Dutch foundations or “Stichting” in Dutch language, remain to be a widespread and effective type of a legal entity. As an orphan entity it allows to separate economic and legal ownership but it also has many other attractive features.
Historically, a Stichting was commonly used by charitable organizations. However, it became widely used in private structures for asset protection purposes as well as in family foundations. Stichting has no shareholders or members and its main organ is the board of directors. Stichting operates within the context of its Articles of Association. It is incorporated by a Dutch civil law notary upon which it is registered with the Trade register of the Dutch Chamber of Commerce.
One of the most popular types of a stichting is STAK – an administrative office foundation. It is used for shares of both foreign and domestic companies and other assets which can be contributed or issued directly to a STAK. In this structure STAK holds the assets in exchange for the issuance of depository receipts. The legal ownership of the shares is then held by a STAK, the economic interest stays with the depository receipt holder. The relationship between the depository receipt holder and the stichting is laid down in administrative conditions. These conditions can be tailored to specific needs similar to arrangements found in shareholders agreements. Stichting will exercise control over the company by exercising its shareholders rights (eg. voting rights). All distributions will be made directly to the depository receipt holders as economic beneficiaries.
Stichtings can be used in an SPV structure for holding shares in an entity which issues bonds, notes or holds certain collateral. It can also hold IP rights or various licenses that are of major importance for the business. There are stichtings that act as an escrow agent in corporate M&A transactions. And of course, family stichtings for formalization of inheritance plans as well as division of assets between family members.
We`d love to tell you more about Dutch stichtings. Do not hesitate to contact AZ for further support in relation to stichting structures!
Historically, a Stichting was commonly used by charitable organizations. However, it became widely used in private structures for asset protection purposes as well as in family foundations. Stichting has no shareholders or members and its main organ is the board of directors. Stichting operates within the context of its Articles of Association. It is incorporated by a Dutch civil law notary upon which it is registered with the Trade register of the Dutch Chamber of Commerce.
One of the most popular types of a stichting is STAK – an administrative office foundation. It is used for shares of both foreign and domestic companies and other assets which can be contributed or issued directly to a STAK. In this structure STAK holds the assets in exchange for the issuance of depository receipts. The legal ownership of the shares is then held by a STAK, the economic interest stays with the depository receipt holder. The relationship between the depository receipt holder and the stichting is laid down in administrative conditions. These conditions can be tailored to specific needs similar to arrangements found in shareholders agreements. Stichting will exercise control over the company by exercising its shareholders rights (eg. voting rights). All distributions will be made directly to the depository receipt holders as economic beneficiaries.
Stichtings can be used in an SPV structure for holding shares in an entity which issues bonds, notes or holds certain collateral. It can also hold IP rights or various licenses that are of major importance for the business. There are stichtings that act as an escrow agent in corporate M&A transactions. And of course, family stichtings for formalization of inheritance plans as well as division of assets between family members.
We`d love to tell you more about Dutch stichtings. Do not hesitate to contact AZ for further support in relation to stichting structures!