The benefits of opening a Dutch foundation (Sponsored)

Dutch flag on a business card
A business card featuring the Dutch flagImage: Promesa Studio / DepositPhotos

This sponsored article was produced with and paid for by BridgeWest.

The Netherlands is a very appealing business destination from several points of view. Foreign businesspeople highly appreciate the various and numerous types of structures they can employ for protecting their assets in the Netherlands. Among these structures, the Dutch foundation is known as one of the most popular entities which can be created for the purpose of asset protection.

The advantages of forming this entity in the Netherlands compared to those in other European countries are far more extensive and some of them can be discovered below.

The Dutch foundation can own various types of assets

The variety of assets which can be protected by setting up a Dutch foundation includes real estate, bank accounts, physical assets and other private interests. Also, the establishment of such an entity does not require special attention as in other countries. For example, setting up the same structure in Italy could require the assistance of Italian lawyers.

Some Dutch foundations can undertake commercial activities

Just like when setting up a Dutch company for operating as a commercial entity, a foundation can be entitled to earn profits from similar activities. The main condition to be respected in order to undertake commercial activities is for the foundation to be listed with the Dutch Commercial Register.

This structure benefits from one of the simplest and fastest registration procedures which can be completed in a matter of days.

The foundation offers full foreign control to its members

The foundation falls under the Civil Code in the Netherlands, which stipulates that foreign control is allowed. Moreover, the assets held by the Dutch foundation can be located anywhere in the world. Under the same law, the foundation benefits from full privacy with respect to the founders, beneficiaries and even the assets they hold. This information must be disclosed only when the foundation is registered with the Dutch Commercial Register.

Returning to the previous example with Italy, it is not possible to use a foundation for commercial purposes, therefore one will need to register an Italian business for such activities.

The Netherlands does not impose any taxes on foundations

Another important benefit of the Dutch foundation is related to taxation: A foundation typically only has to pay tax over its assets if it is actively engaged in commercial business dealings. Better still, there are many exemptions and deductions available to a foundation that Dutch businesses cannot access. However, in the case of foreign founders, reporting requirements may apply.

The foundation is one of the most advantageous estate planning tools, however, in the Netherlands it can also be used for some commercial activities. This is why when choosing a country for establishing such structures, the Netherlands can be a great option.