Trust management Netherlands

Trust management companies are highly regulated in the Netherlands for the last few years. Many firms are starting their local live in the Netherlands via trust firms and evolving to operating firms in a later stage.

Endeavour Enterprises N.V. is not a trust office, but works closely with a licensed trust firm and enabling foreign firms to enjoy the trust incubation time while having the option to evolve in a short time to the operations stage. Together with the client, we decide what kind of services the customer initially needs and work accordingly.

Trust offices services

When a foreign firm decides to operate in the Netherlands, they often find a hired management team as their best solution. That is true also on a very low scale of operations. Mostly, a local Dutch trust management will step forward offering to provide the basic legal requirements on behalf of the foreign firm.

The trust firm will provide the minimum legal requirements depicted by Dutch law for a local corporation to operate: registered address, directorship and accounting services. This is a typical and practical solution for the foreign firm that does not wish to employ people or rent its own office.

Dutch trust companies evolved and flourished significantly over the last few decades providing administrative services, however, some of them were involved in none- legal issues, violated tax rules and abused their positions towards both the clients and the authorities. These were only minority cases, however they caught the media attention and the regulatory offices.

Since 2004 the Dutch authorities introduced licensing system of trust companies known as the Act on the Supervision of Trust Offices (ASTO) supervised by the Nederlandse Bank, Dutch Central bank and forcing all trust companies in the Netherlands to obtain a license and to adhere to specific relevant regulation and inspection. The license process includes tests of  trustworthy test of trust firm’s managing directors and other key personnel. 

In addition to ASTO, a trust management firm in the Netherlands has to comply with the following acts:

Regulation on Sound Operational Management under the ASTO (RIB);

Disclosure of Unusual Transactions (Financial Services) Act (Wet Mot);

Identification (Provision of Services) Act (WID);

Sanctions Act (Sanctiewet)

It is essential to stress that by their nature, Dutch trust management firms can usually provide basic services in terms of management and tax planning. Trust firms are usually cannot cope with managerial challenges or complicated tax issues.

Services provided by Trust management companies:

•           Management legal entities on behalf of foreign shareholders

•           Providing registered address in the Netherlands

•           Providing administration services: telephone answering, emails and post screening.

•           Tax filing to certain extent

•           Tax planning in some cases 

Trust management history

WW-2 encouraged Dutch companies to migrate their jurisdiction to the Dutch Antilles in an attempt to protect their assets. The local Antilles trust management developed services to support this war business migration and some of the local offices expanded their business and services back to the Netherlands right after the war.

Some holding entities in the Dutch Antilles often incorporated local Dutch holdings to enjoy the Dutch tax treaties, a phenomena that gain latter the popular name “the Dutch Sandwich”.

The Netherlands, as an open economy is heavily dependent on international business, created a unique tax feature known as the “participation exemption”. This feature states that dividends received and capital gains realized on the sale of shares in foreign subsidiaries were not taxed again in the Netherlands when repatriated to the Netherlands. The Netherlands also entered into more than 70 double taxation treaties with other countries in order to facilitate its position as leading EU country supporting financial services.

Since the Netherlands also do not levy any withholding tax on interest and royalty payments, it became a perfect location for setting of holding, finance and royalty companies.

In the last recent years trust offices played a role in the provision of Special Purpose Vehicles (SPV’s) for complex structured finance transactions and the subsequent management of these SPV’s.

According to Dutch central bank, there are more than 140 licensed Dutch trust offices in the Netherlands promoting international firms and worldwide shareholders interests in setting their holding companies in the Netherlands.