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Setting up a business foundation in the Netherlands can be a strategic move for asset protection and business flexibility. Among the various legal entities available, the Dutch Stichting, or a STAK (Stichting Administratiekantoor), stands out for its unique attributes and benefits. This article provides a comprehensive guide on starting a Dutch Stichting and navigating through the Dutch STAK formation process.

Understanding the Dutch Stichting

Before diving into the process of starting a Dutch STAK, it’s important to first understand what a Dutch Stichting is.

A Dutch Stichting, or Foundation, is a unique legal entity, akin to the civil law equivalent of the Anglo-Saxon ‘trust’. Unlike a ‘trust’, which is a ‘trust deed’ and not a legal entity, a Stichting is a corporate entity without any share capital or shareholders. This means the Stichting can own assets, operate a bank account, and engage in profitable or non-profitable activities, each subject to different tax treatments.

In the context of a STAK (Stichting Administratiekantoor), it is essentially a voting trust foundation that separates beneficial ownership from legal ownership. This makes it an effective tool for asset protection, as well as a strategic vehicle for managing private wealth.

Key Features of a STAK Structure

Here are some of the key features that set a STAK structure apart:

• Asset Management: A STAK can acquire and manage assets in its own name. This includes shares of companies, real estate, stocks, and other valuable assets.

• Issuance of Certificates: A STAK can issue certificates representing the economic value of the assets it holds. These certificates are typically issued to ‘economic owners’ or investors.

• No Shareholders: Unlike traditional corporations, a STAK does not have any shareholders. Instead, it is governed by a board of directors or managers.

• Independent Legal Entity: A STAK is an independent legal entity with rights and obligations. It has full legal capacity to enter into contracts, sue, and be sued.

• Tax Considerations: A STAK is not liable for any taxes as long as it is only involved in passive investments. However, if it becomes operational, it may be subject to certain taxes, depending on the nature of its activities and profits.

Why Start a Dutch STAK?

A Dutch STAK offers several advantages, making it a popular choice for both domestic and international investors:

• Asset Protection: As an independent legal entity, a STAK can own assets in its own name, ensuring a high level of asset protection. This is particularly beneficial for family-owned businesses, private investors, and multinational corporations.

• Flexibility: A STAK offers considerable flexibility, especially in terms of its structure and governance. It can be set up with a single manager and does not require any shareholders.

• Tax Efficiency: If a STAK solely holds a foundation and does not engage in commercial activities, it will not be subject to corporate income tax or VAT. This can result in significant tax savings.

• Confidentiality: The details of the certificate holders in a STAK are not publicly disclosed, ensuring a high level of confidentiality.

• Control: Despite the separation of legal and beneficial ownership, the board of a STAK can retain significant control over the company’s operations.

Steps to Start a STAK in the Netherlands

Starting a STAK in the Netherlands involves several steps, including drafting a notarial deed, registering with the Dutch Trade Register, and more. Here’s a step-by-step guide to the process:

1. Draft a Notarial Deed: The first step in starting a Dutch STAK is to draft a notarial deed. This deed should be written in Dutch and must include key information such as the name of the STAK, its purpose, the appointment of directors, and more.

2. Register with the Dutch Trade Register: Once the notarial deed has been drafted, the next step is to register the STAK with the Dutch Trade Register. This is a crucial step as it gives the STAK legal recognition.

3. Open a Bank Account: After registration, you’ll need to open a bank account for the STAK. This is necessary for managing the STAK’s assets and carrying out its financial transactions.

4. Issue Certificates: After setting up the bank account, the STAK can start issuing certificates representing the economic value of its assets. These certificates can be issued to investors or ‘economic owners’.

5. Start Operations: Once all the above steps have been completed, the STAK can start its operations. Depending on its activities, it may need to register for taxes.

This entire process can take up to four weeks. The Dutch House of Companies provides a self-governance portal that allows you to start a business in the Netherlands, without visit, at a fixed yearly fee. Start your company formation in the Netherlands now!

The Role of Participants in a STAK

In a STAK, the role of participants differs significantly from that in traditional corporations. Given the unique nature of a STAK, it does not have any shareholders. Instead, it is governed by a board of directors or managers. These individuals are responsible for managing the STAK’s operations and making key decisions.

In some cases, a STAK may issue certificates to ‘economic owners’. These individuals do not have voting rights but are entitled to the economic value of the STAK’s assets. This separation of legal and beneficial ownership is a key feature of a STAK and is one of the reasons why it is such an effective vehicle for asset protection and business flexibility.

Administrative Conditions of a STAK Structure

The administration of a STAK structure is governed by a document known as the ‘trust conditions’. This document sets out the terms and conditions of the STAK, including the rights and obligations of the STAK, the board, and the certificate holders.

The trust conditions do not have to follow a specific model, as each STAK may have its own unique set of conditions. However, they must comply with Dutch contract law. It’s also important to note that the trust conditions can remain confidential, providing an added layer of privacy for the STAK’s participants.

Tax Considerations for a STAK Structure

In terms of taxation, a STAK is only liable for taxes if it operates as a business. In such cases, it will need to register for taxes and will be subject to corporate tax on its commercial activities and economic transactions.

However, if a STAK solely holds a foundation and does not engage in commercial activities, it is not subject to corporate income tax or VAT. This can result in significant tax savings for the STAK.

Furthermore, distributions by Dutch STAK structures are not subject to Dutch gift tax, as the beneficiaries are deemed to have acquired their benefit directly from the transferor. This is one of the many tax advantages of starting a Dutch STAK.

Final Thoughts

Setting up a STAK structure in the Netherlands can offer a range of benefits, from asset protection to tax efficiency. However, it’s important to understand the process and requirements involved. With careful planning and the right guidance, starting a Dutch STAK can be a strategic move for your business or personal wealth management. Whether you’re a domestic or international investor, a STAK structure can provide a flexible, confidential, and tax-efficient solution.