The Netherlands has a well-developed investment market benefiting from a solid and favourable tax, legal and regulatory framework, and the presence of large institutional investors (primarily pension funds).

Over the past few years, the most discussed topic in the industry has been the implementation of the EU Directive on Alternative Investment Fund Managers (AIFMD). The AIFMD was implemented in Dutch national legislation on 22 July 2013. The EU regulations on European venture capital (VC) funds and on European social entrepreneurship (SE) funds came into force on the same date. On 18 March 2016, UCITS V was implemented in Dutch law. The implementation bill included a licence requirement for all depositaries, including both UCITS and AIFMD depositaries.

A recent topic that has been extensively discussed has been the Dutch Act on remuneration policies for financial undertakings, which came into force on 1 January 2015. The most restrictive provision of this Act (a 20 per cent cap on variable remuneration), however, is not applicable to managers of collective investment schemes, not even if, under their alternative investment fund manager (AIFM) or undertakings for collective investments in transferable securities (UCITS) manager licence, these managers provide investment services such as discretionary portfolio management. As a result, variable remuneration is not capped for managers of collective investment schemes in the Netherlands. This has resulted in a consolidation of MiFID firms with AIFMs and UCITS management companies in which MiFID licences have been withdrawn and a lot of investment services are being provided under an AIFM or UCITS management company licence.


i Types of regulatory regimes

Since the AIFMD has been implemented in the Netherlands, a distinction can be made between six types of regulatory regimes (it is assumed here that the relevant manager and the relevant fund are located in the same country):

  • a UCITS;
  • b alternative investment funds (AIFs) offered to retail investors;
  • c AIFs offered to professional investors;
  • d sub-threshold AIFs;
  • e third-country AIFs; and
  • f VC and SE funds.

Currently, the implementation of UCITS V is one of the most important topics of discussion among fund managers in the Netherlands. Although the Netherlands is not known for its UCITS industry, several UCITS have been established in the Netherlands.2

The Netherlands used the Member State option to create an exemption from the requirement to have a depositary for a UCITS, which exemption can be used by investment companies established in the Netherlands that market their units exclusively or almost exclusively through one or more stock exchanges on which their units are admitted to an official listing. UCITS V no longer provides this possibility, and the implementation of UCITS V will result in an obligation for several Dutch UCITS to appoint a depositary.

AIFs offered to retail investors

The AIFMD does not provide rules for investment funds aimed at retail investors, except for the option to impose stricter requirements for such investment funds and their managers. Supervisory law regarding non-UCITS retail investment funds remains the responsibility of the national legislators. The Dutch legislature has chosen to impose stricter requirements for managers of investment funds aimed at retail investors (non-UCITS, the ‘top-up requirements’) and started from the basic premise that investor protection should be similar to investor protection in the case of UCITS investment funds (except for investment restrictions and the requirement that UCITS investment funds must be open-ended). This has created a level playing field in the Netherlands for investment funds aimed at retail investors (UCITS and non-UCITS). AIFMs established in other Member States have access to the Dutch retail market, provided that such AIFMs comply with the top-up requirements.

The ‘top-up requirements’ do not apply if the minimum investment to be made in the fund is €100,000. EU AIFMs may target their funds to retail investors willing to make such investments of €100,000 or more. If the AIFM is a non-Dutch AIFM, the normal passporting procedure must be complied with, and the Dutch regulator must be notified directly by the AIFM of the intention to market to these types of retail investors.

AIFs that are subject to the registration regime (see ‘Sub-threshold AIFs’, below) and that are managed by a Dutch AIFM may also be offered to retail investors in the Netherlands if one of the following criteria is met:

  • a the units in the AIF are marketed to fewer than 150 persons not being qualified investors; or
  • b the nominal value per unit or the total consideration of an investor amounts to at least €100,000.
AIFs offered to professional investors

The AIFMD introduced two regimes in the Netherlands for managing and marketing investment funds aimed at professional investors: a fully fledged AIFMD regime and an AIFMD registration regime. An AIFM is subject to the fully fledged AIFMD regime, unless the AIFM is eligible for and wishes to use a de minimis exemption and will therefore fall under the scope of the AIFMD registration regime.

