What is an exempt investment vehicle?
The exempt investment institution (VBI) is a status that the tax authorities can grant to investment institutions that exempts them from paying corporate income tax on profits earned and from withholding dividend tax on dividends paid.Â
VBI
The exempt investment institution (VBI) is a status that the tax authorities can grant to investment institutions that exempts these institutions from paying corporate income tax on profits made and from withholding dividend tax on dividends paid. This allows tax-free investments in a VBI. However, income tax must be paid on dividends and capital gains 25%. The VBI can take the form of a limited liability company or an open mutual fund with the sole purpose of collective asset management.
Terms of the VBI
The conditions for a VBI are that there must be at least 2 shareholders, one of whom may not hold more than 90 percent of the shares. The VBI may have no direct investments in real estate in the Netherlands, no private receivables, no real estate, pensions or tribal rights on its balance sheet, or invest in designated banking products.
When is a VBI interesting?
A VBI can be interesting for a holding company with a lot of excess liquid assets or investments, the director-major shareholder who has sold his company (operating company) and keeps only liquid assets or investments in his personal holding company or for people who hold an investment company abroad, but prefer to bring it to the Netherlands.
Set up exempt investment vehicle?
We assist our clients along with the accountant/tax advisor, bank and asset managers in establishing the VBI. Often a restructuring must take place to obtain the exempt status. For example, the investments and liquid assets can be transferred to a separate limited liability company (nv) through a legal split-off, or the existing private limited company (bv) must be converted to a nv with collective investment as the sole statutory purpose . We can also set up the open general account fund for our clients.
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