Dutch Private Foundation is a civil law alternative for the Anglo-Saxon Trust for the purpose of asset protection. It is a legal entity with its own rights and obligations, can hold assets in its own name and have beneficiaries including a settlor.
Key features of the Dutch Private Foundation:
• Tool suitable for asset protection and estate planning,
• Legal personality,
• Beneficiaries, protectors, letter of wishes,
• No restrictions for distributions,
• Tax transparent entity, i.e. it does not pay a corporation tax,
• Confidentiality as no beneficial owner registration required.
The Dutch Private Foundation (DPF) can be incorporated by any person. Such person does not have to be the same person as the person subsequently transferring the assets to the DPF, named the “settlor”.
The DPF may not carry out business activities, but is allowed to hold various assets and passive investments, e.g. real estates, shares in a holding company, and receive a respective rental and passive income then to be distributed to its beneficiaries according to its Articles of Association and Letter of Wishes. The board of directors is charged with the management of the DPF. To supervise the board of directors, one or more protectors as the supervisory body may be established.
Profit distributions from the DPF to the settlor are disregarded from a tax perspective. Distributions from the DPF to other beneficiaries (e.g. a child) will be subject to gift tax in the jurisdiction of the beneficiary, i.e. country where the beneficiary is a tax resident. However, if there is no gift tax in such jurisdiction of the beneficiary, the beneficiary will receive the distributed money tax free.
Interested to set up your new private foundation in The Netherlands? Drop us an email (office@bensonformations.com) or give us a call (+44 20 3974 1244) at any time for expert guidance and assistance in your private foundation in The Netherlands.
