Many foreign entrepreneurs choose the Netherlands for opening an investment fund
because this country offers a business-friendly environment, a special taxation regime for this type of funds and it is a well-known destination for business operations.
Providing a stable economic and political environment and a large number of double taxation treaties, the Netherlands
has become one of the most wanted financial centers for opening an investment fund
. It offers a legal and tax framework
that is attractive for both local and foreign investors.
There are two major types of investment funds that are regulated in the Netherlands: UCITS
(Undertakings for Collective Investment in Transferable Securities), that are also available in Luxembourg
, and AIFs
(Alternative Investment Funds). Both structures are regulated at the EU level and one of the most important rules is Alternative Investment Fund Managers Directive (AIFMD) related to managers of the alternative investment funds (AIF).
Legal structures for investment funds in the Netherlands
An entrepreneur who wants to set up an investment fund in the Netherlands has the possibility to choose among a few legal structures:
- private limited liability company
(besloten vennootschap met beperkte aansprakelijkheid - BV
) and public limited company
(naamloze vennootschap - NV)
– both corporate entities. The NV
can be listed on the local stock exchange.
- limited partnership (commanditaire vennootschap - CV) and fund for joint account (fonds voor gemene rekening - FGR) – both non-corporate entities. The CV is chosen especially by investors interested in the real estate and private companies and the latter is preferred by those who want to invest in assets that are daily traded. The fund for joint account is an agreement between the investors, the manager and the owner, that can be a foundation that was created for this purpose.
Local regulations for investment funds
An investment fund that was set up in the Netherlands is allowed to invest in any type of financial instruments, all over the world, with no restrictions. The investors are protected by the Authority for the Financial Markets (AFM) that will ask for certain guarantees, such as the possibility of the investor to ask for redemption and to obtain it very soon.