Trust offices

What we do

Trust offices have been under close public and political scrutiny for years. As a result, supervision of trust offices has increased significantly in recent years. Since January 1, 2019, the Trust Offices Supervision Act 2018 (Wtt 2018) has served as an additional regulatory framework. De Nederlandsche Bank (DNB) has a supervisory role, grants licenses, and assesses the suitability and reliability of trust office policymakers.

The Wtt 2018 generally aligns with standards from the Financial Supervision Act (Wft) and the Anti-Money Laundering and Counter-Terrorism Financing Act (Wwft). Some rules for trust offices under the Wtt 2018 are:

• Trust offices may not provide both trust services and tax advice to the same client;
• a limited number of forms of legal personality are possible;
• standards apply regarding ethical and controlled business operations;
• The Netherlands Bank may prohibit persons from managing a trust office;
• The Dutch Central Bank can impose turnover-related fines for non-compliance.

We assist trust firms and clients of trust firms with issues such as:

• fines from the DNB or the Tax and Customs Administration;
• directors' liability;
• additional tax assessments from the Tax Authorities;
• FIOD investigations;
• due diligence;
• KYC or CDD examinations;
• compliance.

We have the knowledge and expertise to assume diverse roles: from advisory services to dispute resolution. Our team of lawyers and legal counsel works for the entire financial chain, from international corporations to the entrepreneur around the corner. Contact us to discuss the possibilities.

Licensing requirement and supervision by DNB

In the Netherlands, a trust office may only provide trust services after De Nederlandsche Bank has granted a license. Providing trust services without a license is prohibited and, moreover, constitutes an economic offence within the meaning of the Economic Offences Act. The Wtt 2018 rests on three pillars: requirements regarding the business operations and organization of the trust office, assessment of the suitability and reliability of the (co-)policymakers, and requirements regarding the client due diligence that the trust office must conduct. We assist trust offices with the license application, with setting up a Wtt-compliant governance and compliance structure, and with correspondence and discussions with the supervisor. International groups wishing to establish a Dutch trust structure, as well as smaller service providers falling just within the scope of the Wtt, can also turn to us.

Suitability and reliability of policymakers

The Dutch Central Bank (DNB) assesses the suitability and reliability of policymakers and co-policymakers of a trust company in advance. A negative assessment can result in a director being prohibited from taking office or in the DNB banning a person from managing a trust company. This directly impacts not only the organization but also the individual involved in their career. Our lawyers and legal experts prepare for the re-assessment, draft opinions, and assist directors in objection and appeal proceedings against assessment decisions. We combine knowledge of financial law with litigation experience, enabling a trust company director to present a full defense.

Client due diligence, AML/CFT and compliance

Trust offices fulfill a gatekeeper function. They are required to conduct ongoing customer due diligence (CDD), identify the ultimate beneficial owner (UBO), investigate the origin of assets, and report unusual transactions to FIU-Netherlands. In practice, shortcomings in customer due diligence are the primary trigger for enforcement. We assess procedures, files, and the integrity policy against the Wtt 2018 and the Wwft, assist in rectifying identified deficiencies, and advise on the consideration of terminating a client relationship when integrity risks are too high.

Ban on conduit companies

Since July 1, 2023, the Prohibition of Conduit Companies Act prohibits the use of a conduit company for the benefit of a client, either commercially or professionally. This prohibition applies to everyone, not just trust offices, and simultaneously removed the relevant trust service from the Wtt 2018. For trust offices and their clients, this means that existing structures must be reviewed and, if necessary, adjusted. We analyze whether a corporate structure falls under the prohibition, advise on alternatives, and guide the winding down or restructuring when necessary.

Enforcement: fine, penalty payment order and objection

The DNB has an extensive range of enforcement instruments at its disposal. The supervisor can issue a directive, impose a penalty payment order, impose an administrative (and turnover-related) fine, and report an infringement to the Public Prosecution Service. In addition, the Tax and Customs Administration can impose additional assessments and fines, and the FIOD can conduct criminal investigations. We defend during the notice of intent phase, submit views, and litigate objections before the DNB and appeals before the District Court of Rotterdam, which has the unique jurisdiction in financial supervision matters. Whether it concerns a large trust company or an individual policymaker, we ensure that your interests are clearly articulated.

Liability of trust directors

A trust company often acts as a director of the companies it manages. As a result, a trust director runs the risk of directors' liability: in the event of improper performance of duties, he may be liable to the company pursuant to Article 2:9 of the Dutch Civil Code, and in the event of bankruptcy, liability for the deficit in the bankruptcy estate may arise via Article 2:248 of the Dutch Civil Code. Personal liability towards third parties may also exist under certain circumstances. We advise on managing these risks and assist trust directors in liability proceedings. Read more about this topic on our page about directors' liability.

Trust offices within financial law

Supervision of trust offices is a specialty within the broader field of financial law. Issues surrounding trust offices touch upon the Financial Supervision Act (Wft), the Anti-Money Laundering Act (Wwft), administrative law, and corporate law simultaneously. By combining these areas in mixed teams of lawyers and in-house counsel, we provide practical and legally sound advice, from strategic decision-making to court proceedings. We assist both international corporations and smaller entrepreneurs.

Frequently asked questions about trust offices

Do I always need a DNB license to provide trust services?
In principle, yes: anyone who provides trust services commercially within the meaning of the Wtt 2018 requires a license from DNB. Whether your activities fall within the scope depends on the nature of the services provided; we would be happy to assess this for your specific situation.

What happens if DNB imposes a fine or an order subject to a penalty payment?
You can submit a statement of views, an objection, or an appeal against an enforcement decision. It is advisable to engage legal assistance as early as the preliminary phase, as this is often where the foundation for a successful defense is laid.

Does a trust director run a personal risk?
Yes. Because a trust company is often itself a director of managed companies, a trust director may be held personally liable for improper performance of duties pursuant to Article 2:9 of the Dutch Civil Code, and in the event of bankruptcy pursuant to Article 2:248 of the Dutch Civil Code.