The fully fledged AIFMD regime includes an authorisation requirement and a requirement to comply with certain continuing obligations, of which the most important are related to the organisation of an AIF, including transparency, risk management, liquidity management, valuation, and the depositary, remuneration, leverage, capital and control in non-listed companies.

Sub-threshold AIFs

The de minimis exemption is applicable to AIFMs whose assets under management (AUM) do not exceed €100 million; and, in the case of unleveraged AIFs, AIFMs whose AUM do not exceed €500 million, and that have no exercisable redemption rights during the five years following the initial investment in each AIF.

These AIFMs are eligible for the AIFMD registration regime, which is less strict than the full AIFMD regime. This means that such AIFMs only have to comply with a registration requirement and certain information requirements. Consequently, such AIFMs do not benefit from any rights granted under the AIFMD, including a passport, unless such AIFM chooses to opt in under the AIFMD. Unlike the legislation of some other EEA Member States, Dutch law does not allow AIFMs that are registered as sub-threshold in their home Member State to market their funds in the Netherlands on a private placement basis.3

VC funds and SE funds may also obtain a passport pursuant to the regulations on VC funds and SE funds (see ‘AIFs offered to professional investors’, above).

Third-country AIFs

AIFMs based in non-EEA jurisdictions wishing to market AIFs in the Netherlands to professional investors will be required to notify the Dutch regulator with the documents required under the AIFMD.

Under certain circumstances, non-EEA fund managers may also market their funds to retail investors in the Netherlands. This is only possible if such non-EEA fund manager is subject to adequate supervision in a country designated by the Dutch Ministry of Finance (e.g., in Jersey, Guernsey or the United States). It is expected that this specific provision to gain access to the Dutch retail market will cease to exist during 2018.

VC and SE funds

As part of the larger European framework on investment funds, the EU regulations on VC and SE funds came into force on the same date as the implementation deadline of the AIFMD (22 July 2013). These regulations are directly applicable in the Netherlands and do not have to be implemented into Dutch law.

VC and SE funds benefit from a separate independent passport enabling them to be marketed in the EU to eligible investors. To qualify as a VC or SE fund, a fund must pass several tests, including a portfolio test and a qualifying investment test, and it may not have more than €500 million of AUM.


i Types of fund vehicles

Various types of fund vehicles are available in the Netherlands for structuring an investment fund. The main distinction between these fund vehicles is whether they are with or without legal personality. The following vehicles are mainly used for structuring investment funds in the Netherlands: with legal personality – limited liability company (BV or NV) and cooperative; and without legal personality – limited partnership (CV) and fund for joint account (FGR).

Which fund vehicle is chosen as the legal form of the investment fund will depend, inter alia, on the relevant tax aspects and preferences of the proposed investors. All vehicles can be open-ended or closed-ended.

A brief description of the various fund vehicles is given below.

BVs and NVs

The most common types of fund vehicles with legal personality are the BV (a private company with limited liability) and NV (a public company with limited liability), which both have a capital divided into shares. The most important differences between the BV and NV are that the BV provides for much more flexibility than the NV in respect of a number of areas that may be relevant when engineering the fund structure, such as its share capital, criteria for distributions to shareholders and voting rights. Additionally more stringent capital protection restrictions apply to NVs. On the other hand, shares in a NV can be included in the Dutch giro system (and as a result be listed on for example Euronext Amsterdam), while the shares in a BV cannot be included in the Dutch giro system.

A special type of NV especially equipped for investment funds is the investment company with variable capital (BMVK). The main benefit of a BMVK is that more flexible rules apply concerning the capital of the NV. The managing board has the authority to issue and repurchase shares, unlike an ordinary NV where, in principle, the shareholders’ general meeting is the authorised body. Furthermore, no pre-emptive rights when issuing shares exist, and when cancelling repurchased shares, the opposition period for creditors that normally applies to NVs does not apply.


The cooperative is an association whose object is to satisfy specific material needs of its members by entering into agreements with them and for their benefit in the course of its business. The cooperative has legal personality. Although the cooperative is a legal entity, it shares some characteristics with partnerships in the sense that there are no minimum capital requirements for a cooperative and its capital may be expressed in a currency other than the euro. In many cases, the funds provided by a member of the cooperative are entered in a members’ account in the name of the member, similar to a partnership. A cooperative may, by its articles, exclude or limit any liability of its members or former members to a maximum contribution to a deficit. Most cooperatives within fund structures select a system of excluded liability.


