The Netherlands offers very advantageous conditions for the establishment of investment funds. When it comes to the type of entities, one can choose from several legal structures, which can be legal or contractual. Among the structures with a legal personality, one can choose between the limited liability company, the investment company, the partnership, and the cooperative, while the contractual form available is the fund for joint account.
Our agents for starting a Dutch company can assist foreign investors with the creation of a Dutch cooperative for investment purposes.
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What is a Dutch cooperative (coop)?
The cooperative can be defined as an association, and investors must only draft a deed, which will be notarized, in order to set it up. The Dutch coop will also have a legal personality. The cooperative is highly employed for investment purposes in the Netherlands because it is very easy to set up.
One of the most important advantages of the cooperative is that it does not require a minimum share capital; however, when used as an investment fund vehicle, the investors must respect the requirements of the Dutch financial supervisory authority related to solvency. Also, the capital can be expressed in any currency.
What are the registration requirements for a Dutch coop?
There are various requirements related to setting up a Dutch coop. Among these, we mention the following:
- it must be registered by at least 2 members; however, it cannot issue shares to these members;
- a notarial deed must be drafted by a public notary in the Netherlands upon the creation of a coop;
- it must appoint a board of directors that can be Dutch or foreign residents;
- at least one annual meeting of the members and board of directors must be organized upon its creation.
What types of members can a Dutch cooperative have?
The Dutch coop can have both natural persons and companies as members, as the law does not impose restrictions in this sense. Also, there are no conditions applicable to their nationalities. This means that you can set up a cooperative even if you are a foreign investor.
What is the content of the Articles of Association in the case of cooperative?
The Articles of Association of a Dutch coop must comprise information about:
- the members: their names, nationalities, their rights and obligations;
- the reason for creating the cooperative: investment, in this case;
- the liability of the members: there are 3 types of structures from this point of view;
- other special provisions, as decided by the settlors.
What are the types of cooperatives from a liability point of view?
You can choose between:
- the cooperative with exempt liability (Uitsluiting van aansprakelijkheid), which is also the most popular when setting it up for investment purposes;
- the coop with limited liability (Beperkte aansprakelijkheid);
- the cooperative with unlimited liability (Wettelijke aansprakelijkheid).
Is there any minimum capital requirement for opening a coop for investment in the Netherlands?
No, there are no specific share capital requirements to abide by when registering such an entity.
Must the cooperative be registered with the Dutch Trade Register?
Yes, when created for investment purposes, registration with the Companies Register is mandatory. However, the procedure is usually completed by the notary drafting the deed of incorporation. Alternatively, you can rely on professional help for this step, especially if you are a foreign investor.
How to register a Dutch coop for investment purposes?
When setting up a cooperative for investment purposes in the Netherlands, the participants will enter into member accounts and will have voting rights, which will be stipulated in the coop’s constitutive documents. These documents must also be filed with the financial supervisory authority for approval.
The greatest advantage of Dutch coops over investment companies is that they can limit the liability of the participants. Also, from a taxation point of view, the Dutch cooperative can benefit from withholding tax exemptions when distributing the profits to investors no matter their resident country. This is also what differentiates Dutch cooperatives from investment vehicles in other countries.
It is useful to note that most of the times the Dutch coop is employed for the creation of real estate investment funds.
Are there any other registration requirements?
Yes, if the cooperative has beneficial owners who own at least 25% of the participation in it, they must be registered in the Ultimate Beneficial Owner Register. It is kept by the Companies House, but even so, the enrolment is separate from the registration of the cooperative itself.
Please watch our video on how to set up a Dutch coop:
Why should I choose a cooperative for investment over other types of investment vehicles in the Netherlands?
Many investors choose the cooperative because it has several advantages, among which are:
- its flexibility, especially when it comes to welcoming new investors, which provides for fewer requirements compared to a BV, for example;
- the cost of registration, which is also lower compared to the BV;
- the degree of liability for the members, as seen above.
What is the law governing cooperatives in the Netherlands?
The cooperative is regulated by the Law on Associations. This makes it a good choice for foreign investors seeking to establish their own businesses in the Netherlands. The cooperative can be used by both natural persons and legal entities from foreign countries who want to incorporate companies.
For assistance in setting up a coop for investment, don’t hesitate to get in touchwith our company registration consultants in the Netherlands.