Netherlands

Security interest law in the Netherlands

1. Can an intercompany guarantee be granted?

1.1 Upstream?	Yes, but certain types of entities are subject to financial assistance rules.
1.2 Downstream?	Yes
1.3 Lateral?	Yes
2. Can a guarantee be given under foreign law (e.g. English law)?	Yes
3. Any special arrangements (e.g. to deal with transfer pricing/corporate benefit)?	No

4. Can a security interest be granted in the following type of asset?

4.1 Real property	Yes
4.2 Shares (privately held)	Yes
4.3 Shares (marketable securities)	Yes
4.4 Receivables	Yes
4.5 Bank account	Yes
4.6 IP/Trademark	Yes
4.7 Equipment/Plant/Machinery	Yes
4.8 Inventory	Yes
4.9 Insurance	Yes
4.10 Rights under a contract	Yes
5. Can security interests be granted to a foreign lender?	Yes
6. Can multiple security interests be granted over the same asset?	Yes, pledges and mortgages will rank according to seniority.
7. Can a security interest be granted to secure liabilities of a holding company, a subsidiary or any other affiliate?	Yes, but certain types of entities are subject to financial assistance rules.

8. In order to be enforceable against third parties, must a security interest be?

8.1 Notarised?	Yes, only mortgages and share pledges.
8.2 Registered?	Yes, only IP pledges, undisclosed receivables pledges and non-possessory pledges on moveable assets.
8.3 Other?	Yes, notification of debtors for disclosed pledges.
9. Does registration in most cases protect the secured creditor against the debtor’s subsequent dealings with the secured asset?	No
10. Is there any stamp or similar tax or duty payable on the security document?	No

11. For a security interest to be legally enforceable which items must be filed as part of the registration or notarisation process?

11.1 Entire security agreement?	Yes
11.2 Names of pledgor and pledgee?	Yes
11.3 Description of secured asset in general terms?	Yes
11.4 Description of each individual secured asset?	No
11.5 Documents concerning ownership of secured asset?	No
11.6 Documents concerning debt in respect of which the asset is being secured?	No

12. Can a right to enforce security arise:

12.1 When the secured debt is unpaid and due?	Yes
12.2 When there is some other breach of the pledge/security agreement?	Yes
12.3 When the debtor becomes insolvent?	Yes
13. Can the creditor enforce its security interest by taking possession of the asset and selling it without court assistance?	Yes, pledged assets in most asset classes (not shares).
14. Is an instrument for direct enforcement necessary/available/market practice?	Yes, pledgees and mortgagees have the right of direct enforcement.
15. Are powers of attorney to the secured party used to facilitate a sale of secured assets in an enforcement situation?	Yes, mostly as backup.
16. If a sale is permitted without court assistance does it have to be made by public auction?	Yes, either by public auction or, after a sale is permitted, by private agreement.
17. Can a transfer of all or part of the debt be made without affecting the security over the assets?	Yes, the creditor can assign the receivables to a third party or, with permission of the debtor, transfer the entire contract.
18. Is there anything else of which a lender should be aware as unusual or particularly difficult?	Syndicated loans require a parallel debt structure to establish security for the security agent. The sale of pledged shares can be cumbersome. The enforcement of security over moveable assets on the property of a tax debtor is subject to notification of tax authorities and a waiting period of up to 4 weeks.