A Liechtenstein foundation over a Dutch company is a structure that survives on a misunderstanding. The misunderstanding is that the foundation, being a legal person with its own council and its own registered office, supplies the substance the Dutch rules ask for. It does not, and the reason is not that Liechtenstein is Liechtenstein. It is that the Dutch rules ask a question about decisions, and the Liechtenstein regime that makes the foundation attractive is built on the foundation not taking them.
That is the tension worth setting out clearly, because it is structural rather than presentational. It cannot be fixed by better minutes, and it is not solved by moving the foundation council’s meetings to Vaduz, which is where they already are.
What substance means in the Dutch file
The substance conditions are set out in article 1bis of the Uitvoeringsbeschikking dividendbelasting 1965, which governs when a recipient of a Dutch dividend is presumed not to hold its interest with an avoidance purpose. The presumption operates for the anti-abuse rule in article 4, paragraph 3, part c, of the Wet op de dividendbelasting 1965, and it is rebuttable: the regulation grants it unless the inspector makes the contrary plausible. The conditions are cumulative and they are about decisions. At least half of the statutory and decision-making board members must live or be established in the state of residence. Those members must have the professional knowledge to perform their tasks properly, and the regulation defines those tasks as including deciding, on the recipient’s own responsibility and within the framework of normal group involvement, on the transactions the recipient enters into, and ensuring their proper settlement.
The remaining conditions follow from that one. The recipient must have qualified staff for the adequate execution and recording of those transactions. Its board decisions must be taken in that state, its main bank accounts held there and its bookkeeping done there. It must bear wage costs of at least 100,000 euro multiplied by the country factor in the annex, and that annex, which sets the factor for other member states of the European Union, other states party to the Agreement on the European Economic Area and Switzerland, puts Liechtenstein at 100 per cent. And it must have had immovable property at its disposal there for at least 24 months, containing an office with the usual facilities in which the work is actually carried out.
The same architecture appears elsewhere in Dutch law. Article 17, paragraph 5, of the Wet op de vennootschapsbelasting 1969 provides that where conditions set by ministerial regulation are met, a non-resident body holding a substantial interest in a Dutch company is presumed, again unless the inspector makes the contrary plausible, not to hold it with an avoidance purpose. Where the conditions are not met the same paragraph turns the burden around, and the taxpayer must itself make plausible either that the interest is not held with an avoidance purpose or that there are valid commercial reasons reflecting economic reality. The presumption is available in more than one place, and the price of it is always the same: the holder has to be the one deciding.
The foundation is not a stichting, and the decree says why
Since 1 January 2025 the comparison between foreign and Dutch legal forms is governed by the Besluit vergelijking buitenlandse rechtsvormen. Article 7 lists the essential characteristics of a Dutch stichting: it must not be possible to participate in its assets, it has legal personality, it has no members, it can make distributions only for an ideal or social purpose, it has a governing body, and it has statutes.
The fourth of those is where a family foundation parts company with the Dutch model. A Liechtenstein foundation established to benefit named family members and their descendants is not distributing for an ideal or social purpose, whatever else it may also do. Article 2 of the decree then provides that a foreign legal form which is comparable to more than one Dutch form, or to none of them, is a non-comparable legal form.
Liechtenstein appears in the annexed list of legal forms once, for the Aktiengesellschaft, with qualification year 2025 and a Dutch counterpart given as the naamloze vennootschap or besloten vennootschap. The Stiftung is not listed. Since article 2, paragraph 3, attaches its presumption only to forms that the list actually names, a foundation has neither a published presumption to rely on nor one to displace. The comparison has to be made from the deed, and the deed is what will be read. That is not a disadvantage in itself. It means the answer depends on the drafting rather than on the label, which is a better position than most people assume and a worse one than most deeds are written for. It is worth noting that the same list does carry an entry for the Austrian Privatstiftung and marks it as not comparable to any Dutch legal form. That entry decides nothing about a Liechtenstein deed, but it shows the drafters were willing to place a private foundation outside the Dutch forms altogether.
The attribution rule that runs underneath all of it
Before any of the withholding questions arise there is a prior one, and it is the one that most often decides the file. Article 2.14a of the Wet inkomstenbelasting 2001 provides that the assets and debts, and the income and expenditure, of an afgezonderd particulier vermogen are deemed to belong to and to accrue to the person who separated that property, whether during life or on death. After that person dies they are attributed to the heirs, each in the same proportion as he takes under the deceased’s succession, and the chain continues through the heirs of those heirs. Paragraph 2 defines the separated private fund as a separated fund with which a private interest is pursued more than incidentally, unless the separation was met by an issue of shares, profit certificates, membership rights, certificates of participation or comparable rights, or unless an economic entitlement arose. Paragraph 5 attributes to the beneficiaries, in proportion to the benefit each receives, where the settlor, his partner and his heirs cannot be determined, and paragraph 6 releases an heir who shows that neither he nor his partner is a beneficiary and neither can become one.
