Dutch Trust Offices Supervision Act (Wtt 2018): who needs a DNB permit?

Since 1 January 2019, the Trust Offices Supervision Act 2018 (Wet toezicht trustkantoren 2018, Wtt 2018) prohibits providing a registered address together with legal, tax or accounting services for the same client without a permit from De Nederlandsche Bank (DNB), even when two cooperating parties split those services between them. Providing only an address, without additional services and without a structural link to an adviser, remains outside the Act.

The Wtt 2018 replaced the original Wtt of 2004 and brought more organisations within DNB supervision. This article explains which services make you a trust office, what changed for providers of a registered address (“domicile plus”), and what this means for firms that combine advice with address referrals.

What is a trust office under the Wtt 2018?

A trust office is any legal entity, company or natural person that provides one or more trust services professionally or commercially. Under Article 3 of the Wtt 2018, you may not provide trust services from the Netherlands without a DNB permit, and DNB grants one only if you meet integrity, expertise and organisational requirements.

Article 1 of the Wtt 2018 lists six trust services:

• acting as director or partner of a legal entity or partnership on a client’s instructions;
• providing a postal or visiting address together with additional services (“domicile plus”);
• making a conduit company (doorstroomvennootschap) available to a client;
• selling legal entities, or acting as intermediary in their sale;
• acting as trustee of a trust or similar arrangement;
• performing general management acts for a legal entity as an outside authorised representative (gevolmachtigde), a service the Wtt 2018 added.

Each service carries its own risk. A director can bind the entity, a ready-made company can hide who is really behind it, and a trustee holds formal control over assets for someone else. DNB assesses the substance of what you actually do for a client, not the label you put on your services.

Why is the trust sector regulated?

Trust offices work close to their clients’ corporate structures, which creates a risk of involvement in money laundering, terrorist financing or tax evasion. The Financial Action Task Force (FATF) pointed to that risk, and self-regulation proved insufficient because not every office belonged to a professional body. The Wtt therefore requires a DNB permit and know-your-customer checks, so that an office knows exactly with whom it does business.

What does “domicile plus” mean?

Domicile plus is the combination of a registered or visiting address with additional services for the same client. An address on its own, without more, is not a regulated trust service.

The additional services that turn an address into domicile plus are, broadly:

• giving legal advice or assistance, beyond receiving post or visitors;
• tax advice, preparing tax returns and related services;
• preparing, assessing or auditing annual accounts, or keeping the administration;
• recruiting a director for the entity;
• other activities designated by administrative order.

The Wtt 2018 kept this list largely intact. In substance, the services that trigger domicile plus have not changed compared with the 2004 Act.

What changed under the Wtt 2018: the separation prohibition

Under the old Wtt, one party could do the legal, tax or accounting work and refer the client to a separate party for the address, often for a referral fee. Because no single party provided both services, no permit was needed. Article 3(4) of the Wtt 2018 closes that route.

The Act now also prohibits, without a permit, activities aimed at both providing an address and performing additional services for the same client, even where cooperating parties split them. The prohibition was introduced by amendment to the bill (Kamerstukken II 2017/18, 34 910, no. 7) and targets structures in which trust services are deliberately separated to avoid the permit requirement.

As a result, a firm that gives legal, tax or accounting advice and brings the client into contact with a specific address provider, for example through a standing referral arrangement, can need a DNB permit. The same applies to an intermediary that connects clients with both parties without providing either service itself.

An example to illustrate: an accountancy firm regularly incorporates companies and then systematically points every client to the same address provider, for a fee per referral. Under the Wtt 2018, this structural pairing can qualify as a trust service, even though the accountancy firm never provides the address itself.

When does a referral count as “bringing into contact”?

Structurally referring clients to one specific address provider, especially for a referral fee, is generally treated as bringing the client into contact within the meaning of Article 3(4). Recommending one named provider carries a similar risk, because the client no longer needs to search.

It is less clear whether pointing a client to a general list of several address providers, without recommending one, falls within the prohibition. There is little case law on the boundary, so treat each referral practice as a case-by-case risk under DNB supervision rather than assume it falls outside the Act.

What happens if you operate without a required permit?

Providing trust services without a DNB permit breaches Article 3 of the Wtt 2018. DNB can impose an order subject to a penalty (last onder dwangsom) or an administrative fine (bestuurlijke boete).

Banks must also check under anti-money laundering rules whether counterparties that need a Wtt permit actually hold one, so an unlicensed structure can cost you your banking relationships. Untangling a structure that has run for years takes far longer once DNB or a bank has started asking questions.

What should you check as an adviser or intermediary?

Law, tax and accountancy firms are most often caught by the separation prohibition without realising it. Check:

• Whether you routinely mention one specific address provider to clients, formally or informally.
• Whether you receive a referral fee, discount or reciprocal referrals from that provider, directly or indirectly.
• Whether your services include legal, tax or accounting work, administration or recruiting directors for the same clients.
• Whether you can restructure the referrals so that there is no standing, compensated link, or need to apply for a DNB permit.
• Whether your client files show the substance of each referral, in case DNB or a bank asks.

What should you check as an address provider?

As an address provider, your permit position depends on what others do for your clients. Check:

• Whether you provide only an address, or also any of the additional services listed above.
• Whether clients reach you through a fixed adviser, and whether you pay that adviser for referrals.
• Whether your contracts with advisers or intermediaries describe a structural cooperation.
• Whether your bank has asked about your Wtt status, and what you answered.

What can we do for you with the Wtt 2018?

We advise advisory firms, address providers and businesses on Dutch corporate and regulatory questions, as set out on our corporate lawyer page. In practice we:

• Assess whether your services or referral practice qualify as a trust service under Articles 1 and 3 of the Wtt 2018.
• Review your contracts and fee arrangements with address providers or advisers.
• Propose a restructuring of referrals that removes the structural link, where that is possible.
• Prepare the questions DNB will ask when you apply for a permit.
• Respond on your behalf to questions from DNB or your bank about your Wtt status.

Summary

• The Wtt 2018 took effect on 1 January 2019, replaced the 2004 Wtt and brought more organisations within DNB supervision.
• A DNB permit is required for six trust services, including acting as director, domicile plus, providing a conduit company, selling legal entities and acting as trustee.
• Under Article 3(4), splitting a registered address from related legal, tax or accounting services between cooperating parties no longer avoids the permit requirement.
• Whether a referral counts as “bringing into contact” depends on the circumstances; structural, paid referrals to one provider carry the highest risk.

Frequently asked questions