The CV (limited partnership) is a contractual arrangement between one or more general partners and one or more limited partners; therefore, a CV does not have legal personality. Such an agreement is governed by general statutory provisions on contractual relationships between parties, as well as by a number of specific statutory provisions under Dutch law. Despite the latter, the CV is a flexible legal form.

The CV is managed by one or more general partners. Both individuals, and legal entities such as corporations, may serve as a general partner of a CV. Each general partner is responsible for the day-to-day affairs of the CV as well as its general management. If there are two or more general partners, each general partner has the power and authority individually to represent and bind the CV unless the partnership agreement provides otherwise. Even though there is a division of tasks and duties among the general partners, each general partner is jointly and severally liable for all of the partnership’s obligations. A limited partner may not engage in the day-to-day business of the CV, and his or her name must not appear in the CV’s name. A limited partner is only liable up to the amount of his or her contribution to the partnership, and his or her commitment, if any, to contribute additional amounts to the CV.

Since the CV does not have legal personality, a CV as such cannot own its assets, but the assets are regarded as legally owned by the general partners and the partnership’s liabilities are considered liabilities of the general partners provided no separate depositary was appointed for that purpose.

For Dutch tax purposes, the CV can be structured either as an opaque entity or as a transparent entity. The CV is, in principle, opaque, unless permission of all partners is needed for the accession or replacement of a partner.


The FGR (fund for joint account) is a flexible legal form for an investment fund as no mandatory statutory rules apply (and is therefore even more flexible than the CV). While Dutch civil law does not address the FGR as such, an FGR is a type of fund that has been instituted by tax laws. An FGR is a contractual arrangement between the manager and the entity holding the legal ownership of the assets attributable to the FGR. An FGR does not have legal personality. The qualification of an FGR for civil law purposes will differ, depending on the provisions of the contract. The contract instituting an FGR is usually referred to as the ‘terms and conditions concerning the FGR’. The conditions can provide that investors (i.e., the participants in the FGR) are not liable for obligations entered into in the name of the fund.

Similar to the CV, for Dutch tax purposes, the FGR can be structured either as an opaque entity or as a transparent entity. For the FGR to be considered transparent, either the permission of all participants should be needed for the accession or replacement of a participant; or the participations should be non-transferrable except to the FGR (acting through its legal owner) itself.


Between 2011 and 2015, the total capital invested in investment funds grew by approximately 2.34 per cent. The table below shows the total capital investments by sector in investment funds in the Netherlands between 2011 and 2015:4

Capital investments in investment funds in the Netherlands (in € million)













Monetary financial institutions












Pension funds






Investment funds






Other financial institutions






Non-financial corporations
























The total invested capital in investment funds in the Netherlands amounted to approximately €733 billion at the end of 2015. The bulk of the investments came from pension funds, which at the end of 2015 were responsible for over 80 per cent.

Pension funds were also primarily responsible for the increase in total investments in the Netherlands during 2011 to 2015. Investments of other investors remained relatively stable, except for a strong decrease during the same period in investments by the government.


The implications of the financial crisis that started in 2007 were severe for the investment fund industry. Investors took large losses, many of which were largely neutralised in 2009 and 2010. However, the view on markets and risks has changed fundamentally, which has resulted in extensive discussions on financial markets regulation.5 For investment funds, the most important discussions were about the adoption and implementation of the AIFMD.

As mentioned, several licensed AIFMs and UCITS management companies provide investment services. As a result thereof, the implementation of MiFID II is a relevant topic for these managers, as they will have to comply with various MiFID II requirements.


i Insurance

Certain restrictions are applicable with regard to assets in which insurers invest. An insurer is required to hold a certain amount of technical provisions that must be covered by a portfolio of assets. The level of technical provisions must be sufficient to cover all payments that an insurer is required to make under the insurance contracts with its clients. The composition of the portfolio of assets must comply with certain general requirements, such as:

  • a matching: nature of assets and liabilities must match;
  • b portfolio diversification;
  • c prudence: high-risk investments must be limited to a certain level;
  • d correspondence: currency of investments must sufficiently correspond to the currency of payments to clients; and
  • e localisation: if the policy holder has its residence in a Member State (life insurance), or the insured risk is located in a Member State (non-life insurance), investments must be located in the EEA.

