Open a Closed-Ended Fund in the Netherlands
Updated on Tuesday 04th July 2017
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Closed-ended funds in the Netherlands are regulated under the rules of the Directive 2003/71/EC. Investors interested in how to start a fund in the Netherlands as a closed-ended vehicle must know that the main regulatory body for such structures is the Authority for Financial Markets (AFM), which provides a similar registration procedure as in the case of open-ended investments funds.
Characteristics of closed-ended funds in the Netherlands
In a closed-ended fund in the Netherlands, the investors are required to raise the company’s capital through an initial public offering. The main characteristic of a Dutch closed-ended fund refers to the fact that the fund can have a prescribed capital through the issuance of a fixed amount of shares. The shares can be issued only after the initial public offering has been completed.
Investors interested in how to start an investment fund in the Netherlands registered as a closed-ended vehicle are required to appoint a management team, which has the responsibility of managing the fund’s portfolio of investments.
In this type of investment fund, the vehicle’s assets are traded throughout the financial day, a situation which is not applicable in the case of open-ended funds, traded only at the end of the day.
In the Netherlands, the closed-ended vehicle will need a license issued by the AFM. At the same time, the fund will need to comply with the regulations prescribed by the Dutch Central Bank, generally responsible for the prudential supervision of the financial companies and investment funds registered in this country.
Fund for joint account in the Netherlands
A way through which investors may set up a closed-ended fund is by registering a fund for joint account (FGR). The FGR is to be registered with the Authority for Financial Markets and it can be used as a tool for institutional and retail funds.
Businessmen interested in retail funds in the Netherlands may set up their financial operations through a hedge fund startup, a type of vehicle which also complies with the regulations prescribed by the AFM.
One of the characteristics of the FGR refers to the simple incorporation procedure, completed through an agreement between the parties participating in the fund.
Businessmen interested in registering a closed-ended fund are invited to contact our team of affiliates in the Netherlands for further information on this topic, including the documents that will be required in this case, as well as on the tax regulations applicable to this type of vehicle.