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Privacy and protection structures

Privacy and Protection Structures

In the Netherlands, a significant amount of information about entrepreneurs and their businesses is publicly accessible. This includes details that may be of interest not only to potential clients or journalists but also to competitors and criminals. For instance, annual accounts are often available via the Dutch Chamber of Commerce. Similarly, ownership of real estate can be obtained through the Kadaster (land registry) and the WOZ-waardeloket (property valuation tool). Additionally, public information can be easily accessed through search engines and other means.

As an entrepreneur, you may wish to minimize your exposure, safeguarding the privacy of yourself, your family members, and your assets. Beyond privacy, protecting assets from personal creditors is another crucial concern for many business owners.

The introduction of the UBO (Ultimate Beneficial Owner) register in September 2020 has reduced privacy options for individuals holding direct or indirect ownership stakes exceeding 25%. Despite this, several fully legal structures remain popular for enhancing privacy and providing legal protection from personal creditors, particularly in family contexts.

STAK-BV

Features of a STAK Structure

  1. Legal Protection from Personal Creditors

    • A STAK (Stichting Administratiekantoor, or Dutch Foundation) becomes the legal owner of the underlying assets, providing a layer of legal protection. Beneficiaries receive depository receipts issued by the STAK, granting them economic ownership without direct legal ownership.
    • This separation shields assets from personal creditors of the beneficiaries.

  2. Visibility in the UBO Register

    • Beneficiaries with more than a 25% interest will be visible in the UBO (Ultimate Beneficial Owner) register, in line with recent regulations.
    • Ownership held by minor children is not attributed to their parents, meaning children with interests exceeding 25% can qualify as UBOs independently.

  3. B.V. as the Holding Company

    • The B.V. (Besloten Vennootschap, a Dutch private limited company) in this setup typically holds foreign subsidiaries.
    • While the B.V. must publish financial statements, only its equity as of the year-end is publicly visible. Profit and loss accounts remain private unless statutory audit requirements apply.

Pricing: Setup and Maintenance

  1. Incorporation Costs

    • STAK Incorporation and Issuance of Depository Receipts: €2,500.
    • B.V. Incorporation (Holding Purposes): €1,080.

  2. Annual Maintenance Fees

    • STAK: Maximum of €250 annually.
    • B.V.: €2,095 annually (2022 rates), covering:
      • Bookkeeping and quarterly VAT return filings.
      • Preparation of annual and publication reports for filing with the Dutch Chamber of Commerce.
      • Preparation of the Dutch corporate income tax return.
      • Based on a maximum of 100 euro-denominated invoices and bank transactions annually. For specific scenarios, refer to our calculator on the pricing page.

  3. Registered Address

    • A mandatory registered address for the STAK and B.V. is available starting at €39 monthly per entity.

  4. Director Fees

    • A suitable director (natural person) costs approximately €10,000 annually for both the STAK and the B.V.
    • Hourly fees for directors range between €250 and €300.

Open-CV

Update 9 February 2022: changes in law that may seriously affect the tax ramifications of the Open CV are being discussed. A bill to this end may be presented during 2022 whereas changes may at the earliest be enacted as from 1 January 2023.

An Open-CV (Open Commanditaire Vennootschap) is a partnership structure consisting of a general partner (typically a Dutch foundation) and a limited or silent partner. In family arrangements, the limited partner is often a STAK (Stichting Administratiekantoor).

Features of an Open-CV Structure

  1. Legal Protection from Personal Creditors

    • The general partner (foundation) and the limited partner (STAK) are the legal owners of the underlying assets, shielding them from personal creditors of the beneficiaries.
    • Beneficiaries hold economic ownership via depository receipts issued by the STAK.

  2. UBO Register Visibility

    • Beneficiaries with an interest exceeding 25% will be visible in the UBO (Ultimate Beneficial Owner) register.
    • Ownership attributed to children is not linked to their parents, maintaining their separate UBO status.

  3. Privacy of Financial Information

    • The Open-CV is registered with the Dutch Chamber of Commerce but is not required to publish financial statements.

  4. Use of a STAK as Silent Partner

    • A STAK is recommended as the limited (silent) partner due to its legal protection features and its ability to centralize control, preventing individual family members from directly influencing operations or decisions.

  5. Tax and Structuring Recommendations

    • For better structuring and tax treaty protection, it is advised to use a separate B.V. to hold foreign subsidiaries rather than having the Open-CV own them directly.

Pricing: Setup and Maintenance

  1. Setup Costs

    • Establishing an Open-CV with a foundation as general partner, a STAK as limited partner, issuing depository receipts, and drafting the Open-CV partnership agreement: €6,000.

  2. Annual Maintenance Fees

    • Foundation and STAK (combined): Maximum of €500 annually.
    • Open-CV: €1,740 annually, which includes:
      • Bookkeeping and quarterly VAT return filings.
      • Preparation of an annual report.
      • Preparation of a Dutch corporate income tax return.
      • Based on up to 100 euro-denominated invoices and bank transactions annually.
      • For specific situations, refer to our pricing page.

  3. Maintenance Fees for a Holding B.V.

    • €2,095 annually (see earlier details for inclusions).

  4. Registered Address

    • A mandatory registered address for the foundation, STAK, Open-CV, and B.V. is available starting at €39 monthly per entity.

  5. Director Fees

    • A suitable director (natural person) charges €6,500 annually for overseeing the foundation, STAK, Open-CV, and B.V. collectively.
    • Hourly rates range from €250 to €300.
 

Open Mutual Fund (Fonds voor Gemene Rekening)

An Open Mutual Fund is a collaborative arrangement between multiple participants who pool funds for joint investment purposes.

Features

  1. Tax Treatment

    • The Dutch tax authorities classify an Open Mutual Fund as suitable only for passive investments, not for holding active companies.

  2. Participation Requirements

    • There must be at least one additional participant holding at least 10% of the fund.
    • This participant cannot be a minor child or a spouse if married in community of property (community of goods).

  3. Privacy and Reporting

    • The Open Mutual Fund is not required to register with the Dutch Chamber of Commerce and is exempt from publishing financial statements.

  4. UBO Register

    • Participants with more than a 25% interest will be visible in the Ultimate Beneficial Owner (UBO) register.

Additional Information

  • All pricing and details are based on 2022 rates and are exclusive of 21% VAT.
  • For personalized advice tailored to your specific situation and further details about our services, we invite you to book a consultation (via ZOOM or in-office) with one of our tax experts. Schedule your meeting here.