Understanding the Dutch STAK: a strategic tool for ownership and governance

Are you in the process of transferring your business to the next generation, but still want to be in control? Are you in the process of raising capital, but you would like to remain in full control over your business, separating economic and legal ownership? The establishment of a Dutch Stichting Administratiekantoor (STAK) might be a flexible solution to reach your goals.

A STAK is a legal entity that holds company shares and issues depositary receipts, separating legal from economic ownership.

How does a STAK work in a corporate structure?

1. Asset transfer: A company or individual transfers legal ownership of assets, such as shares, to the STAK.
2. Depositary receipts: The STAK issues depositary receipts in exchange for the ownership of the asset.
3. Separation of rights: The STAK holds legal title and voting rights over the asset, while the depositary receipt holders keep economic benefits like dividends.
4. Independent management: An independent board manages the STAK per its articles of association and trust conditions, exercising (partly) voting rights over the asset.

The establishment of a STAK requires the involvement of a Dutch civil law notary, who will draft the deed of incorporation (including articles of association), as well as the Trust Conditions (“Administratievoorwaarden”). This will, among others, include 1) the name of the STAK, 2) its purpose and activities, 3) the appointment of board members, 4) the rules of issuing depositary rights, and 5) conditions on the transfer of depositary rights. The STAK will be registered with the Dutch Trade Register to ensure legal recognition and transparency.  

Key features and advantages of a STAK

• Control and governance: Founders or families can retain voting control even after transferring economic ownership.
• Succession planning: Smooth transition of ownership across generations.
• Flexibility: STAKs provide versatile solutions for structuring governance that can accommodate various asset types and management structures.
• Asset protection: STAKs provide a layer of protection for assets against hostile takeovers or unforeseen financial events.
• Employee incentives: STAKs can be used to grant employees the financial benefits of share ownership without giving them voting rights.
• Tax transparency: The STAK itself is typically a tax-transparent vehicle, meaning income and capital gains are taxed at the beneficial owner's level, not within the STAK.
• Simplicity: Creating and managing a STAK involves straightforward procedures and minimal initial filing requirements.

Common applications of a STAK

• Business governance: Many companies use STAKs to retain control over governance and ensure the seamless transfer of leadership across generations.
• Family wealth management: STAKs are frequently used to organise and transfer family wealth, offering both asset protection and streamlined estate succession.
• Raising capital: Companies use STAKs to raise capital, remaining in full control over their operational business.
• Management Equity Plan: Investor-owned businesses are using STAKs to provide incentives to senior management to remain involved in the business and to benefit from an exit in future.

How can Ocorian help?

We specialise in supporting our clients in setting up, managing, and administering the STAK, streamlining corporate processes and enhancing governance to help clients expand into Europe efficiently. You can benefit from our network and global footprint to ensure all financial, tax, legal, and regulatory requirements are met. 

Ocorian does not provide financial, tax, or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend rendering professional tax and legal advice when setting up a STAK.