Currently, the Netherlands is working on the implementation of the Solvency II Directive as amended by the Omnibus II Directive, which provides for a complete review of the regulatory framework for insurers. The new regime came into effect as per 1 January 2016. The main focus lies with the capital adequacy regime for the European insurance industry that will replace the current solvency requirements for insurers, and whereby the calculation of the capital to be held by insurers will be completely risk-based.

The total portfolio of assets of an insurer will be subject to a general diversification requirement and the prudent person rule. The prudent person rule, inter alia, means that with respect to the whole portfolio of assets, insurers may only invest in assets and instruments the risks of which the insurer can properly identify, measure, monitor, manage, control and report, and appropriately take into account in the assessment its overall solvency needs. With respect to assets held by insurers specifically to cover the technical provisions, a matching requirement and a requirement that the insurer must invest in the interest of its clients and beneficiaries while taking into account any disclosed policy objective apply.

There are no specific requirements with respect to assets that may be held by insurers. However, investment allocation may be restrained by the new (Solvency II) rules on the calculation of capital to be held by insurers. For instance, the general feeling in the market is that investments in hedge funds may be impacted, since such investments may lead to a larger amount of capital being held by the insurer to cover such investments, as these investments are considered to be risky. However, the impact of any specific investment on the capital requirements must not be generalised as diversification effects and the return realised by the investment must also be taken into account.

Solvency II also imposes stricter reporting requirements on insurers, which may affect the reporting requirements of asset managers to insurers. The reporting requirements of insurers will be more detailed, and the time constraint will become tighter. This means that asset managers may also be forced to provide more detailed information to the insurer with less time to collect the information.

ii Pensions

Similar to insurers, there are also no specific rules for pension funds from an asset management perspective. With respect to pension funds setting up investment funds, the regulatory regime, as described above, applies with respect to pooling assets.

Pension funds also primarily act as investors. Therefore, certain restrictions under the Pension Fund Act apply from an investor’s point of view. The most important restriction is that a pension fund must invest like a prudent person. To act as a prudent person, the pension fund has to comply with certain principles under the Pension Fund Act and its underlying decrees, and policy rules of the DNB. These principles include that investments must be made in the interest of the beneficiaries and the pension-entitled persons. The principles also provide guidance to pension funds and to asset managers of such pension funds with regard to valuation of assets, alternative investments, diversification, integrity, provision of information and outsourcing.

iii Real property

No specific rules exist under the regulatory regime for real property funds. However, some investors are restricted in the type of investments they can make. For example, insurers and pension funds have to invest like a prudent person and may therefore be forced to limit their investments in real property funds.

Real estate funds must comply with the regulatory regime as described above. In July 2012, however, the Netherlands Authority for the Financial Markets (AFM) stated on its website that the provision of information by and operational management of (non-listed) real estate funds showed serious shortcomings. It is expected that real estate funds will remain under the AFM’s scrutiny.

iv Hedge funds

There are no specific regulatory rules for hedge funds under the current regulatory regime. The AIFMD does not specifically address hedge funds. However, some rules are especially relevant to hedge funds and their managers (e.g., the leverage requirements).

AIFMs systematically applying leverage must – in addition to other new requirements – provide additional information to investors and the relevant competent authorities, including the maximum leverage that they may use for an AIF as well as the total leverage used. Under certain circumstances, the competent authority may impose limitations on leverage.

v Private equity

Private equity funds, including buyout funds and VC funds, previously did not fall within the scope of the former Dutch regulatory framework because they made use of an exemption, or their activities did not qualify as investment activities but rather as entrepreneurial activities. Similarly, there are no specific regulatory rules for private equity funds under the current regulatory regime.

The AIFMD does not specifically address private equity funds, but some rules are especially relevant to private equity funds and their managers (e.g., certain obligations regarding the acquisition of non-listed companies and asset stripping).

AIFMs managing investment funds that acquire control of non-listed companies and issuers are subject to disclosure obligations and notification obligations. The notification must take place when the proportion of voting rights reaches, exceeds or falls below certain thresholds. These obligations do not apply to small and medium-sized enterprises and special purpose vehicles with the purpose of purchasing, holding or administrating real estate.

