our company registration agents in the Netherlands can offer more information on the legal provisions related to the creation of a CV for investment purposes.

One of the greatest advantages of setting up a limited partnership in the Netherlands is that it can be registered in just a few days, so when created for investment purposes the procedure is completed in a faster manner.

What is a Dutch CV for investment?

The structures used to set up investment funds in the Netherlands can be corporate and non-corporate. The Dutch limited partnership for investments enters the non-corporate category together with the FGR. Investors setting up a Dutch CV for investment will purchase limited partnership interests, whereas investors will buy participations. Just like partnerships created for other purposes, the CV for investment will be constituted through a contractual deed and will be formed by one or more general partners and one or more limited partners.

Setting up a Dutch limited partnership for investment purposes

The establishment of a limited partnership for investment purposes is the same as the CV enabled for commercial purposes. However, in the investment funds sector, the general partner will be the Dutch company managing the fund, while the limited partner or partners will be investors participating in or acquiring interests in the fund. Our Dutch company formation consultants can assist foreign investors who want to set up a limited partnership for investments.

What are the types of funds a Dutch CV can be used for?

The legislation related to investment funds in the Netherlands provides for the creation of various types of funds by using various structures. Among these, the limited partnership is one of the most popular non-corporate forms used creating investment funds. It can be employed for the establishment of or Undertakings for Collective Investment in Transferable Securities (UCITS), Alternative Investment Funds (AIFs), hedge funds and even exempt funds. Foreign professional investors can set up funds and obtain passporting rights in other EU countries.

If you want to open a company in the Netherlands, you can rely on our local consultants for professional advice.

We also invite you to read about the Dutch limited partnership for investments in the scheme below:

How-to-open-a-limited-partnership-for-investments-in-the-Netherlands

Licensing requirements for Dutch CVs set up as investment funds

Depending on the type of fund to create, the Dutch CV could require a license issued by the Financial Supervisory Authority in the Netherlands. It is also important to note that the fund manager is subject to various licensing requirements. When creating an AIF, the manager will need to obtain a license from the same Financial Markets Authority and will also need to comply with the regulations imposed by the Dutch National Bank.

It is possible for EU citizens licensed as fund managers to offer their services to Dutch-based funds.

The following exemptions apply in terms of licensing when creating an investment fund under a Dutch CV:

- the entire value of the assets held under management is below 100 million euros;
- in the case of AIFs, the value of the assets must be below 500 million euros;
- the number of participants in the fund must be lower than 150, however, there are no restrictions for them to be professional or non-professional;
- the minimum amount an investor must participate with to the fund is 100,000 euros.

The Dutch limited partnership is usually used for creating real estate investment funds. Also, in most cases, the role of the general partner in such a partnership is taken by private companies (BVs).

For those who want to set up a fund under the form of limited partnership, we recommend they discuss with our Dutch company formation agents.

We also invite you to watch our video on how to open a Dutch limited partnership for investment:

The taxation of the CV for investments in the Netherlands

From a taxation point of view, the Dutch CV for investment can be tax-transparent or non-transparent. The tax transparent CV will be exempt from the corporate and withholding taxes. In order to have this status, the partners must give their consent. If the CV was established outside the Netherlands and has foreign partners, it can benefit from further tax exemptions in this country.

It is useful to know that the partners in a limited partnership can be taxed differently. In the case of the general partner, the CV will be taxed as transparent legal entity, therefore the respective partner will pay the income tax on the share of the income generated directly by the CV. Limited partners, on the other hand, will be taxed in accordance with the tax status of the Dutch CV.

It should be noted that Dutch CVs set up for investment reasons are considered non-resident entities, therefore there are cases in which these cannot benefit from the Netherlands’ double taxation agreements. Even so, these can benefit from special tax rulings when the shareholders in the Dutch company acting as a general partner are non-residents: in this case, the Dutch company will benefit from a 0% corporate tax rate.

For complete information on the advantages of setting up a CV for investment, please contact our company incorporation representatives in the Netherlands.

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