SECURITIZATION & THE NETHERLANDS ANTILLES
Netherlands Antilles special purpose vehicles are commonly used in cross-border financing transactions
Netherlands Antilles special purpose vehicles (SPVs) are commonly used in both cross-border financing transactions as well as in Netherlands Antilles domestic financing transactions. As regards cross-border transactions, (synthetic and cash) securitizations, repackagings, collateralized debt obligations (CDOs) and collateralized loan obligations (CLOs) and leasing transactions, MTN and other note issuance programs are among the most popular transactions involving a Netherlands Antilles SPV.
There are a number of reasons why the Netherlands Antilles is an attractive jurisdiction in which to set up an SPV in structured financing transactions. The first of these is the favorable Netherlands Antilles tax regime.
Investor considerations also often drive the SPV location. The Netherlands Antilles is a so called associate member of the EU, which makes a Netherlands Antilles SPV attractive to European investors. Based on domestic regulations in their home country, many European investors are precluded from, or restricted in investing in debt instruments issued by vehicles established outside the EU (such as the Cayman Islands and Jersey). The Netherlands Antilles is also a member of the OECD. The jurisdiction of residence of the SPV has become an increasingly important issue that may seriously affect the sale of securities to regulated EU investors.
Also, from a reputational perspective certain investors are less comfortable with investing in a tax haven SPV than in a SPV incorporated in the EU or an associate member state of the EU.
Over the past few years the Netherlands Antilles has solidified its reputation as a particularly attractive jurisdiction for setting up securitization vehicles.
Karel Frielink
Attorney (lawyer) / Partner
