Start a Fund for Joint Account (FGR) in the Netherlands
Updated on Sunday 04th June 2017
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Foreign investors interested in how to start a fund in the Netherlands can invest here by opening a fund for joint account. The vehicle, known in Dutch as fondsen von gemene rekening – FGR, is established as a mutual fund which, under the provisions of the Dutch investment legislation, provides a high level of flexibility for the investors. The FGR can be set up as institutional or retail investment funds.
Legal aspects concerning the FGR in the Netherlands
The fund for joint account in the Netherlands is not considered a legal entity. Investors interested in the procedure on how to start an investment fund set up as a joint account in the Netherlands will need to conclude a contractual agreement, signed by the fund’s manager and the investors of the vehicle.
Through the contractual agreement, the manager will be obligated to perform investment strategies in the name of the fund’s investors, by managing the assets the investors pooled in the vehicle.
The contractual agreement should also name the depositary of the fund. The depositary refers to the ownership of the fund’s assets. This legal document has to be concluded through a notarial deed, involving the above mentioned parties.
Taxation of the FGR in the Netherlands
A FGR in the Netherlands can be set up as one of the following structures:
• open-end FGR;
• closed-end FGR.
In a closed-end FGR, the structure will not be liable to paying the corporate tax on income and the withholding tax, as it is considered a transparent type of fund.
In the case of an open-end FGR, the corporate tax on income and the withholding taxes are applicable under the Dutch legislation. Still, the investors can benefit from tax exemptions in this sense, if the fund is registered as one of the following:
• exempt investment institution;
• fiscal investment institution.
Other types of funds which can be registered as open-end or closed-end structures in the Netherlands refer to hedge fund startup, which must be incorporated following the regulations of the Authority for Financial Markets.
Businessmen are invited to contact our affiliates in the Netherlands for in-depth details on the registration of a fund for joint account.