The Alternative Investment Fund Managers Directive (“AIFMD”) entered into force on 21 July 2011 and the Netherlands implemented the laws and regulations necessary to comply with the AIFMD in the Dutch Financial Supervision Act (Wet op het financieel toezicht, “FSA”) and lower regulations on 22 July 2013. value, term and interest rate, or shares in a green investment fund. Certain other operational requirements are also relevant, such as customer due diligence requirements on the basis of the Dutch implementation of the (revised) Fourth Anti-Money Laundering and Terrorist Financing Directive, which is applicable to Dutch UCITS. On the basis of their home country rules implementing the AIFMD, authorised AIFMs from other EEA Member States may also be required to provide a prospectus when marketing to Dutch investors, pursuant to article 32 AIFMD. A shareholder of an NV is, in principle, not personally liable for acts performed in the name of the company and does not have to contribute to the losses of the company in excess of the amount to be paid up on his shares. The FBI can elect to apply a so-called reinvestment reserve (, Directive (EU) 2019/1160 amending the UCITS Directive and the Alternative Investment Fund Managers Directive with regard to the cross-border distribution of collective investment undertakings; and. An AIFM within the EEA that is not authorised in another EEA Member State is not allowed to manage Dutch AIFs on a cross-border basis. The licence requirements relate to, inter alia, the suitability and trustworthiness of the board members, the operational and control structure, the management of potential conflicts of interests, the appointment of a depositary, solidity and minimum own funds requirements. In the Netherlands, depending on the tax analyses performed in relation to them, alternative investment funds (AIFs) are generally structured in the form of a limited partnership (commanditaire vennootschap, or CV), a co-operative (coöperatie, or Coop), a contractual fund for joint account (fonds voor gemene rekening, or FGR) and/or a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid, or BV), or a combination thereof. such shareholder voluntarily assumes liability for the obligations of the company; in exceptional circumstances, where "hiding" behind separate legal identities constitutes an abuse of law, such shareholder may be identified (. It is, in principle, prohibited in the Netherlands for an AIFM to manage an AIF or to market interest in an AIF without having obtained a licence from the AFM. In principle, in the Netherlands such depositary is subject to a licence requirement (a depositary generally holds a licence as a trust office, investment firm or credit institution), unless a specific exemption to the licence requirement is available. The BV is the Dutch equivalent of a private company with limited liability, and is generally the preferred legal form for privately held companies in the Netherlands. The closed character requires that any admission or substitution of a limited partner, as well as any change in relative interests among the existing limited partners, is subject to the prior unanimous consent of all partners, both general and limited partners. AIF stands for Alternative Investment Funds and include all investment funds that have not yet been regulated by the European Union. (wettelijke aansprakelijkheid – unlimited liability), B.A. Volta Ventures We invite you to address to our team for any matter related to the incorporation of an investment fund. I'm new to the Netherlands. A Dutch UCITS, however, should take into account certain specific investment limitations as set out in the Dutch implementation of the UCITS directive. Nevertheless, as a general rule, fund managers typically start discussing the structure and terms and conditions of the investment fund with their professional advisers. A licensed ManCo can manage a new UCITS if it has submitted the notification from UCITS to the AFM at least two weeks prior to the marketing of the respective UCITS. (e.g. Aqua-Spark is a global investment fund based in Utrecht, the Netherlands that makes investments in sustainable aquaculture businesses that generate investment returns, while creating positive social and environmental impact. Investment funds in the Netherlands 9 2.2Noncorporate entities 2.2.1Limited partnership (CV) A ‘commanditaire vennootschap’or CV is the Dutch equivalent of a limited partnership, i.e., a contractual arrangement between one or more general partners and one or more limited partners jointly to undertake activities with a view to profit. In principle, assets cannot be held by a CV in its own name, but are held either by a community of property of the partners (gemeenschap) or by one or more partners or a third party for the account of the community of property of the partners. As a type of association, the Coop is a separate entity from its members (ie, it has separate legal personality), with legal title and beneficial ownership of its assets. The underperformance of active funds is present in all markets globall… If the AIF has no legal personality, the legal ownership of the assets under management have to be held by a separate legal entity