The Belastingdienst says plainly in its own guidance on afgezonderd particulier vermogen that Stiftungen and Anstalten in Liechtenstein are among the vehicles caught, that the assets of a separated private fund are attributed to the person who contributed them, and that after his death they are attributed to his heirs, each for his share. Its chapter on the subject in the 2026 tax information adds the point that matters most to a family that has been told the council has discretion: the heirs must declare the assets regardless of whether they do or will receive any distribution. Where someone holds a concrete right against the fund, such as a right to distributions, that right is valued separately in his own return and the attributed value is reduced by it.
That is the line between a discretionary expectation and a fixed entitlement, and Liechtenstein law draws it on its own side too. Under article 552 of the Personen- und Gesellschaftsrecht, paragraph 6 defines the beneficiary with a legal claim as one whose claim to a benefit determined or determinable in amount rests on the foundation deed, the supplementary deed or the regulations, while paragraph 7 defines the discretionary beneficiary as one who belongs to the class named by the settlor and whose possible benefit lies in the discretion of the foundation council. A discretionary beneficiary acquires a legal claim to a particular benefit only when the council validly resolves on an actual distribution, and that claim expires on receipt. The Dutch rule does not wait for any of that. It attributes to the settlor, and after him to the heirs, whether or not the council has ever resolved anything.
There is one exception and it is narrower than it is usually described. Paragraph 7 of article 2.14a takes out of the attribution only those assets, debts, income and expenditure which are shown to belong to the property or the profit of an enterprise of the separated private fund, and then only to the extent it is shown that the profit of that enterprise is subject to a tax on profits in the state or states where the enterprise is carried on. The Belastingdienst states the same test in ordinary words: the assets need not be declared where the fund is a real active business paying profit tax. The exception is therefore about an enterprise being taxed, not about the foundation being resident somewhere that has a corporate tax. A foundation that holds a participation and nothing else does not reach it.
Liechtenstein law leaves the room, and the room is the problem
The Personen- und Gesellschaftsrecht sets a low bar for the entity itself. Under article 552, paragraph 13, the minimum capital of a foundation is 30,000 francs, and it may equally be raised in euro or United States dollars, in which case it is 30,000 of those. Article 122 fixes the same figure for legal persons whose capital is not divided into shares, against 50,000 francs where it is and 10,000 for the Gesellschaft mit beschränkter Haftung. Article 552, paragraph 24, requires a foundation council of at least two members, and legal persons may sit on it.
What the statute does not do is require the foundation to be an operating business, employ anyone or maintain its own premises. It goes further than that. Article 552, paragraph 1, permits a foundation to carry on a commercially run trade only where this directly serves the attainment of its charitable purpose or is allowed under a special statutory basis, and for a private-benefit foundation it permits a commercial operation only so far as the proper investment and administration of the foundation assets requires. That is the point of a foundation. It is also, precisely, the list of things article 1bis of the Dutch regulation asks for. The Liechtenstein form is restrictive where the Dutch presumption is demanding, and the two texts are not in conflict so much as in different conversations.
The consequence is that a foundation can be entirely regular in Vaduz and entirely outside the Dutch safe harbour on the same day. Nothing has gone wrong in Liechtenstein. The question the Netherlands asks has simply not been answered, and it is not answered by the foundation existing.
The private asset structure buys a rate and sells the decision
Article 61 of the Steuergesetz sets the Liechtenstein income tax rate at 12.5 per cent of taxable net income, and article 62 imposes a minimum income tax of 1,800 francs on legal persons whose tax is not settled by deduction at source. That minimum is creditable in full against the income tax and is not levied where the taxpayer’s purpose is exclusively the operation of a commercially run business with an average balance sheet total over the last three financial years not exceeding 500,000 francs.
Article 64 then creates the private asset structure. A legal person qualifies where it pursues no economic activity, in particular where it only acquires, holds, manages and disposes of financial instruments within the meaning of the Vermögensverwaltungsgesetz, participations in legal persons, liquid funds and bank balances; where its shares are not publicly placed or traded on an exchange and are reserved to the investors defined in the article; where it does not solicit shareholders or investors or receive remuneration or cost reimbursement from them or from third parties for that activity; and where its statutes state that it is subject to the restrictions applying to private asset structures. Compliance is confirmed annually to the tax administration, which decides on the status, with 30 days to appeal, and a private asset structure is subject exclusively to the minimum income tax and is not assessed.
