The Dutch 'Stichting'

28 april 2020

The Dutch 'stichting', also referred to as 'foundation', is an already widely used type of legal entity, allowing major corporates, investors and others around the globe to separate economic interest and control (whether permanently or temporarily) in ways they do not manage to do effectively through structures available in other jurisdictions. We believe that the stichting could be used even more extensively in international deal making and governance situations in years to come.

A stichting is an orphan entity that only needs to have a board of directors, which has full control of the entity. It does not have, and is therefore not controlled by, any member or shareholder. Different from foundations in many other jurisdictions, the incorporation of a stichting does not require governmental approval, nor does it have to operate for charitable purposes (in fact, most don't). This makes the stichting an effective and useful tool in corporate structuring. In this white paper, we provide a brief description of the main characteristics of the stichting under Dutch law, followed by the most typical business structures in which stichtings are used: (i) as a structural measure to split legal and beneficial ownership of shares, and to concentrate voting control on such shares at the board of the stichting, and (ii) in international transactions for strategic or defensive purposes.

Click here to read the white paper.