NETHERLANDS Law and Practice Contributed by: Vilmar Feenstra, Robert Veenhoven, Joyce Kerkvliet and Sebastiaan Verkerk, Loyens & Loeff N.V.
The security package for Dutch fund finance products is dependent on the type of financing. Typically, the security package for a subscription financing of a Dutch investment fund consists of
• the fund’s distribution bank account; • dividend rights; and • the equity in the relevant bidco or a holding entity structured below the fund. However, a wide variety of structures is being used in Dutch NAV facilities, including structures involving a newly set-up aggregator financing vehicle and more bespoke structures without equity pledges. Additionally, an increasing number of Dutch fund managers are using GP/team co-investment facilities whereby often (directly or indirectly) the team’s co-invest interest in the fund and/or management fees are used as collateral. There are generally no structural or legal issues that commonly arise in relation to fund finance In 2025 the Dutch tax classification rules for Dutch and foreign entities have changed. Under the new rules, limited partnerships (including the Dutch CV) in principle qualify as tax transparent. A Coop cannot be organised as a tax-transpar - ent entity in the Netherlands. A Coop is subject to corporate income tax on worldwide income, provided it is fully exempt from Dutch corpo - rate income tax on dividends and capital gains derived from the qualifying equity stakes in portfolio companies (the participation exemp - tion). Typically, the investments made by buyout funds and venture capital funds in their portfo - lio companies are eligible for the participation exemption. Profit distributions made by a Coop are subject to Dutch dividend tax if the Coop qualifies as a mere holding vehicle. A Coop that is used as a principal fund vehicle by fund managers that are (substantially) based in the in the Netherlands. 2.6 Tax Regime
a right of pledge over: • bank accounts; and
• the receivables of the investment fund vis-à- vis the investors (ie, the contractual right of the investment fund to receive capital contri - butions). Pursuant to Dutch law, security over receiva - bles can be established by way of a disclosed or undisclosed right of pledge. Typically, in rela - tion to subscription financing granted to a Dutch fund, a disclosed right of pledge over inves - tor receivables is created. A disclosed right of pledge is created by way of a security agree - ment and notification of the right of pledge to the relevant debtors of the secured receivables. There is no prescribed form for notification, and no requirement to include a detailed description of the security agreement. Such notification can be made by uploading the notice to the relevant investor portal, making the process of serving notice a fairly effortless procedure. An undis - closed right of pledge is created by way of a notarial deed or by way of a security agreement that is registered with the Dutch tax authorities for date-stamping purposes. In addition, depending on the type of financ - ing and the structure of the investment fund, security could also be granted in respect of the assets in which an investment fund would (indi - rectly) invest. This will be the case for certain hybrid facilities and for NAV facilities where a debt provider is lending against the value of the underlying investments. NAV facilities are typi - cally secured with a pledge over:
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