The question that reaches an Amsterdam desk from a family in Vaduz, or travels in the opposite direction, is rarely about rates any more. It is about durability: whether a structure assembled over two generations will still function when a bank asks for the ownership chain, when a tax authority asks who took the decisions and where, and when the founder’s children hold different passports and different ambitions. Much of the history of the Liechtenstein and Dutch pairing was written in a period when discretion did most of the work. That period has closed. The pairing survives its closing, and in several respects functions better without it.
What the foundation tradition contributes
The civil law foundation is not a trust with a continental accent. It is a legal person without shareholders or members, endowed by a founder with assets that cease to belong to the founder, administered by a board according to statutes and by-laws, for the benefit of persons who may be identified or left to the board’s discretion within defined classes. There is no equity to inherit, no register of members to fragment, and no shareholder meeting at which a disaffected branch of the family can install its own directors.
What a mature foundation jurisdiction contributes is less the form itself, which exists in several places, than the depth of practice around it: a settled understanding of what a board owes to beneficiaries, and supervision that treats governance failures as failures rather than as private matters. Foundations confined to holding and administering assets for private beneficiaries are ordinarily distinguished from those carrying on commercial activity, and that distinction holds only for as long as the entity stays within it. The transparency frameworks now operating across Europe reach these vehicles as they reach any other. A family foundation whose board can document its deliberations, and whose beneficiaries are reportable in the ordinary course, is a more useful instrument today than one designed to be invisible.
What the Dutch platform contributes
The Netherlands contributes what the foundation cannot: an operating spine. A Dutch holding company is a corporate taxpayer with a treaty network and a body of doctrine built around groups that actually trade. Corporate income tax stands at 25.8 per cent in the upper bracket, with a reduced rate on the first tranche of profit, so the platform is not a low-tax instrument and has not presented itself as one for some time.
The participation exemption remains the load-bearing element. It exempts dividends and capital gains on qualifying shareholdings, subject to a minimum holding percentage and to the requirement that the participation is not a low-taxed portfolio investment, a condition satisfied through the motive test, the reasonable subject-to-tax test or the asset test. It is mandatory and symmetrical: where a gain is exempt, the corresponding loss is not deductible. That symmetry is worth stating plainly to families accustomed to treating exemptions as options, and our note on the Dutch participation exemption sets it out at length.
Around it sits the rest of the architecture. Dividend withholding tax at a general rate of 15 per cent, reduced under treaties and capable of exemption within the European Union subject to anti-abuse conditions. A conditional withholding tax on interest and royalties paid to low-taxed or listed jurisdictions, in force since 2021, which has quietly ended a class of financing arrangement. Interest deduction limited under the ATAD earnings-stripping rule to a percentage of fiscal EBITDA with a minimum threshold. Article 8b, which imposes arm’s length pricing and a documentation duty with no turnover threshold at all, supplemented by Master and Local File obligations from 50 million euro of consolidated turnover, country-by-country reporting from 750 million, and the Pillar Two minimum of 15 per cent at the same 750 million mark.
Separating control from economics
The Dutch civil law toolkit contains two forms that matter to families. The stichting is a foundation: a legal person without members, governed by a board, with a purpose fixed in its deed, constituted before a Dutch civil law notary and registered with the KVK. The STAK, a stichting administratiekantoor, applies that form to a specific problem. It holds shares in a company and issues depositary receipts to the economic beneficiaries: voting rights sit with the STAK board, dividends and value flow to the holders of the receipts.
The effect is a separation of control from economics. Shares can be certificated before a succession, so that heirs receive economic entitlement without each acquiring a vote, and the board of the STAK can be composed to reflect a founder’s judgement about who should decide. The arrangement is visible, notarised and registered, which is why banks and counterparties accept it. The mechanics are set out in our note on the use of the stichting in Dutch structures.
