Incorporation of Offshore Companies
Jurisdiction: Dutch Limited Partnerships (CVS)
Although the C.V. is a partnership, is considered a juridical person, provided that the entity independence with respect to the members is sufficiently stressed at the time of the incorporation. For this purpose, the C.V. must be structured as a “closed” C.V., which, compared to the “open” C.V., limits and restricts the access to new members for the company to the unanimous agreement of the existing members. These features cause that the tax obligation arises to members, and not to the company (tax transparency). The correct structure further requires the Managing Partner not to be resident in Holland, with which the Limited Partner will not be considered to have a permanent domicile in Holland due to the activities of the general partner. The general partner may be a natural person (he should analyze with the local advisor the eventual consequence of residing in a determined country), or an entity. It may be further agreed in the partnership agreement that the general partner has the right only of a representative portion of the corporate capital (namely 0.0001%).
In this sense, Dutch legislation allows the total capital amount to be contributed to the C.V. be divided into participations of a specified nominal value, which may be transferable under certain conditions. In order to make easy the transfer of participations, participations deposit certificates will be issued in favor of the limited partner family members, for example. The C.V. may open, operate and close bank accounts. The limited partner (or a trustable person) may be authorized for said activities by means of a power of representation granted by the general partner. The possible consequences this might have for the limited partner in his residence country should be previously verified by the client with a local advisor.
Taxes: In case of a closed C.V., no taxes will be required in Holland on C.V. benefits, provided that this are properly structured. Profits from the C.V. may be immediately and indefinitely reinverted. Further, the limited partner and the general partner may differ tax by the C.V. profits for the time they wish.
CVs do not receive benefit of double taxation since they are transparent for tax purposes. However, if they are registered at the Dutch Chamber of Commerce, they may receive benefit of the same.
Other Jurisdictions: