Setting up a foundation: this is what you need to know and how to arrange it

You establish a foundation via a notarial deed: you define the purpose in the articles of association, appoint the board, and have the foundation registered with the Chamber of Commerce. No members, no profit distribution — a foundation exists to serve a purpose, not to promote its own wealth. Often used for charitable purposes, asset management (family fund), shareholding (STAK), or as a manager of third-party funds. Processing time: one to two weeks. Costs: €350 – €800 for an online process.

Marlies — a former consultant, after selling her private limited company with surplus assets — wanted to establish a foundation for education projects in Africa. Simple in concept, complex in detail. Below is how it works, what is involved, and which pitfalls to avoid.

The short answer: foundation in 5 steps

1. Determine the purpose and name. What must the foundation achieve? Make it concrete for the articles of association.
2. Assemble the board. At least one director; often a three-member board.
3. The notary draws up the deed of incorporation with the articles of association.
4. AML client due diligence by the notary on the founder(s).
5. Registration with the Chamber of Commerce and UBO notification — the foundation exists legally.

What is a foundation?

A foundation is a legal entity with a purpose that not the promotion of its own wealth or the benefit of the founders/directors. No members, no shareholders — only a board that implements the established purpose. The legal basis is found in Book 2 of the Dutch Civil Code, Article 2:285 et seq.

What a foundation *can* do:

• Building and managing equity.
• Receive subsidies and donations.
• Pay remuneration to directors (provided it is reasonable and appropriate).
• Have employees in service.
• Engage in commercial activities, provided they contribute to the objective.

What a foundation is not allowed to do: distribute profits to founders or directors. A foundation with “disguised” profit distribution can be dissolved.

When do you choose a foundation?

Four common goals:

• Charities / non-profit. Education, health, culture, nature — a foundation is the legal form for public-oriented initiatives.
• Asset management (family fund). Management of family assets across generations, with structured distribution and protection.
• STAK (Administrative Office Foundation). Holding shares in a private limited company, with a separation between economic interest (certificate holders) and legal control (STAK board).
• Third-party funds foundation. Management of client funds separate from personal assets — mandatory for lawyers, notaries, and real estate agents.

For commercial activities with a profit motive, a BV is often more suitable — see what is a BV.

The step-by-step plan in detail

Step 1: preparation (1-2 weeks).

• Formulate the objective statement — specific enough to be credible, broad enough for future activities.
• Forming the board — at least one person. Usually three board members (chairperson, secretary, treasurer).
• Potentially consider a supervisory board for larger foundations.
• Potential ANBI status: investigate in advance whether you qualify (tax benefits for donors).

Step 2: notary and deed (1-2 weeks).

• Received draft deed from notary.
• AML investigation: identification of founders, potential UBO determination.
• Execution of the deed — the foundation comes into legal existence.

Step 3: after passing.

• Chamber of Commerce registration (by a notary).
• UBO notification within 8 days (foundations also have UBOs).
• Open a business bank account — see business bank account for your foundation.
• Possible ANBI application with the Tax and Customs Administration.
• Board meeting and initial decisions.

How much does it cost?

• Notary: €350 – €800 for online process; €600 – €1,200 at an in-person notary.
• Chamber of Commerce registration: often included.
• Additional legal documents (internal regulations, volunteer agreements): €250 – €750.
• ANBI application: free at the Tax and Customs Administration (submit yourself), with guidance €250 – €500.

Pros and cons

Advantages:

• Limited liability of directors (provided there is no improper management).
• ANBI status possible (tax benefits for donors).
• No shareholders, so no pressure on profit distribution.
• Good structure for family wealth, charities, or share certification.

Disadvantages:

• Directors have responsibility but no ownership interest (motivation sometimes lower).
• Not suitable for commercial activities with a profit motive.
• Amending the articles of association requires a notarial deed.
• Since 2021, stricter rules via the WBTR (Law on Governance and Supervision of Legal Entities) — more documentation, more accountability.

Honest recommendation

Establishing a foundation is a logical choice for purposes that do not require profit distribution — charities, family funds, STAKs, and third-party funds. Invest in advance in a clear mission statement and board composition; these two elements determine the viability of your foundation for the coming years. For STAK structures: see Establishing a STAK.

For the legal requirements: legal requirements for a foundation. For the step-by-step plan: how long does it take to set up.

Frequently Asked Questions