Foundation

Setting up a social or non-profit cause

If you're looking to support a given social or not-for-profit cause, e.g. nature conservation, cultural heritage or a charity, one option may be to create a legal entity in the form of a 'foundation', or in Dutch a stichting.

Setting up a foundation

You'll need a civil-law notary to draft a deed, stating that you've created a stichting and listing its statutes. It's possible to set up a foundation on your own or with other individuals and/or legal entities, e.g. a BV. You can even do this posthumously in your will.

A stichting's statutes should include:

• Name, including the word 'stichting'
• Purpose/cause
• Procedures for appointing and removing officers
• Location
• Decision-making procedures
• Procedures and payments in the event of dissolution

Statutes often also include rules about the foundation's organisation. Be aware that you'll need a civil-law notary to amend the deed whenever you need to amend your foundation's statutes.

It's mandatory to list your stichting in the Commercial Register (Handelsregister) maintained by the Chamber of Commerce (Kamer van Koophandel, KVK).

Structuring a foundation

A stichting has a board, but no members. It may also be a business, but its profits must be allocated to the foundation's cause or purpose. The foundation's officers can even be paid employees, although this is not often the case. Generally speaking, officers only receive remuneration for their expenses.

It is not permitted to employ an executive officer if a stichting has a 'public benefit organisation' (PBO) status, or in Dutch algemeen nut beogende instelling (ANBI) status. It may, however, employ staff.

Committee member liability

A stichting is a legal entity, which means that its officers are theoretically not liable for any of its debts. There are, however, exceptions to this rule. For example, mismanagement, negligence or failure to list the stichting in the Commercial Register.

Taxes

A foundation operating as a business pays corporation tax (vennootschapsbelasting). In this context, a 'business' is any organisation running on capital and labour for the purpose of making profit through commercial activities and economic transactions. Any profits must be allocated to the stichting's cause or purpose.

Whether a foundation has to pay and charge VAT depends on its specific situation.

• See additional information on the Belastingdienst website (in Dutch)

Social security

As an officer of a foundation, you're theoretically not an employee. Consequently, you won't be covered under any employee insurance schemes.