Doing Business in the Netherlands 2012 - American Chamber of ...

Doing Business in the Netherlands 2012
� The VBI is set up as an open-end investment fund, meaning,
the fund should allow the repurchase of shares at regular
moments.
� The VBI regime is stricter in terms of the allowable activities.
For instance, it may invest in the so-called “financial
instruments” only as defined in the MiFID, e.g., shares,
bonds, options, futures, swaps. It is also allowed to invest in
Dutch and foreign real estate indirectly, i.e., via a (nontransparent)
Dutch or foreign entity or a real estate investment
fund. In addition, it may invest in foreign real estate through
a transparent or non-transparent entity or partnership; the
limitation then is focused only on Dutch real estate.
Please note that due to the lack of tax treaty protection, withholding
tax levied by the investor country will be actual costs for the
investment fund. Interest-bearing investments (instead of dividendgenerating
investments) are therefore most interesting, since less
countries levy interest withholding tax.
� The VBI has no specific shareholder requirements; both
individuals, corporations, as well as institutional investors
may invest via a VBI. However, a decree was published on
10 March 2008 in which the Ministry of Finance tightened the
possibilities for substantial shareholders to “misuse” the
investment regime. It becomes clear from the decree that the
Dutch tax authorities would not easily approve the request to
qualify as a VBI if the VBI was mainly set up as an exempt
fund for (effectively) only one shareholder.
� The VBI should be diversifying risks, meaning, it could not
invest in one asset only (apart from feeder funds).
The VBI regime does not have any distribution obligations. However,
Dutch (corporate and individual) investors do have to revaluate their
interest to fair market value every year, as a result of which the
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