For a Latin American family with significant wealth, the reason to build a European structure is often not tax at all. It is protection and succession: the wish to hold part of the family estate in a stable jurisdiction, to plan its transfer to the next generation in advance rather than under pressure, and to separate family wealth from the operating business and from country-specific risk. Europe, and the Netherlands in particular, offers a framework for all three that many home jurisdictions do not.
One instrument decides which law governs the estate, that law decides what the heirs can demand, and Dutch tax law decides separately what the transfer costs. Three questions, not one.
Separating the three kinds of risk
Family wealth in the region often sits undifferentiated, with the operating business, the real estate, the financial assets and the family’s personal exposure all tangled together. When something goes wrong, a business difficulty, a divorce, a political shift, a generational transfer, the whole estate is exposed at once. A European patrimonial structure separates these into distinct layers: a holding above the business, separate vehicles for investment assets, and governance rules that keep the family’s wealth insulated from the operating risk. We deal with the general architecture in our note on how family offices use Dutch BVs and stichtingen.
The mechanism is ordinary corporate law. A creditor of the trading company reaches that company and the shares held in it, and stops there, because the sister company holding the securities owes it nothing. The separation is only as good as its paperwork: each layer needs its own account, books and minutes.
Succession sharpens the point. When the estate is one undivided pool, every heir inherits a slice of everything, and whoever should run the company and whoever should be paid out are different people. Layering settles that in advance, as in our note on one family with assets in three countries.
Which law governs the estate
Regulation (EU) No 650/2012 on matters of succession governs, by its Article 83, the estates of persons dying on or after 17 August 2015. Article 21(1) applies the law of the State of the deceased’s habitual residence at death to the succession as a whole, and Article 21(2) displaces it where he was manifestly more closely connected with another State.
Two features matter outside Europe. Article 20 makes the Regulation universal: the designated law applies whether or not it is that of a Member State, so a Latin American law can govern a Dutch-held estate. Article 22 lets a person choose the law of his nationality, expressly, in a disposition upon death.
The reach of the winning law is wide. Article 23(2) gives it the disposable part of the estate, the reserved shares, other restrictions on disposal upon death and the claims persons close to the deceased may bring. Forced heirship travels with that law, not with the assets, so moving a portfolio to Amsterdam changes nothing by itself.
Succession decided in advance
Succession is where these structures earn their place. Many Latin American jurisdictions impose forced heirship, dividing an estate among heirs by formula regardless of the family’s wishes, and a family with a European structure can, within the applicable rules, achieve a governance outcome that reflects its intentions rather than a formula. A Dutch stichting above the family holding allows control and economic benefit to be separated, and succession to be arranged as a considered plan rather than as an event that happens to the family. The alternative, discovering the succession rules at the moment of death, is the outcome these structures exist to avoid.
Where Dutch law governs, the constraint is a claim for money, not a claim on assets. Article 4:63 of Book 4 of the Dutch Civil Code gives descendants a legitieme portie surviving gifts and wills, Article 4:64 sets a child’s share at half the value base divided by the number of statutory heirs, and Article 4:80 makes it a claim against the joint heirs.
Timing is the design. Article 4:81 sets a floor, not a due date: the claim is not exigible before six months have passed. Under the statutory division of Article 4:13, the default when a spouse and children survive, it becomes exigible only on the spouse’s death or bankruptcy, and Article 4:82 lets a will attach that deferral to what the spouse receives. That clause, not a cash reserve, answers the liquidity problem raised in our note on siblings who inherit the same structure.
A structure built for succession is built for a day the family hopes is far away. That is precisely why it has to be built before anyone thinks they need it.
The applicable law and the tax are separate questions
The expensive misreading is to treat the succession Regulation as a tax instrument. Article 1(1) excludes revenue, customs and administrative matters, and recital 10 draws the consequence: national law determines how succession taxes are calculated and paid, and may make the release of estate property conditional on payment.
The Dutch answer turns on the deceased. Article 1 of the Successiewet 1956 levies erfbelasting on everything acquired by inheritance from a person who lived in the Netherlands at death, and Article 3(1) deems a Dutch national who lived there and dies within ten years of leaving to have been resident then. The test is the nationality of the deceased, so it catches the founder who naturalised.
