The Private Fund Foundation (SPF) is a special kind of foundation, which was introduced in Curaçao in 1998, years before Curaçao also introduced the trust (2012). In Dutch this is called: Stichting Particulier Fonds (SPF). With an SPF, private or family assets can be segregated into a separate legal entity. The SPF is therefore an instrument for estate planning and is an alternative to the Anglo-Saxon trust.
With a Curaçao Private Foundation you can safely accumulate capital and, above all, retain safe capital. The Private Fund Foundation is a legal entity with which you can protect your assets.
Real Estate and the Private Fund Foundation
Relationships who buy a house on Curaçao regularly come across this legal form. Many plots on Jan Thiel and real estate elsewhere on the island are owned by SPFs. This is partly due to the favorable options for transferring real estate without having to pay transfer tax.
The SPF must be established by notarial deed and be registered in the foundation register. The incorporation can be performed by a Curaçao authorized representative, so that the identity of the founder is not stated in the deed of incorporation. The articles of association must determine the manner in which directors are appointed and dismissed. The articles of association need only contain few regulations. If desired, a more detailed regulation can be included in internal regulations, which, unlike the articles of association, are not public. The SPF may not aim to make a profit by conducting a business, but may own shares, regardless of which country.
That is why we often find the SPF as a holder of shares in, for example, a Dutch BV. or a Luxembourg Sarl. An SPF may make distributions to the beneficiaries, and not be subject to gift tax. Contribution of assets is (in Curaçao) also exempt from gift tax. Furthermore, the founder is virtually free in determining the organization.
The wishes of the founder with regard to benefits are usually recorded in a so-called “Letter of wishes”.
The SPF must have a director or authorized representative established in Curaçao. In many cases, this function is performed by a trust company. The trust company will therefore always focus its actions on the wishes of the founder, as laid down in the letter of wishes.