The second paragraph of article 64 is the one that matters for a Dutch subsidiary. A private asset structure may hold participations only on condition that neither it nor its shareholders or beneficiaries actually exercise control, through direct or indirect influence, over the management of those companies. That is not a filing requirement. It is a substantive prohibition on doing the thing the Dutch presumption requires.
Two rules that cannot both be satisfied
Put the two texts side by side. The Dutch regulation presumes good faith where the recipient’s own board decides, on its own responsibility, about the transactions it enters into in connection with its interest in the Dutch company. The Liechtenstein regime grants the minimum-tax treatment on condition that no control is actually exercised over the management of the companies held.
A foundation cannot occupy both positions on the same participation. It can decide about the Dutch company and pay Liechtenstein income tax at 12.5 per cent on its ordinary basis, or it can hold the participation passively as a private asset structure and pay the minimum income tax while failing the Dutch presumption. What it cannot do is claim the Dutch safe harbour in Amsterdam and the private asset structure status in Vaduz on the same facts.
Underneath either branch the attribution rule keeps running, and it is indifferent to which one the family picks. Article 2.14a asks whether a private interest is pursued more than incidentally and whether anything was issued in return, not whether the foundation is active or passive. Choosing the ordinary Liechtenstein basis raises the rate paid in Vaduz without, by itself, taking the foundation out of the attribution, because the statutory exception runs to the profit of an enterprise and not to the entity. Where the settlor or his heirs are resident in the Netherlands, that is the arithmetic to do first.
Stated that way the choice is manageable, and it is a choice most families have never been asked to make because the two regimes are administered by different advisers who never see each other’s files. The right moment to make it is when the Dutch company is acquired, not when a dividend is resolved three years later.
What the treaty gives, and what it asks in return
The treaty between the Netherlands and Liechtenstein signed at Bern on 3 June 2020, in force since 31 May 2021, caps Dutch tax on dividends at 15 per cent of the gross amount where the beneficial owner is a resident of the other state. Its third paragraph goes further and gives exclusive taxation to the state of residence where the beneficial owner is a company, not being a partnership, that directly holds at least 10 per cent of the capital of the paying company throughout a 365 day period that includes the day of payment, or where it is a recognised pension fund. The protocol adds that this third paragraph does not apply to dividends paid by or to a collective investment vehicle.
Two conditions in that sentence deserve attention. The holding period has to be satisfied on the facts, although changes of ownership that would result directly from a corporate reorganisation such as a merger or a divisive reorganisation are left out of account in computing it. And the entitlement runs to a company, which article 3 of the treaty defines as any body corporate or any entity that is treated as a body corporate for tax purposes. A Liechtenstein foundation is a legal person under the Personen- und Gesellschaftsrecht, so the definition is not an obstacle in itself, but residence is a separate question. Article 4 reaches a person who under the laws of a state is liable to tax there by reason of domicile, residence, place of management or any other criterion of a similar nature, and a structure that is subject exclusively to the minimum income tax and is not assessed invites that question rather than closing it.
Article 28 sits over all of it. A benefit under the treaty is not granted in respect of an item of income if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining it was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting it would accord with the object and purpose of the relevant provisions.
Beneficial ownership sits behind the domestic route as well. Article 4, paragraph 4, of the Wet op de dividendbelasting 1965 makes the withholding exemption in the first and second paragraphs available only for proceeds in respect of which the recipient makes plausible that it is the beneficial owner, and a foundation whose council is instructed in substance by a family council is not obviously in that position.
Where the decision has to be visible
None of this argues for dismantling the foundation. It argues for deciding what the foundation is for. Where its purpose is succession, and the Dutch company is an investment held for the family rather than a business run by it, the private asset structure route is coherent, and the group should expect to lose the Dutch presumption, to carry the attribution in the settlor’s or the heirs’ Dutch returns, and to defend the position on its facts instead.
Where the Dutch company is an operating business the group actually runs, the foundation should be on its ordinary Liechtenstein tax basis, its council should be composed of people competent to decide about that business, and its minutes should show them deciding. The wage cost and premises conditions in article 1bis follow from that decision rather than preceding it, and a foundation that genuinely directs an operating subsidiary will usually be able to meet them. Whether that also reaches the enterprise exception in article 2.14a is a separate question, and it is answered by what the foundation itself carries on, not by what its subsidiary does.
The failure mode is the third option, which is the one most files are in: a foundation claiming the passive regime at home and asserting active governance abroad. Both authorities can read the same statutes, and the two claims are visible in the same documents. A structure that has to be described differently in two places has already been decided against.
This article is informational and does not constitute tax, legal or investment advice. Each engagement is subject to scope and applicable regulation.