Taxation of Dutch Fiscal Investment Institutions

At the beginning of 2016, the Dutch Government enabled new regulations which ease the establishment of investment funds in the Netherlands. The Fiscal Investment Institution (FII) regime provides for more flexibility related to the taxation of Dutch investment funds. In order to qualify for the new scheme, an investment fund must meet certain criteria.

Our Dutch company formation consultants can offer more information on the new FII regime.

Fiscal investment institutions in the Netherlands

Under the new FII regime in the Netherlands, investment funds can be set up as limited liability companies or as joint stock companies which can be listed on the capital markets in order to benefit from the new tax advantages. Among the conditions available for Dutch investment funds under the FII regime are equal distribution of profits among shareholders and several limitations on the classes of shares the fund may issue. The fiscal investment institutions may issue different classes of shares only if:

• -          the FII is set up as an umbrella fund which will be made up of separate sub funds;
• -          the profit rights of the share classes differ only in terms of administration fees, share registration in other currencies or marketing costs.
• As for the shareholder requirements, the following criteria apply:
• -          the shareholders must own maximum 45% of the outstanding shares;
• -          individual shareholders must own maximum 25% in the investment fund.

When it comes to non-regulated investment funds in the Netherlands, individuals or companies must own at least 75% of the shares in order to qualify for the FII regime. Also, individuals may not own more than 5% equity interests in the fund.

What does the new Dutch FII regime entail?

According to the new FII taxation regime, qualifying investment funds in the Netherlands would benefit from 0% corporate tax rate. They would be applied a 15% withholding tax on dividends which would be reduced through the Netherlands’ double taxation agreements or through the remittance deduction.

For complete information on taxation under the new FII regime, please feel free to contact us. You can also rely on our company registration agents in the Netherlands for assistance in setting up various types of investment funds.