INVESTMENT COMPANY REGULATIONS IN THE DUTCH CARIBBEAN
Holding companies are not investing
An investment company (NV or BV) is a company that raises or obtains pecuniary means or other property to be used for collective investment with the objective of allowing the participants to benefit from the revenues of those investments.
The Netherlands Antilles National Ordinance on the Supervision of Investment Institutions and Administrators (‘Landsverordening Toezicht Beleggingsinstellingen en Administrateurs’) and the Central Bank’s policy guidelines based thereon do not make entirely clear what is regarded as an “investment”.
The explanatory memorandum to the Ordinance explains that certain activities do not tend to be considered as “investments”, such as holding companies. “Holding companies”, “securities brokers” and “venture capital companies” have been expressly excluded from the definition of Investment Institutions, either in the Explanatory Memorandum to the Ordinance or by the Central Bank.
Administrators are subject to supervision however. The Ordinance treats administrators separately and an administrator to an exempt Investment Institution may therefore still be regulated. General exemption is available, for example, to Investment Institutions (i) for which money or other pecuniary means are raised and obtained in a “restricted circle”, or (ii) for which participating interests are solicited or obtained from “professional parties” only, i.e. natural persons who, or legal entities which, in pursuit of their occupation or business deal or invest in investment objects.
Furthermore, Investment Institutions that offer their participating interests also (or only) to natural persons and/or legal entities considered by the Central Bank to have comparable skills and competency as the professional parties to form their own balanced opinion about the offer being made, may in individual cases be exempted. In determining whether an institution qualifies for this exemption, the Central Bank considers, in particular, the target group to whom the institution is offering its participating interests. This exemption, which is, strictly speaking, an individual dispensation, is available only if the minimum initial subscription is at least US$ 50,000 (or its equivalent in another currency).
Karel Frielink
Attorney (Lawyer) / Partner
