NETHERLANDS Trends and Developments Contributed by: Folko de Vries, Clifford Chance
private credit provider or an affiliate). Private credit providers should consider whether there is a possibility of any individuals having a (direct or indirect) 5% or more interest in the private credit provider and the relevant borrower as that would possibly, even absent Dutch residency or a Dutch permanent establishment, bring the pri - vate credit provider in scope of Dutch corporate taxation with respect to income derived from such borrowers. Further Regulation For some time, market participants have expect - ed increased regulation of private credit, given the growth of private credit and also its relevance to financial stability. The Dutch regulators are not specifically focused on regulating private credit providers. They are awaiting the implementation of the European Directives AIFMD2 but are not developing any initiatives in parallel. The current European Directive on Alternative Investment Fund Managers (AIFMD) requires fund managers to comply with a variety of pru - dential and conduct of business rules, which are general in nature and apply to business opera - tions and dealings with investors generally. AIFMD also contains rules which are specific to investment techniques (such as leverage) and which are specific to certain asset classes (such as private equity) but is silent on loan origination. AIFMD has, however, been amended (to include loan origination among other matters) but is yet to be implemented across the European Union. It is referred to as AIFMD2 in its amended form.
AIFMD2 introduces a range of rules on loan origination. These include subject matters such as implementing policies, procedures and pro - cesses for the granting of loans, implementing policies, procedures and processes for assess - ing credit risk, loan concentration restrictions, leverage restrictions and certain restrictions. These new rules are in relation to the business operations of the fund. They will not give the fund any regulatory permissions to grant loans to specific types of borrowers. That is a different matter and AIFMD2 is therefore without preju - dice to local rules on corporate and consumer lending which will continue to apply. The policies, procedures, processes, restric - tions and prohibitions referred to above, or other future regulatory requirements, may not be cause for concern for private credit provid - ers. Many investors in private credit are heavily regulated, resulting in extensive requirements for private credit providers to comply with.
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