Private equity manager with carried interest

A fund manager residing in the Netherlands participates in a Luxembourg-based fund structure with investments in multiple jurisdictions. In addition to a fixed management fee, he receives carried interest. The proceeds flow through a foreign holding company to his Dutch personal holding company.

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Nassau reviewed the tax treatment of carried interest in the Netherlands and Luxembourg, as well as the structure of the investment chain. This review examined the classification of the income and the tax status of the holding companies involved.

Analysis

Based on this, a structure was established in which the fund manager’s international investment activities and personal holding company are aligned. In doing so, attention was paid to the tax treatment of carried interest, dividend flows, and the international holding structure.

Hands-on implementation

Nassau oversaw the implementation of the structure and coordinated with international advisors. It also provided support with tax filings and reporting requirements in the relevant jurisdictions.