Start an Open-End Fund in the Netherlands
Updated on Thursday 19th October 2017
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Through an open-end fund in the Netherlands, the investors will be allowed to issue an unlimited amount of shares. Investors should know that most of the mutual funds are registered as open-ended structures, as this option provides better investment opportunities. Businessmen interested in how to start a fund in the Netherlands as an open-ended vehicle can issue the shares in investments in bonds and stocks. Such shares must be sold and bought at their net asset value, which is established at the end of the trading day.
Retail funds in the Netherlands
One of the ways to establish an open-ended vehicle in the Netherlands is by opening a retail fund, which is generally used for smaller initial investments, compared to a hedge fund startup, for example.
In the Netherlands, investors can set up the following types of open-end retail funds:
• investment company;
The difference between the two types of structures is given by the fact that the first has a legal personally, contrary to the latter mentioned.
In the situation in which the open-ended fund offers participation rights, the vehicle will be regulated under the rules of the Financial Markets Supervision Act (FMSA).
Further on, the retail funds established as open-ended vehicles may be set up as one of the following:
• exempt investment fund (EIF);
• fiscal investment fund (FIF).
The EIF in the Netherlands benefits from certain tax exemptions, including a full exemption on the payment of the corporate tax and the withholding tax on distributions. FIF benefits from similar tax regulations, with the mention that the withholding tax is imposed at the rate of 15%, but lower rates may apply if a double taxation treaty applies.
Supervisory authorities for Dutch open-ended vehicles
The procedure on how to start an investment fund in the Netherlands for an open-ended vehicle falls under the supervision of specific authorities. One of the main bodies established in this sense is the Authority for the Financial Markets (AFM), which has the purpose of ensuring that the transparency procedures are respected by the investment companies.
The other relevant institution regulating the open-ended vehicles is the Dutch Central Bank (DNB). The authority is in charge with establishing prudential supervision.
Foreign investors may receive further information on the open-end vehicles from our team of partners. Please contact our team of affiliates in the Netherlands for consultancy services on the open-ended funds.