Article 24 charges a partner or a descendant in the direct line 10 per cent on the first 158,669 euros and 20 per cent above it, and other recipients 30 and 40 per cent. Article 32 exempts 828,035 euros for a partner, reduced by half the pension and annuity entitlements the partner acquires but never below 213,915 euros, and 26,230 euros for a child. Article 45 sets a filing deadline no earlier than twenty months after death.
Protection that is legitimate, not evasive
Asset protection in Europe is a legitimate objective pursued through legitimate means: holding assets in stable jurisdictions, under clear governance, separated from operating risk. It is not, and cannot be, a device for hiding assets from creditors, tax authorities or family members with legal claims, and a structure marketed on that basis is a structure that will fail. The protection a European framework offers is the protection of clarity and separation, which survives scrutiny, rather than the false protection of concealment, which does not.
That is not only a matter of principle. Article 57 of Regulation (EU) 2024/1624 on preventing money laundering, which applies from 10 July 2027, makes a foundation’s founders, its management and supervisory board members, its beneficiaries unless the class rule of Article 59 applies, and anyone else controlling it, its beneficial owners. A stichting records the family; it does not hide it.
The same regulation says what to expect from a bank. Article 34(4) lets an obliged entity facing higher risk ask for more on the customer and the beneficial owners, and for their source of funds and wealth. A family that can document how the wealth was built passes as routine.
What the bank asks when the holder dies
The real test happens at the institution holding the assets, which releases nothing until satisfied the person asking is entitled. Article 62 creates the European Certificate of Succession for use in another Member State, and using it is optional.
Article 69 is what makes it worth having. The Certificate takes effect in every Member State bound by the Regulation, without special procedure, and the person it names as heir, legatee or executor is presumed to hold the powers it states. Whoever pays or passes property to that person has transacted with someone who had authority, unless he knew otherwise or was grossly negligent. Ireland and Denmark are not bound, under recitals 82 and 83, so the Certificate does not run there.
None of this is confidential from the tax administrations, but the instrument depends on where the family lives. Under Council Directive 2014/107/EU on mandatory automatic exchange of information, Member State authorities exchange, for periods from 1 January 2016, a reportable account holder’s name, address, tax identification number and birth details with the account balance, and the same for the controlling person of a passive non-financial entity. A Reportable Person, though, is a resident of another Member State, so the Directive does not reach a founder living in Latin America.
What reaches him is the Common Reporting Standard. Its multilateral competent authority agreement has each authority exchange annually with those with which it has the agreement in effect, so whether the home administration sees the account depends on that agreement.
The stability premium
For families from countries with a history of currency instability, political change or legal unpredictability, the central value of a European structure is the stability itself. Holding part of the estate in a jurisdiction where the currency is stable, the courts are predictable and the rules do not change overnight has a value that does not appear on any tax calculation but is often the real reason the family is in the room. That stability is only real if the structure has genuine substance, as set out in our note on Dutch substance requirements; a paper structure in a stable country offers the appearance of stability without its substance.
Substance also has to survive the succession. A holding whose only activity is an annual signature is easy to challenge when its shares change hands, and a foundation whose board has never met leaves the family arguing about who decides.
Coordinated across jurisdictions
A Latin American family’s wealth typically touches more than one country, and the succession and protection analysis has to be coordinated across all of them rather than resolved in Europe alone. The home-country rules on worldwide taxation, forced heirship and outbound investment interact with the European structure, and the plan is only as strong as its weakest jurisdiction. The families who get this right treat it as a single coordinated exercise, with advisers in each relevant country working to one design, rather than as a European structure bolted onto an unexamined home-country position.
Universality forces that coordination. Because Article 20 applies the designated law whether or not it is a Member State’s, a founder who keeps his habitual residence at home keeps his own succession law for the whole estate, as our note on cross-border succession in Europe explains.
Sequence matters as much as design. Habitual residence and a choice of law rest on documents built over years, the ten-year rule runs from a departure that may already have happened, and reserved portions count old gifts.
Montclare runs a dedicated Latin American desk, structuring the corporate, tax and holding architecture for groups and families entering Europe through the Netherlands. Our services are set out on our services page.
This article is informational and does not constitute tax or legal advice. The treatment of any structure depends on its facts and on the law of each jurisdiction involved. Each engagement is subject to scope and applicable regulation.