The Establishment and Use of The Netherlands Antilles
“Stichting Particulier Fonds” ( Private Foundation )

Introduction

In 1998 the Netherlands Antilles introduced a new type of legal entity, the Private Foundation (“Stichting Particulier Fonds”).
The “Stichting” ( Foundation ) The “Stichting” or foundation is a legal entity incorporated by notarial deed. A Stichting is registered in the Curacao Chamber of Commerce’s Foundation Register. A Stichting has traditionally been utilized almost exclusively for holding finds for charitable contributions to third parties.


The Stichting Particulier Fonds ( Private Foundation )

The difference between a traditional “Stichting” (Foundation) and the “Stichting Particulier Fonds” (Private Foundation) is that the Stichting Particulier Fonds is allowed to make distributions to beneficiaries, without the requirement that such distributions have to be of a charitable nature. A private foundation has no shareholders, members or the like. It keeps its assets and liabilities in its own name.The transfer of assets from non-residents into a Stichting Particulier Fonds are exempt from Netherlands Antilles gift taxes. A Stichting Particulier Fonds does not pay any profit taxes over its income. There is no succession duty. A private foundation is not allowed to conduct business or enterprise with profit motive. Asset management (except for third parties) or acting as a holding or investment company is not considered as a business activity.
There is no minimum capital requirement and the capital does not have to be mentioned in the Articles of the Foundation. The private foundation may employ its funds to make all possible kinds of investments

These characteristics make the Stichting Particulier Fonds more than a regular civil law foundation, attractive for the useful control over family assets. In addition, a Stichting Particulier Fonds can be seen as a civil law alternative for the Anglo-Saxon Trust. It should be taken into account that in some cases the contributor shall have to pay gift tax in his/hers country of residence.


Founders/Directors

A Curacao Private Foundation must have at least one resident Director which is in the possession of a valid license from the Netherlands Antillean Supervisory Board of Fiduciary Business. In most of the cases an Antillean Trust Company will act as a founder and as resident managing director. The trust company also provides the local registered address and office.


Uses of the Stichting Particulier Fonds

The essence of a Stichting Particulier Fonds is the separation of control from ownership. The person who transfers his/hers assets tot the Stichting ( and who becomes the beneficiary of the Stichting’s assets ), no longer thereafter owns the assets which he/she has put into the Stichting. The name of the beneficiary does not appear in the Stichting’s Articles. His/hers nomination is rules in a separated amendment based on art. 11 of the Articles of Incorporation. The resident managing director guards the foundation’s assets and is personally liable for his actions. He has to obey to the instructions given by the beneficiary.

In many cases the Stichting Particulier Fonds may be an attractive vehicle for private investment purposes.

Examples:
Control vehicle for assets during lifetime
Investment vehicle
Limited liability
Minimal taxation on income and estate
Minimalise taxes on deposito’s in counties where’s no source tax
Possession of shares
Possession of real estate
Possession of copyright, patents etc. and licence the rights and powers to third parties
Protection of family assets against for instance economical risks
Possibility of changing the beneficiary of the Stichting ( heir questions)
Absence of the duty to publish the financial status of the Stichting
Confidentiality in respect of the identity of the beneficiary for instance in competition questions

The beneficiary’s assets will be transferred to the Stichting Particulier Fonds by means of a trust-management agreement between the Stichting Particulier Fonds and the beneficiary or by appointing a beneficiary’s fiduciary as a Member of the Board of the Stichting Particulier Fonds, control over the assets will remain with the beneficiary.
At the beneficiary’s decease the Stichting Particulier Fonds will distribute the assets in accordance with the beneficiary’s wishes, but distribution may also be postponed till a future date. If requires properly structured full confidentiality of the beneficiary’s identity under Netherlands Antilles law is ensured.

If you have any other questions concerning the above, please do not hesitate to contact us.