Prospectus obligation in the Netherlands: when do you need one?

An offer of securities to the public in the Netherlands requires a prospectus approved by the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, AFM), unless an exemption applies. Most Dutch fundraisings rely on an exemption, but under Article 5:4 of the Financial Supervision Act (Wet op het financieel toezicht, Wft) an exempt public offer still needs an information document that you publish and send to the AFM before the offer starts.

The obligation comes from the EU Prospectus Regulation, which applies directly in the Netherlands. It is triggered by offering to the public or by admission to a regulated market, not by the size of your company.

When does an offer trigger the prospectus obligation?

An offer to the public is any communication, in any form, that gives enough information about the terms and the securities for an investor to decide to buy. A pitch deck sent by email, a website page with subscription terms or an investor newsletter can qualify.

The obligation rests on the offeror, so a shareholder selling existing shares to a wide group is covered as well as a company issuing new shares. It applies to a Dutch private limited company (bv) just as to a listed public company (nv). Calling the document informal or adding a disclaimer does not change this.

What counts as securities?

Securities (effecten) are transferable instruments: shares, bonds and other debt instruments, depositary receipts and rights to acquire them. A non-transferable instrument, such as a bilateral loan agreement, falls outside the prospectus regime.

Outside the prospectus regime is not outside supervision. Units in a fund that invests for the joint account of its participants bring the manager under the AFM’s fund rules in the Wft, and other instruments can fall under separate licensing regimes. Settle the classification before you structure the deal.

Which exemptions apply?

The Prospectus Regulation exempts several types of offer. The ones that matter most in Dutch practice are offers only to qualified investors, offers to fewer than 150 non-qualified persons per member state, offers with a minimum investment of €100,000 per investor, and offers of shares to employees by their employer.

These limits are counted, not estimated. The 150-person limit counts persons approached, not persons who invest: sending a deck to 300 contacts and receiving twelve subscriptions is outside the exemption. A wealthy private individual is not automatically a qualified investor. Keep a dated list of who was approached, in which capacity and on which basis.

What does an exempt offer still require?

Under Article 5:4(1) Wft the offeror of an exempt public offer must publish an information document and send it to the AFM before the offer. Under Article 5:4(2) Wft its information must be correct, clear and not misleading.

Under Article 5:4(3) Wft advertisements and documents announcing the offer must state that no AFM-approved prospectus is required. The AFM does not approve the information document, but it monitors these offers, and misleading statements create both supervisory and civil risks. The euro threshold for the national small-offer exemption changed under the EU Listing Act; check the current amount with the AFM before relying on it.

When is attracting repayable funds prohibited?

Under Article 3:5(1) Wft nobody may, in the course of a business, attract, obtain or hold repayable funds from the public in the Netherlands, unless an exception applies. Loan notes, bonds and crowdfunding loans all involve repayable funds.

Under Article 3:5(2)(d) Wft the prohibition does not apply to funds attracted through an offer of securities that complies with the Prospectus Regulation. Other exemptions are in the Exemption Regulation Wft (Vrijstellingsregeling Wft); for example, Article 24b exempts project owners raising loans through a licensed crowdfunding service provider. A financing can therefore comply with one rule and still breach the other: check both separately.

What about crowdfunding and licensed routes?

Crowdfunding platforms in the EU need a licence under the European Crowdfunding Service Providers Regulation, granted in the Netherlands by the AFM. Within that regime the platform carries out investor tests and provides the key investment information sheet.

Managing an investment fund requires an AFM licence or, below certain thresholds, registration. Placing or advising on securities for others for a fee requires an investment firm licence; a company issuing its own shares does not need one. Our guide on fjármögnun og verðbréf fyrir hollensk fyrirtæki covers the commercial routes, and our note on the fjármögnunarsamningur fjallar um samninginn sjálfan.

What happens after the money is raised?

If your securities are admitted to trading, the EU Market Abuse Regulation applies: you must publish inside information promptly, keep insider lists and have managers report their transactions. The prohibitions on insider dealing and market manipulation apply to everyone.

An unlisted bv must keep its shareholders’ register up to date under Article 2:194 of the Dutch Civil Code (BW), and every transfer of shares requires a notarial deed under Article 2:196 BW. Parties taking on investors may have customer due diligence duties under anti-money laundering rules; see our article on KYC rannsóknir.

What if the offer was not exempt after all?

The AFM can impose an order subject to a penalty or an administrative fine and publish its decision. Investors who subscribed based on incomplete or misleading information can claim damages in the civil courts, and in serious cases directors can be held personally liable.

Does investment screening apply?

Since 1 June 2023 the Investment, Mergers and Acquisitions Security Screening Act (Wet veiligheidstoets investeringen, fusies en overnames, Vifo) applies to acquisitions of control or significant influence in vital providers, business campus managers and companies active in sensitive technology. It applies to Dutch and foreign investors alike.

For sensitive technology, Article 4 of the Vifo Act sets thresholds starting at 10% of the voting rights. A notifiable transaction must be reported to the Minister of Economic Affairs and Climate Policy before completion. Our M&A checklist shows where this sits in a transaction timetable.

What should you check as an issuer?

• Decide whether your instrument is transferable; that choice determines whether the prospectus rules apply.
• Choose the exemption and document who you approach, with dates and investor status.
• Publish the information document and send it to the AFM before the offer (Article 5:4 Wft).
• Check the repayable funds prohibition of Article 3:5 Wft separately.
• Check whether your company falls under the Vifo Act before admitting a new investor.

What should you check as an investor?

• Check whether a prospectus or an information document has been published and filed with the AFM.
• Check that the statement on the absence of an AFM-approved prospectus is included (Article 5:4(3) Wft).
• Check whether a crowdfunding platform holds an AFM licence.
• Check that your shares are entered in the shareholders’ register and transferred by notarial deed.

What can we do for you with a securities offering?

Sem hluti af okkar lögfræðistörf fyrirtækja, we advise issuers, founders and investors:

• We determine whether your offer needs a prospectus and which exemption you can rely on.
• We draft or review the information document and the statement required by Article 5:4 Wft.
• We check whether your loan or bond structure complies with Article 3:5 Wft.
• We assess whether a transaction must be notified under the Vifo Act.
• We draft the subscription documents and coordinate the notarial deed of issue.

Yfirlit

• A public offer of securities requires an AFM-approved prospectus unless an exemption applies.
• Exemptions include qualified investors only, fewer than 150 non-qualified persons per member state and €100,000 minimum per investor.
• An exempt public offer still requires an information document sent to the AFM in advance (Article 5:4 Wft).
• The repayable funds prohibition (Article 3:5 Wft) is a separate test.
• Since 1 June 2023 the Vifo Act may require notification before completion.

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