The stichting, or foundation, is a business form that is most often used for social, cultural or non-profit organisations. The main aim is to benefit the stichting’s cause or purpose, rather than turn a profit for the founders. A stichting can be set up by an individual or a group, requires a deed drafted by a notary, and must be registered with the KvK.
The stichting in a nutshell
- Establishment: Notarial deed of incorporation
- Capital required: None apart from notarial costs
- Governance: Board of directors
- Liability: Board of directors in cases of negligence
- Social security: No social security benefits as the board is not in paid employment
- Taxation: Corporate income tax and BTW if operating as a business
The structure of a stichting
Unlike other business forms, the board of directors may not be in paid employment by the stichting. A stichting can choose to operate as a commercial business (employing labour to generate profit via commercial activities and transactions), in which case it will need to pay corporate income tax and BTW.
If a stitching does not operate as a commercial business, it is usually exempt from these tax forms. Whatever the case, any profits must be allocated to the cause of the stichting.