The AIFMD also provides for specific safeguards against asset stripping (i.e., attempting to take control of a company solely to make a quick profit by selling its valuable assets). In general, the AIFMD limits an AIFM’s ability to make distributions, reduce capital, redeem shares and acquire own shares by a company within the first two years after acquiring control of such company.


With respect to the corporate income tax treatment and dividend withholding tax treatment of a Dutch fund vehicle, three different tax regimes are available: the regular regime, the fiscal investment institutions regime (FBI regime) and the exempt investment institution regime (VBI regime).

i Regular regime

Under the regular Dutch corporate income tax regime, the profits (income and capital gains) of an opaque Dutch fund vehicle are subject to tax rates of up to 25 per cent.

However, benefits (both income and capital gains) derived from qualifying subsidiaries are fully exempt from Dutch corporate income tax under the participation exemption. Typically, a shareholding of 5 per cent or more of the aggregate nominal paid-in capital of a domestic or foreign company with a capital divided into shares will qualify for the participation exemption. In addition, if the Dutch fund holds options that upon exercise would constitute a qualifying participation, the result on these options, including the premium, is exempt from Dutch corporate income tax under the participation exemption. The participation exemption does not apply, however, in the case of:

  • a a passive portfolio investment – an equity participation is a passive portfolio investment if the fund holds it with a view to obtaining a return that does not exceed what can be expected from regular asset management;
  • b a small holding company – an equity participation is a small holding company if it is primarily (more than 50 per cent) engaged in holding small (less than 5 per cent) equity investments; or
  • c a group finance company – an equity participation is a group finance company if it is primarily (more than 50 per cent) engaged in group financing, leasing and licensing activities.

Even if one or more of these exceptions apply, the fund can nevertheless benefit from the participation exemption if the subsidiary passes either of the following safe harbour tests:

  • a the subject-to-tax test: a subsidiary passes the subject-to-tax test if either its regular tax rate is 10 per cent or higher, and the applicable foreign tax regime does not contain substantial tax base deviations; or its profits recalculated on the basis of Dutch standards are effectively taxed at a rate of 10 per cent or more; or
  • b the asset test: a subsidiary passes the asset test if 50 per cent or more of its assets are ‘good’ assets. Good assets include business assets, real estate, assets the return on which is subject to a realistic tax (see (a), above) and group financing, and leasing or licensing assets held by a company that meets certain stringent substance requirements (on the basis of which it is determined whether such company is considered sufficiently active).

Specific anti-abuse and anti-base erosion rules may restrict or limit the deduction of interest from taxable profits for Dutch corporate income tax purposes.

Distributions of dividends by an NV or BV, as well as by an opaque CV or FGR, are typically subject to 15 per cent dividend withholding tax. Provided that certain conditions are met, this 15 per cent rate may be reduced or refunded for certain shareholders, participants or limited partners that are Dutch or EU residents and that are entitled to the participation exemption with regard to their shareholding in the Dutch fund (or would have been if they were resident in the Netherlands for tax purposes) or are tax-exempt (and, in the case of EU residents, would also be tax-exempt if they were resident in the Netherlands for tax purposes); or qualify for a reduced rate or exemption under a double taxation treaty. According to Dutch tax law and tax treaties, no reduction or refund of the dividend withholding tax is granted if the recipient is not the beneficial owner of the dividends.

In the past years, the cooperative has gained popularity in cross-border structuring because of its flexibility from a corporate law perspective, and because its distributions were not subject to dividend withholding tax. The cooperative was not often used as the fund vehicle itself but rather as the central holding vehicle below the fund vehicle. Since 1 January 2012, dividend withholding tax on cooperatives has been introduced in abusive structures. These anti-abuse rules have been extended as of 1 January 2016 pursuant to the revised Dutch general anti-abuse rules, which were introduced in the context of the ongoing international (OECD) and EU base erosion and profit shifting (BEPS) and tax avoidance debate and the revisions made in this respect in the EU Parent-Subsidiary Directive. In situations in which the cooperative holds equity interests in one or more Dutch or foreign companies with the main purpose, or one of the main purposes, of avoiding Dutch dividend withholding tax or a foreign tax and there is an artificial arrangement or series of arrangements, withholding tax is due on distributions made by the cooperative. According to the EU Parent-Subsidiary Directive revisions, on which the revised Dutch general anti-abuse rules are based, an arrangement is artificial if it is ‘not genuine with regard to all relevant facts and circumstances’. Arrangements are artificial to the extent that they are not put into place for valid commercial reasons that reflect economic reality.

ii FBI regime

Under the FBI regime, an NV, BV or opaque FGR is subject to a zero per cent Dutch corporate income tax rate, provided all conditions are met. The fund vehicle is, however, obliged to distribute its current income (not its capital gains) in full annually, within eight months after the end of its financial year. The participation exemption does not apply under the FBI regime; income and capital gains derived by the FBI from a subsidiary are fully part of its taxable income.

Since a fund vehicle that falls under the FBI regime is technically subject to tax, this vehicle is generally also considered a resident of the Netherlands for the purposes of double taxation treaties concluded by the Netherlands, potentially resulting in reduced withholding tax rates as well as other treaty benefits (e.g., exemption from capital gains tax in the source country, especially in the case of gains derived from the sale of securities). In certain cases, specific arrangements have been agreed upon between the Netherlands and the other treaty state in respect of FBIs and their access to the benefits under the applicable double taxation treaty (e.g., with Switzerland). Distributions by an FBI are subject to dividend withholding tax similarly to distributions made by a vehicle that is subject to the regular Dutch corporate income tax regime. A remittance reduction may be available as a result of which the FBI does not have to remit all dividend withholding tax withheld by it to the Dutch tax authorities.

Application of the FBI regime can occur only in cases where the entity in form and in substance is exclusively engaged in making and managing portfolio investments. In addition, various conditions apply with respect to the nature of the shareholders or participants in the fund vehicle, as well as the maximum ownership percentages held by shareholders or participants, together with related entities. Furthermore, assets other than real property may be leveraged only up to 20 per cent of the book value of these assets. For real property, a maximum of 60 per cent applies.

iii VBI regime

Under the VBI regime, an NV or opaque FGR may elect to be fully exempt from corporate income tax; unlike the FBI regime, there is no annual obligation to distribute current income.

Unlike an entity that enjoys FBI status, a VBI is not generally considered to be a resident of the Netherlands for the purposes of the double taxation treaties concluded by the Netherlands. Therefore, payments received by a VBI will not benefit from tax treaty-based reduced source country withholding tax rates. Distributions made by a VBI are not subject to Dutch dividend withholding tax. Anti-abuse rules apply to prevent entities applying for the VBI regime to avoid Dutch dividend withholding tax.

In addition, with a VBI, an election to adopt the VBI regime can be made only in cases where the entity is exclusively engaged in making and managing portfolio investments. Furthermore, unlike the FBI, the scope of the investments is limited to certain portfolio classes, including securities and derivatives. Direct investment in real property is not permitted. The VBI is not subject to any restrictions regarding the amount of leverage.


The largest impact on the asset management industry will be the implementation of MIFID II and UCITS V, and the directives, regulations and policy rules related to them. Apart from this implementation, there are many initiatives in the Netherlands, the EU and other jurisdictions and on an OECD level that will also affect the asset management industry in the Netherlands, including the adoption and implementation of, and discussions on, remuneration policies, financial transactions tax, BEPS, EMIR, Solvency II, the Common Reporting Standard and the EU regulation on European long-term investment funds.


1 Lotte Boon and Joost Steenhuis are senior associates at De Brauw Blackstone Westbroek NV.

2 UCITS have gained popularity in the Netherlands pursuant to the implementation of the AIFM Directive and are expected to become even more common upon the implementation of MiFID II (as non-structured UCITS are considered non-complex under such directive).

3 Consequently, the sole option for sub-threshold EEA AIFMs to market in the Netherlands is to opt in for a fully fledged AIFM licence in their home Member State or to apply for a stand-alone AIFM licence in the Netherlands.

4 Source: the Dutch Central Bank (DNB): www.statistics.dnb.nl.

5 Source: Dufas Jaarverslag 2011, p. 3: www.dufas.nl.