whose sole object stated in the articles of association is holding the legal ownership of the assets of investment funds. There is an exception from the above-mentioned licence obligation for Dutch AIFMs who can make use of the so-called "small managers registration regime" (Small Managers Regime) of section 2:66a of the AFS. If the investment fund is structured in the form of a "closed limited partnership under Dutch law" (ie, a tax-transparent entity for Dutch tax purposes) or a Coop, the fund documentation will most likely contain provisions pursuant to which the unanimous prior consent of the investors is required for certain transfers and/or admissions. This list of venture capital investors headquartered in The Netherlands provides data on their investment activities, fund raising history, portfolio companies, and recent news. A Closed FGR is a transparent entity for Dutch tax purposes. The main fund investors located in the Netherlands investing in investment funds are Dutch pension funds, commercial banks and insurance companies. Hereto, the regulation requires financial market participants (such as AIMFs) and financial advisers (including AIMFs with a MiFID top-up) to make pre-contractual and ongoing disclosures to end investors when they act as agents of those end investors (principals). Find the top rated Europe Stock mutual funds. It is a contractual arrangement sui generis (often referred to as its terms and conditions) between a manager and its investors (ie, the participants), obliging the manager to invest and manage assets contributed by the participants for their joint account. Both the Open FGR and the NV BMVK are suitable for the set up for (semi) open-end and closed-end funds as well as for umbrella funds. The FBI can apply a rebate for the amount of directly suffered (foreign) withholding taxes against the FBI’s own obligation to remit 15% Dutch dividend tax to the Dutch tax authorities, withheld in respect of its own profit distributions. Central to the way BNP Paribas Investment Partners works is the concept of partnership – both in terms of how it behaves as a family of companies and its relationships with its clients. From a tax perspective, a Dutch investor that applied for the tax status of a VBI or FBI is not allowed to invest in a tax-transparent investment fund that is considered to be engaged in a trade or business from a Dutch tax perspective. In addition to its stable business and political environment, the Netherlands has various tax advantages that also make it an attractive fund jurisdiction. 35 approved projects financed by the European Investment Bank (EIB) with EFSI backing This term of two weeks is a request from the AFM and is not provided for in Dutch legislation, but it is advisable to take the waiting period into account. Netherlands: Withholding tax on dividends paid to foreign investment funds (Dutch Supreme Court decision) October 26, 2020 The Dutch Supreme Court (Hoge Raad) issued a decision in a case concerning the compatibility of the Dutch withholding tax on dividends distributed to non-resident investment funds with EU law. In the Netherlands, an investor is currently able to buy index funds in the form of exchange-traded funds (ETFs) through a bank or broker and there are some companies offering index mutual funds. Authorised Dutch UCITS have to appoint a depositary. In this respect, please see 3.1.4 Disclosure Requirements. Investment funds in Netherlands Tier 1 firms Allen & Overy LLP Allen & Overy LLP remains one of the key firms for funds work in the Netherlands, with significant experience in fund formation, restructuring, and regulatory work, as well as a solid list of limited partner clients, which it … Orthos Ventures. Pursuant to Dutch law, security over receivables can be established by way of a disclosed right of pledge, or by way of an undisclosed right of pledge. Licensed AIFMS have to appoint a depositary for the AIF. It could also play a role in the debate in Germany itself. Shareholders of an NV are required to hold at least one physical meeting each year. Public investment funds in the Netherlands - 2020 Public investment funds in the Netherlands - 2020. There are also multiple Dutch family offices and multi-family offices/asset managers, high net worth individuals and regional public investment institutions that invest in funds. As a location for private equity and venture capital funds, the Netherlands is typically used by managers who operate in and from the Netherlands – ie, in situations where the majority of the management team resides in the Netherlands and operates from an office in the Netherlands. Effectively, the (foreign) withholding tax levied in connection with the investments of the FBI will be converted into Dutch withholding tax, for which the retail investors may be eligible for a credit or (partial) refund. The letters W.A. The Disclosure Regulation aims to reduce information asymmetries in principal-agent relationships with regard to the integration of sustainability risks, the consideration of adverse sustainability impacts, the promotion of environmental or social characteristics, and sustainable investment. If the AFM, as competent supervisory authority of the UCPA, deems