24 November 2022,
WHY THE NETHERLANDS AND WHO IS SETTING UP THE FUNDS HERE?
The Netherlands is a widely used jurisdiction for the creation of investment funds. It has an advanced and flexible legal and administrative system. In addition to a stable business and political environment, the Netherlands has a good tax environment, which makes it an attractive jurisdiction for funds. Moreover, for years the Netherlands has been the gateway to Europe for international capital and it has remained so to this day. The international perception of the Netherlands, its good regulation and simplified investment procedures make it, as usual, very successful. Polish investors are also considering the establishment of a Dutch fund, comparing it with the domestic solution, which is the ALTERNATIVE INVESTMENT FUND.
The Netherlands is an excellent location for private equity and venture capital funds. It is typically used by fund managers who operate “in” the Netherlands and “from” the Netherlands. It happens that holding structures are also used in the structuring of investments from the ocean. Currently, however, also due to changing regulations, a large amount of operational presence in the Netherlands is necessary.
BENEFITS OF THE FUND IN THE NETHERLANDS
- A SYSTEM FRIENDLY TO FOREIGN INVESTORS. The opening of an investment fund in the Netherlands means the possibility of benefiting from a friendly tax regime, an extensive network of international tax treaties and openness to foreign investments.
- DIFFERENT POSSIBILITIES OF SOLUTIONS for FUNDS. There are several types of fund structures for professional and non-professional investors in the Netherlands.
- RELIEVED REGISTRATION REQUIREMENTS. Special licences should be obtained for certain Dutch investment funds. There are also structures that do not require special permission.
- FLEXIBILITY OF THE STRUCTURE. The Fund may be established by registering corporate structures such as limited liability companies or non-corporate structures such as limited partnerships.
- INITIAL CAPITAL – HIGHER REQUIREMENTS THAN IN POLAND. In terms of share capital, the minimum required amount starts at EUR 125,000, and investors must also contribute EUR 100,000 to the fund.
THE MOST FREQUENTLY SELECTED STRUCTURES OF DUTCH FUNDS:
There are several types of investment funds that are regulated in the Netherlands: UCITS (Undertakings for Collective Investment in Transferable Securities) and AIF (Alternative Investment Funds). There are other types of funds in the Netherlands, but they are rarely used.
All structures are regulated at EU level and one of the most important provisions is the Alternative Investment Fund Managers (AIFMD) Directive on Alternative Investment Fund Managers (AIFM).
- ALTERNATIVE INVESTMENT FUND (AIF) In the NETHERLANDS
Out of all investment funds in the Netherlands, AIF are among the preferred by foreign investors. They are usually organised in the form of a limited partnership (commanditaire). They may also take the form of cooperatives, pooled funds, private limited liability companies or a combination of pooled funds and limited liability companies.
AIF are the main category of funds regulated by national legislation and include other structures that investors can use to generate profits. These include hedge funds, debt funds and real estate funds.
- COLLECTIVE INVESTMENT FUNDS IN the NETHERLANDS
Another type of investment funds in the Netherlands are collective investment funds. Funds such as UCITS are often set up as FGRs or public limited companies (NVs) with a legal designation of investment institutions with variable capital.
Both the open FGR and the NV are suitable for the creation of umbrella funds as well as open and closed funds. Both NV shares and shares in the FGR can be quoted on the stock exchange.
It is good to know that investment funds in the Netherlands are subject to different share capital requirements depending on whether the fund manager is licensed or not and whether the fund is supervised by the Office for Of the Financial Market and by the Dutch National Bank. The minimum share capital requirements for open-end and closed-end funds are EUR 125,000 if the assets under management are less than EUR 250 million and EUR 225,000 if the assets are worth more than EUR 250,000 million. Investors are also required to contribute at least EUR 100,000 to the fund.
SUPPORT BY PANASIUK & PARTNERS TEAM
We specialize in international investment structures, i.e. in holding companies, investment funds and topics related to law and international taxes for over 20 years.
- We will analyze the best structures and markets that meet your investment criteria and objectives.
- Our team offers full legal and tax support based on specialist knowledge of the local and international dynamics of legal and tax changes.
- As part of the cooperation, our team manages the entire process of organizing your investment structure, thanks to which we remove the burden of coordinating the international process (we have been doing it for 20 years!). You get space for investment decisions. On our part, you will be guaranteed a holistic approach to the issues arising not only from Polish and Dutch law or other markets where investments will be carried out, but also from aspects related to the change of tax residence (if such a subject occurs).