The investment funds legislation in the Netherlands is quite flexible allowing for several types of funds to be established. The most employed type of alternative investment fund in the Netherlands is the fund for joint account (fonds voor gemene rekening), shortly known as FGR. The most important feature of the FGR is that it is a non-corporate structure.
Our company registration representatives in the Netherlands can offer detailed information on the most important types of investment funds that can be set up here.
As a non-corporate structure, the Dutch FGR can only be established by signing a contract. The agreement will be signed by a manager, the AIF manager, the investor or investors and the owner of the investment fund. The owner will usually be a foundation registered in the Netherlands in order to separate the assets of the owner from the manager’s assets. Through the agreement, the manager takes the responsibility of investing and administering the fund for joint account’s assets of the investors, also called participants.
The contract is usually referred as the Terms and Conditions of the fund and will be attached to a prospectus. This documents will usually contain information about the investment strategy, the costs related to managing the fund, the restrictions, the subscription and redemption requirements.
The main reason why it is worth to set up a Dutch FGR is that it must only be registered before a notary, unlike companies which must registered with the Trade Register. Also, the fund for joint account can be used to set up several types of fund, among which open or closed-ended funds.
The FGR is also a very good option from a taxation point of view, as it is not subject to the corporate and dividend taxes if registered as tax-transparent. It must be taken into consideration that several conditions apply for Dutch FGR to be considered a tax-transparent fund, among which not being registered as limited partnership. Also, tax-transparent FGRs are not required to register with the tax authorities.
For assistance in opening a FGR, please contact our Dutch company formation agents.