VENTURE CAPITAL COMPANIES UNDER THE LAWS OF THE NETHERLANDS ANTILLES
Venture capital companies included in exemption regulation
The primary objective of the National Ordinance on the Supervision of Investment Institutions and Administrators 2002 (‘Landsverordening toezicht beleggingsinstellingen en administrateurs’) is to introduce a regime of supervision for investment institutions and administrators in the interest of an adequate operation of the financial markets and the position of the investors in those markets.
Since a large number of investment institutions, whether or not themselves established in the Netherlands Antilles, have administrators in the Netherlands Antilles, administrators are subject to supervision as well.
Venture capital companies (as defined in the Central Bank’s policy guidelines) have been expressly excluded from the definition of investment institutions. Thus an investment fund (e.g. a limited partnership) does not qualify as a venture capital company provided it meets the following criteria:
- the shares of the enterprises in which the limited partnership holds an equity interest (the ‘enterprise’) can be issued to the public only with difficulty, or not at all;
- termination of the participation may occur only in consultation with the enterprise;
- the limited partnership exercises influence on the management of the enterprise, and is actively involved in the enterprise (in particular through the appointment of one or more (co-)policymakers or internal supervisors), and
- criteria (ii) and (iii) are laid down in a venture capital agreement.
In addition, the term of investment may serve as an indicator (but not as an independent criterion), i.e. if it is relatively long, e.g. five to ten years, it may support the view that the fund is a venture capital company.
Karel Frielink
Attorney (lawyer) / Partner
