What is a Private Fund Foundation and why should you consider it as an option to protect your assets?
By BrightPath Caribbean
May 19, 2023
Every day a good number of real estate transactions happen in Sint Maarten, and do you know what most big investments have in common? A Private Fund Foundation protecting the asset.
A Private Fund Foundation (PFF), known in Dutch as “Stichting Particulier Fonds” (SPF), is a legal entity protecting assets, investments or funds. Foreigners can create and fully participate in a PFF. With no members or shareholders.
Unlike most private foundations, the PFF can make distributions to the incorporators and others without having a social or charitable purpose. Beneficiaries, if named, can have general or limited rights.
A PFF is formed (incorporated) by the execution of a written legal document (Foundation Deed) in front of a local civil law notary. The deed is similar to a corporate articles of incorporation as it details the purposes, objectives, initial assets, and operations of the foundation.
A Private Fund Foundation can own real estate. However, actively buying and selling real estate may be considered a business or enterprise. Collecting rent from tenants in owned real estate is not a business or an enterprise.
Private Found Foundations are exempt from profit taxes (corporate and income taxes). This exemption rests upon one condition: the PFF does not operate a business or an enterprise for profit. However, the law states that investment activities and acting as a holding company do not qualify as business or an enterprise.
What are the benefits of a Private Fund Foundation in Sint Maarten?
Total Foreign Participation: A Sint Maarten PFF can be formed by a foreign founder and have foreign beneficiaries.
No Taxes: The PFF is totally tax exempt unless actively engaged in business or enterprise activities for profit. However, U.S. residents and everyone subject to global income taxes must report all income to their governments.
Privacy: If beneficiaries are appointed, their names never appear in any public records.
Time for Formation: A Sint Maarten Private Fund Foundation can be formed and registered as fast as two business days with BrightPath.
Private Fund Foundations are widely used in Sint Maarten to protect real estate assets and point specific beneficiaries, a PFF will help you protect your investment for future generations.
Every situation is unique, and we, therefore, advise you to consult with a tax advisory firm to tailor your estate planning. We can always introduce you to our referral partners for financial advice.
Start the process for your own Private Fund Foundation today. Book a consultation with our team and let us assist you in the process of incorporation, and if you want your PFF to protect a Real Estate investment, let our sister company BrightFuture Realty help you with the purchase of your dream property.