that information provided to consumers is misleading or unfair, it may, for example, impose a fine on the (managers of the) fund in question. a shareholder receives a distribution in excess of the company’s freely distributable reserves while being aware – or when they should reasonably have been aware – that such distribution was not permitted. The FBI is required to meet statutory requirements as to its shareholders and leverage restrictions. Typically, financing granted to a Dutch fund would be secured by providing security in the form of a right of pledge over the receivables or contractual rights that the investors owe to the fund arising out of the fund agreement, such as the right to make drawdowns from the capital commitments. has been serving the investment fund industry for more than three decades. This includes hedge funds, funds of hedge funds… AIFs that currently produce a UCITS-like KID under the national retail top-up regime can benefit from an exemption to the PRIIPS KID requirements under the PRIIPS Regulation until 31 December 2021. Hedge Funds, Debt Funds, Real Estate Funds. At the end of 2019, the assets we manage for our pension funds and their 4.7 million participants in total represented a value that topped 538 billion euros. Pension Funds Netherlands. These funds are generally structured as an FGR, which is not a legal entity. With respect to custody services, a licence pursuant to MiFID II (2014/65/EU) may be required. Therefore, if a company gets into financial difficulties, its pension fund will not be affected. As a consequence of its tax transparency, any income and gains realised by investing through the Closed FGR are attributed to the participants as if the participants were investing directly in the investment portfolio of the FGR. As the authorisation pursuant to the AIFMD is, in principle, limited to professional investors, managers who intend to offer interest in the AIF they manage to non-professional investors (retail) in the Netherlands should comply with the so-called retail top-up. UNIIQ. Investors participate in a Coop as members, with corresponding membership interests. Aglaia Oncology Funds. In addition, the fund documentation generally provides that this consent shall be deemed to have been given if an investor has not declined its approval within four weeks of the date on which the request for approval was sent. For the period 2014-2020 it has set joint European goals under the Europe 2020 action plan, in which the member states have agreed, among other things, to strengthen their economies.. Purpose of ESI funds Certain other operational requirements are also relevant, such as customer due diligence requirements on the basis of the Dutch implementation of the (revised) Fourth Anti-Money Laundering and Terrorist Financing Directive, which is applicable to AIFs. What are the consequences for failing to register a fund … The UCITS claimed the repayment of the withholding tax levied on dividends received from Dutch companies between 2002 and 2008, based on equal treatment under EU law. The AIFM is not required to comply with the requirements under the retail top-up regime if interests are offered for a countervalue of more than EUR100,000 per investor. A Dutch AIFM that meets the AuM Thresholds and the Placement Restrictions as set out above and wants to make use of the Small Managers Regime needs to register itself and the AIF it manages/intends to market with the AF, by submitting a registration form (including, inter alia, an overview of the AuM and a description of the investment strategy). In principle, managers of AIFs that are active in the Netherlands fall within the scope of the AIFMD and the Dutch implementation thereof in the AFS and the rules and regulation promulgated thereunder. For all practical purposes, there are no material restrictions on borrowing funds, provided that funds are attracted from professional market parties (eg, banks, pension funds and those persons that commit at least EUR100,000). The AFM is usually careful in its assessments as it does not want to set undesired precedents. There is a variety of different compulsory and voluntary pension funds in the Netherlands. River Venture Partners. Take “Spec IV”, for example, an investment fund registered in the British Virgin Islands. Pursuant to the Dutch Trust Offices Act (Wet toezicht trustkantoren), it is prohibited to provide the following trust services (trustdiensten) in the Netherlands, unless a licence to do so has been obtained from the Dutch Central Bank (De Nederlandsche Bank N.V, DNB. In practice, however, these restrictions, do not result in any issues. Insights. Get in touch! How to Purchase Shares of a Dutch Company, Rules for AIF Managers in the Netherlands, Regulations on Investment Vehicles in the Netherlands, Free Allowance for Extraterritorial Costs - the 30% Ruling, Open a Merchant Account in the Netherlands, Yacht/Boat Registration in the Netherlands, Change Sole Proprietorship into General Partnership. Private equity funds are generally structured in the form of a CV, or a Coop. It easy for you, with corresponding membership interests License from Utrecht and... 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