When structuring international investment or asset-holding vehicles, non-residents often consider jurisdictions such as the Netherlands, Canada, New Zealand, and the US.
In this article we compare the Netherlands CV (commanditaire vennootschap), Canada LP (Limited Partnership), New Zealand LP, and US LLC—specifically focusing on transparency, tax deferral opportunities for limited partners, and the impact of recent legislative changes, especially for non-locals with non-local activities.
Key Comparison Table
|
Structure |
Fiscal Transparency |
Tax Deferral for LPs |
Public Disclosure & Privacy |
Recent Legislative Trends or Risks |
|
Netherlands CV |
Now generally transparent |
Transitional tax deferral only, then taxable |
Partners usually confidential; GPs more exposed |
No longer recommended due to 2025 rules |
|
Canada LP |
Transparent (income flows through) |
Losses and income allocated to partners; at-risk rules apply |
LP identities private; GP disclosed |
Stable regime; solid for non-residents |
|
New Zealand LP |
Transparent (income flows through) |
Income/losses allocated; restrictions on loss usage |
LP identity confidential; GP only disclosed |
Stable, favorable for non-residents |
|
US LLC |
Elective: transparent (default for multi-member) or opaque |
Flexible, no “year-round” tax deferral but advantages via structuring |
Members private; new US & NY disclosure rules may apply |
Consistently favorable, though disclosure evolving |
Jurisdiction Details & Key Takeaways
Netherlands CV (Commanditaire Vennootschap)
- Transparency: As of 2025, all Dutch CVs (and similar foreign partnerships) are classified as tax transparent by default (meaning, profits are taxed directly in the hands of partners). The former “consent requirement” for transparency is abolished.
- Tax Deferral: Transitional deferral is available under certain conditions until the legislation is fully in force, but ultimately, gains are triggered and taxed at the partner level.
- Privacy: Limited partner details generally remain confidential, but general partners’ details may be exposed.
- New Risks: Due to recent legislative changes, Dutch CVs lose their previous hybrid mismatch and tax arbitrage appeal and are now rarely recommended for non-residents, especially those with no Dutch activities. This is a clear shift away from using the CV for international tax planning.
Canada LP (Limited Partnership)
- Transparency: LP is fiscally transparent—income, losses, and capital gains/losses flow through to partners, who report in their own jurisdictions.
- Tax Deferral: No tax at the partnership level. Losses can be allocated annually to partners, who may use them to offset other income. Losses are restricted to LP’s “at-risk” amount.
- Privacy: Identities of limited partners are not part of public record, though are recorded and may be inspected in exceptional circumstances. General partner details are public.
- Suitability: Canada remains a robust choice for non-resident international structures due to stability, transparency, and treaty advantages.
New Zealand LP
- Transparency: The structure is fiscally transparent for tax purposes—partners are taxed in their own jurisdiction on their share of income; NZ does not tax foreign-source income of foreign partners.
- Tax Deferral: As with Canada, income and losses pass through. Losses are limited to actual economic risk and cannot be used for abusive sheltering.
- Privacy: General partner identities are public; limited partner information is confidential and not on public record.
- Suitability: New Zealand LPs enjoy solid international reputation, regulatory stability, and strong privacy, making them a premier choice for foreign-held ventures.
US LLC (Limited Liability Company)
- Transparency: By default, a multi-member US LLC is treated as a partnership (transparent), unless election is made to be taxed as a corporation. This provides much flexibility.
- Tax Deferral: No entity-level tax if treated as a partnership; income is reported by members. No classic “deferral,” but income can sometimes be timed with appropriate structuring.
- Privacy & Disclosure: Member identities are generally private, but the US Corporate Transparency Act (2024) and similar New York State rules (from 2026) require beneficial ownership information reporting to authorities. For most uses, these filings are not public, but regulatory trends point to increased transparency.
- Suitability: The US LLC remains highly favored for international holding, investment, and trading structures due to predictability, flexibility, and a well-developed legal environment.
Conclusion
- Netherlands CVs are NO longer recommended for most cross-border or non-resident investment structures due to legislative changes in 2025, which have eliminated key tax benefits.
- Canada LPs and New Zealand LPs—alongside US LLCs (used as pass-through/partnerships)—are now the preferred choices for non-residents seeking privacy, transparency, and favorable tax treatment for non-local activity.
- Each of these options (Canada LP, NZ LP, US LLC) offers:
Final tip
Non-resident investors should always seek bespoke legal and tax advice before selecting a jurisdiction, as details and consequences may vary based on the partners’ country of residence, type of activity, and evolving disclosure regulations.
This communication is provided for informational purposes only and should not be construed as legal, tax, or investment advice. Readers should consult qualified professionals before making any decisions related to legal structuring. The information herein is based on current laws and regulations which are subject to change.