Types of Investment Funds in the Netherlands
Updated on Tuesday 13th June 2017
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The legislation referring to the investment vehicles which can be set up in the Netherlands stipulates that that such structures can be registered as investment funds or investment companies. Investors interested in the procedure on how to start an investment fund may register the vehicle as a open-ended or closed-ended business form.
Legal entities for Dutch investment funds
The legal framework applicable to the Dutch investment funds is comprised of different legal acts, depending on the types of vehicles they regulate. For example, closed-ended funds in the Netherlands are regulated by the Prospectus Directive, implemented following the legislation applicable in the European Union (EU). Regardless if the fund is registered as an open-ended or closed-ended structure or as other related vehicle, such as a hedge fund startup, the Dutch legislation prescribes the following legal entities:
• limited liability company (NV);
• public limited liability company (BV);
• limited partnership;
• fund for joint account (FGR).
The businessmen who want to know how to start a fund in the Netherlands may also choose to register an investment company with variable capital (BMKV). This legal structure will act as an investment fund, as the investors will be allowed to create umbrella funds within the fund, with the main difference that the company is not required to list its shares on the local stock market.
Corporate vs. non-corporate entities in the Netherlands
The legal entities available for investment funds in the Netherlands are separated into two main categories:
• corporate entities;
• non-corporate entities.
Corporate entities are the BN, NV, BMKV and the cooperative. Non-corporate entities are represented by the limited partnership and the FGR.
The taxation framework applicable to these structures is different, depending on the tax system in which they are included. The Dutch taxation system states that the legal entities available for investment funds can be set up as transparent or opaque (non-transparent) entities.
In the case of a non-transparent entity, the Dutch authorities will impose the corporate tax on income and capital gains.
Our partners can offer more details on the taxation system applicable to the above mentioned structures. Please contact our affiliates in the Netherlands for more details on the legislative framework applicable to investment funds.