By: David Dekel, Endeavour CEO
This article elaborates on the transition from fully managed by a Trust Company to a full own operation when having a company in the Netherlands.
First phase: trust management in the Netherlands
So, you have incorporated a Dutch company in the Netherlands and at the time of incorporation decided that trust services would be the best solution for your newly incorporated firm.
It saved you time to look for personnel, offices and set up processes. It gave you most of the needed services, under one roof. Accounting, legal, management and directors. It all came as one package and, in many times, did the incorporation phase for you as well. It was comfortable and was the right decision at the moment.
Time passes, you have some scope of operations and you start hesitating if the trust management solution is still the best option for your firm in the Netherlands.
Once your operations increase, you realize the following characteristics of the trust management firm:
- While nominee directors and location may come as a cheaper option, compared with your own full-time directors, the entire package of services is relatively more expensive, compared with own operations. In addition to the agreed standard fees, you find yourself pay much more for every decision or act you need the firm to exercise. These expenses are mostly not budgeted correctly in advance and tend to cause some tension with the trust management provider.
- The trust firms are highly regulated and therefore, every decision or action you may need, involves a review and decision process on the trust firm side. The trust firm needs to fully understand every request and action you may need and need to justify approving it to any regulator’s inspection. Therefore, it is difficult to operate in a fast pace in many times and approval and decision making are sometimes involving bureaucratic processes you are not used to.
- While the trust management directors are perfect for the starting phase, they are less qualified for the task, when your firm gains operation. Some trust firms have specific directors for specific industries, which is very helpful at the first phase, however, in general, they are lacking the operational experience to lead your firm when you involve customers, providers and general operations.
- One prominent issue where traditional trust management is very limited, is HRM. They may do the salary administration for your firm, but they will not manage your employees. This is mostly your responsibility to cover.
- If the trust company opened your firm’s bank account initially, these bank accounts are subject to specific regulations and agreement between the trust firm and the bank. It is crucial to understand, that if you ever leave the trust firm, the bank will close these accounts. There is no way you could leave them functioning, unless you move to another trust firm that has an agreement with the same bank. In any other case, these bank accounts will be terminated.
Please read the rest of the article on Endeavour’s website: