Unknown, but not unloved: meet the Dutch STAK, stichting administratiekantoor

Are you thinking about handing over your business to your children within a few years, but would prefer to stay in control for the time being? With a foundation trust office (STAK), you can pass the torch to the next generation without sacrificing control or continuity. Dirk Merckx learned about this Dutch legal figure early in his career and immediately saw the benefits for numerous entrepreneurs and families. "When we introduce the STAK to clients, it is often the first time they hear about it. After a brief introduction, it quickly turns out to be the ideal planning technique for a balanced, thoughtful transfer of their family business."

"Suppose a manager is a 100 percent shareholder in a company and, upon his death, leaves two children. If nothing is arranged, each child receives 50% of the shares, and thus 50% of the voting rights. Practice teaches us that such a situation is often disastrous for the continuity of the company, for example, when the son is the heir apparent and the daughter has no affinity for the business. The STAK prevents a deadlock: by contributing all the shares to the trust office foundation, the voting rights remain parked there. In exchange, certificates are issued that represent the patrimonial rights and in turn can be the subject of inheritance planning. Thus, both children receive equal dividend rights, and the voting rights accrue exclusively to one of them."

Thanks to the efficient split between economic and legal rights, the STAK plays a key role in maintaining control after the transfer of a family business. This is true in Belgium, but especially in the Netherlands, which has years of experience with this certification vehicle.

Dutch STAK vs. Belgian private foundation

Continuity thus assured, and yet: the STAK is a planning technique that in Belgium - unlike in the Netherlands - has always lagged somewhat behind in terms of regulation.

Although Wivina Demeester drafted a bill in the early 1990s that would create a legal framework for the stichting administratiekantoor, this initiative received little political support. Only in 2002 did the STAK become law for the first time, grafted onto the legal figure of the asbl. In 2019, the Companies and Associations Code (CCC) followed, giving the Belgian foundation a flexible legislative framework and removing important obstacles, such as the need for a collegial board. In addition, the introduction of the European UBO regulations requires that certificate holders with more than 25 % in the UBO register, making the STAK a lot less anonymous. Despite the new fervor of the STAK and the mandatory UBO registration, the Dutch variant remains a favorite in Belgium as well. Master Merckx explains.

"Flexibility and discretion are the main arguments for choosing the Dutch STAK. The fact that one can quietly set up a Dutch structure contributes to this popularity. In recent years we have consistently advised our clientele along these lines, building up wonderful files, often in combination with the Dutch cheese route. At NOMA, we are convinced that the STAK offers solace for many family concerns during a business transfer. A topic that concerns many entrepreneurs - besides the day-to-day practical management - sooner or later."

The Finance Minister clarified that the STAK's income does not fall within the scope of the Cayman tax if the shares are certified and the income is distributed to the certificate holder within 15 days. A fiscally transparent figure, therefore, with no other taxable elements made taxable. "This confirmation reassures everyone," said Master Merckx. "There is no reason to transfer the Dutch structures to Belgium."

Tax advice for entrepreneurs, including in a family setting

That corporate taxation is not limited to the walls of the company, Master Merckx knows better than anyone else. "Our lawyers assist company managers in all their tax issues, including succession planning. Getting around the table with the children is a crucial step. Listening, playing the cards straight, sharpening expectations and clicking into conclusive agreements, ... Such discussions can be sobering, but at the same time also anointing. A fascinating challenge to take on as a lawyer and together create peace of mind towards the future."