Full text: Taxation of foundations in Europe

8.1. Civil Law Framework 
Foundations (stichting) are set up in many fields of society, not only in non-profit areas but 
also in connection with enterprises (a foundation may own a company, e.g. in the case of 
pension funds). Foundations may also be part of corporate structures or other forms of or-
ganisation including public and private elements. Foundations have always been regarded as 
special-purpose funds. The first legal provisions for foundations under private law date from 
1956. These rules could however not be applied to all types of foundations.  
In 1976, the then existing law was replaced by the Burgerlijk Wetboek (Civil Code), Book 2, 
in which a foundation is defined as a legal person. As a legal person, the foundation has no 
members and intends to use the funds endowed to it to pursue the foundation purpose as set 
out in the foundation statutes. The purpose may not consist in the execution of payments to 
founders or foundation bodies. In the Netherlands, foundations are comparatively flexible; 
they are not subject to any government supervision. However, there are current considera-
tions to subject foundations to stronger supervision and to require publication of annual bal-
ance sheets. Foundations must be entered in the commercial register; in March 2006, there 
were a total of 153,641 foundations in the Netherlands41.  
As a general rule, a foundation is established with a notarial deed. Legal persons, thus also 
foundations, are in principle established for an unlimited period of time; a time limit may how-
ever be laid down in the foundation statutes. Any person having capacity to contract may 
establish a foundation, also foreign legal or natural persons. 
In the Netherlands, establishing a foundation is very simple due to a lack of public supervi-
sion; it only requires entry in the commercial register. After publication, an annual fee has to 
be paid to the chamber of commerce. The founder is not required to endow the foundation 
with a particular amount of assets. 
A foundation may also be established causa mortis (in the event of the founder’s death) on 
the basis of a public testament. In this case, the foundation becomes the heir or legatee. In 
practice, however, a foundation is usually established inter vivos (during the founder’s life-
41 Cf. Volders/de Vries (2007), p. 1164 et seq.

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