Dutch Cooperative
General
A Dutch Cooperative (“the Coop”) is a special form of association with a separate legal personality, which is governed by certain specific rules and the general rules applicable to Dutch associations. This mandatory statutory framework does not include the same rigid capital protection provisions that apply to Dutch NVs and BVs. Therefore, there is quite some flexibility in tailoring the articles of association of a Coop to individual needs. Further, there is no statutory requirement for a Coop to maintain a minimum amount of capital.
Coops are normally owned and controlled by their members, for example agricultural cooperatives and banking cooperatives. Because of the tax benefits and the flexible legal framework, Coops are nowadays also used as mere holding vehicles.
Incorporation
A Coop is incorporated by the execution of a notarial deed before a Dutch civil law notary. Dutch law requires that at least two persons act as incorporators of the Coop. As no approval of the Dutch Ministry of Justice or other approvals need to be obtained as part of the incorporation process and no bank or auditor's statement confirming the value of any agreed contributions by the members to the capital of the Coop are required, a Coop can normally be incorporated in a few days. The Coop has legal personality and may hold assets in its own name.
Tax Aspects
Contrary to, for instance, a Dutch BV, in general a Coop is not taxable for the purposes of the Dutch dividend withholding tax. In addition, it has access to the tax treaties concluded by the Netherlands, since it is considered to be a resident of the Netherlands. The use of a Coop can be beneficial in circumstances where Dutch withholding tax would be levied on profit distributions made by a BV/NV, but the shareholder cannot effectively credit the withholding tax against its corporate income tax liability.
In short the benefits of a Coop are:
- attractive treaty benefits where there is a tax treaty between the Netherlands and the jurisdiction of the Target Company;
- the Dutch participation exemption may be applicable on shares in subsidiaries;
- no Dutch dividend withholding tax on dividend distributions of the Coop to its members;
- non-resident taxpayers are in principle not taxed in the Netherlands for their membership of the Coop.
Liability
If the articles of association do not provide otherwise, members and former members are liable for deficits upon liquidation or bankruptcy. However, the Dutch Civil Code allows the liability of the members to be limited or excluded in the Articles. A member of a Coop U.A. (U.A. stands for exclusion of liability) shall for instance have no liability or obligation with respect to debts or obligations of the Coop in addition to the amount of any agreed equity contribution.
For more detailed information on the use of a Dutch Coop or other services which ATC provides, please contact Pieter Hallebeek (pieter.hallebeek@atcgroup.com).