Where the two traditions meet
The combination that works is unremarkable once described. A family foundation holds the top of the chain, giving continuity and a governance forum for beneficiaries who are minors, resident in different countries or simply unsuited to running an industrial business. Beneath it, a Dutch holding company owns the operating subsidiaries, employs the group’s senior people, carries the debt and receives the dividends. A STAK may sit between the holding and the family, so that economic interest does not translate into day-to-day interference.
What makes this legitimate is not the diagram. It is that each layer does something. The foundation must meet, deliberate, take decisions on distributions and record them. The Dutch holding must exercise the functions its returns claim: board decisions taken in the Netherlands by people competent to take them, remuneration matching the functions performed, and pricing that survives Article 8b scrutiny. A holding that owns risk it cannot manage is not a holding; it is a paper allocation waiting to be reallocated by an assessment.
Family mobility complicates this. A member relocating to Spain may fall within the impatriate regime, which applies special rules for a limited number of periods, taxes employment income at a fixed rate up to a threshold and above it at a higher one, and depends on conditions concerning prior residence in Spain and the cause of the move. Such questions feed back into where the group itself is taxed, and where its people in fact work.
Substance, registers and beneficial ownership
The change in the profession is not that rules tightened. It is that the facts became knowable. Beneficial ownership is registered with the KVK, with public access restricted following the Court of Justice ruling of November 2022 but preserved for competent authorities and those with a legitimate interest. Financial account information moves automatically between administrations. Dutch ruling policy since July 2019 requires genuine economic nexus and declines to issue where the decisive motive is tax saving or where entities in listed jurisdictions are involved.
Opacity was never a structure. It was a delay. What survives is the arrangement that can be explained in the same terms to a bank, a tax inspector and a court.
The practical consequence is that presence has to be real. An address, a service agreement and a nominal director sustain nothing; what sustains a structure is activity, decisions and people who are genuinely answerable for them, with the competence and the authority to take the decisions attributed to them. Our note on Dutch substance requirements treats this at length; it is the point on which most inherited structures fail when examined.
A worked example
Take a family with an industrial business, second generation, four heirs, manufacturing in two European countries and distribution in several more. Consolidated turnover sits below the country-by-country and Pillar Two thresholds, so the live constraints are Article 8b documentation, the earnings-stripping limitation and the treatment of intra-group flows. Two heirs work in the business; two do not. The founder wants the business held together, all four treated equally in economic terms, and no forced sale on a disagreement.
A workable shape is a family foundation at the apex, with statutes fixing the family’s principles, by-laws that can be adjusted as circumstances change, and a board combining a family member with independent professionals. Below it, a Dutch holding company owning the operating entities, with its own board resident and active in the Netherlands, a finance function staffed by people who perform it, and intra-group pricing documented from the outset rather than reconstructed under audit. Dividends reach the holding under the participation exemption where the conditions are met; distributions upward are tested against the withholding rules and their anti-abuse conditions.
The two operating heirs sit on the holding’s board and are remunerated for what they do, not for who they are; the others hold economic entitlement through the foundation’s distribution policy. Nothing here reduces the group’s tax burden below what its activity implies. What it does is make the ownership stable and the succession orderly.
Why the new discipline favours legitimate wealth
Families with real businesses were never the beneficiaries of opacity; they were its collateral cost. They carried the suspicion attaching to every structure with a foreign holding, and competed for capital against parties whose economics were not visible. Registers, exchange of information and substance testing remove that asymmetry. A group that can show where its people are, what they decide and how its prices are set now holds an advantage, because banks, buyers and regulators can verify it.
What has ended is the practice of selling a form and calling it a plan. Choosing between a BV, an NV, a cooperatie, a stichting or a partnership form such as the CV or the VOF is a real decision, but it is the last decision, not the first. The first is what the family actually does, where it does it, and who is answerable for it. Amsterdam and Vaduz remain a serious combination for that reason: one supplies continuity of ownership, the other a place where a business can credibly be run. Neither supplies concealment, and neither needs to.
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This article is informational and does not constitute tax advice. Each engagement is subject to scope and applicable regulation.