Foundations in Netherlands Antilles
In 1998, the Netherlands Antilles introduced a new, separate legal entity under private law called the Private Foundation (StichtingParticulierFonds or SPF in Dutch). The Private Foundation is a more flexible and specific form of the common, legal entity foundation used for charitable purposes. The private foundation is actually a civil law equivalent to the Anglo-American trust and can act as a holding or investment company. The private foundation is the best alternative for private individuals wishing to protect their assets and estates from future creditors, bankruptcies and excessive taxes, as well as to make provisions for their families. Different from the common foundation, the private foundation is allowed to make distributions to its beneficiaries or to third persons designated by the founder. These distributions have to be of a charitable nature. The private foundation has no shareholders, share capital or members. The founder controls and supervises the activities of the board of directors which manages daily matters. The assets and liabilities of the private foundation are kept in its own name. The beneficiary, founder or members of the board of directors have no personal liability for debts or liabilities of the private foundation
Advantages of a private foundation
Family provisions.The private foundation is an ideal tool to make family provisions ensuring the control over your assets. By protecting assets against economic risks you can safeguard the future of your children and other family members.
Asset management/investment activities The private foundation can invest its assets following the wish of the beneficiary, without any restrictions to the type of investment.
Examples of these assets include:
- Shares, bonds, mutual funds, bank deposits
- Real estate
- Copyrights, licensing rights or powers to third parties
- Art collections
- A private foundation is exempt from any type of taxes in the Netherlands Antilles, providing the articles of incorporation clearly states its legal status as a private foundation. In general, a private foundation does not have to file a tax return, but if it does, it should explicitly be done in the name of a private foundation.
- Non-residents can transfer their assets or make gifts/distributions to the private foundation without having to pay gift taxes. Nevertheless, the donor may have to pay gift taxes in his country of residence.
- The private foundation does not pay any profit tax, as long as its activities cannot be qualified as a business and it does not run a corporation for profit.
- In many cases, the founder and beneficiary can reduce his/her income and estate tax burden in his/her country of residence.
- There are no succession duties on the assets of the private foundation.
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