Attractiveness of the Dutch Cooperative

The Key characteristics for a Dutch Cooperative are:

• The Dutch Coop has a legal personality. Instead of shareholders it has members;
• The Dutch Coop is incorporated by at least two members;
• The liability of the members of the Dutch COOP can be excluded in the statutes;
• The Dutch Coop is subject to corporate income tax in the Netherlands and is seen as tax resident under Dutch tax treaties;
• The Dutch Coop is not subject to Dutch dividend withholding tax on profit distributions (except in abusive situations when Coop has no real function).

What is seen many times is that the Dutch Cooperative is interposed between an investment fund with all the investors and the company which will be taken over (target company). In order to avoid tax leakage or tax risk, usually a Dutch BV will own the target companies. Consequently, the Dutch BV will be hold by the Dutch Coop (holding company) and together form a fiscal unity.

As described above the Dutch Coop can be an attractive vehicle in private equity / investment structures. Before the whole structure with the Dutch Coop is set up, we will obtain an advance tax ruling at the Dutch tax authorities, which ensure the tax treatment of the cooperative and its members.

For more information please see our powerpoint presentation about the Dutch Coop. Click here for it.