The Sint Maarten Private Fund Foundation (PFF)

A private fund foundation is one of the most common ways to hold investments and real estate on Sint Maarten. In Dutch it is called a stichting particulier fonds, and it is also known simply as a private foundation. On this page we use the English abbreviation PFF.

This guide explains what the foundation is, how it is taxed and when it is a sensible choice. It is written for property owners, investors and families who are considering one. It is also written for buyers who are offered a property that sits inside a PFF.

Whether a PFF works for you depends on your own situation and on the rules of the country where you live.

What a private fund foundation is

A private fund foundation is a foundation under Sint Maarten civil law. An ordinary foundation may only make payments that serve an idealistic or social purpose. A private fund foundation may also make distributions to private beneficiaries, such as the founder's family.

The foundation has no members and no shareholders. It owns its assets in its own name and is managed by a board. The articles of incorporation set out who the beneficiaries are, how distributions are decided and what happens when the founder dies.

A few features matter in practice:

The foundation is set up by notarial deed and registered with the Chamber of Commerce.
Its purpose may not include running a business. It holds, manages and distributes assets.
Anyone can set one up. The founder and the beneficiaries do not need to live on Sint Maarten.
Once assets are in the foundation, they belong to the foundation. The founder no longer owns them.

That last point is what makes the vehicle useful for succession. It is also the point people most often underestimate. A foundation that in reality still follows the founder's instructions on everything can be disregarded, and its assets then count as the founder's own.

How a PFF is taxed

Profit tax: exempt as long as there is no business

A PFF falls within the scope of Sint Maarten profit tax. Its income is exempt if, and to the extent that, the foundation does not conduct a business. That condition carries the whole structure.

The law defines a business broadly. It covers activities and services of any kind. Holding investments, receiving interest and dividends and letting property on long leases are generally treated as investment. Developing property for sale, trading or running an operating company inside the foundation are business activities. Profit from those activities is taxed at the regular rate of 34.5 percent.

The tax office looks at what the foundation actually does. What the articles say carries little weight if the facts point the other way.

An annual return, even when no tax is due

Every PFF must file a profit tax return each year, together with its financial statements. This applies even when all its income is exempt. The return is how the tax office checks that the foundation stays on the right side of the business line.

Distributions to beneficiaries

The foundation itself pays no tax on exempt income. Tax comes into play when money leaves the foundation.

A beneficiary who lives on Sint Maarten is taxed on distributions as ordinary income.
A beneficiary who lives abroad is not taxed on distributions on Sint Maarten. The rules of their own country decide what happens there.

Several countries treat the income of a foundation like this as income of the founder or the beneficiaries, whether or not anything is distributed. Advice on a PFF is therefore never complete without the view from the country where the founder and the beneficiaries live.

Gift and inheritance tax

Sint Maarten still has inheritance and gift tax legislation, but the tax is not collected in practice. A contribution of assets to a PFF does not, in practice, lead to a Sint Maarten gift tax bill.

Other taxes

The exemption covers profit tax only. Turnover tax, room tax on short stays and transfer tax on property deeds follow their own rules and apply to a foundation in the same way as to anyone else.

When a PFF makes sense

A PFF works best for money you do not need right away. Income can stay in the foundation untaxed and be reinvested or lent out. Once a Sint Maarten resident takes it out, it is taxed as income after all. For a resident, the foundation therefore postpones the tax.

Holding property in your own name is also less expensive than people often assume. Rental income is taxed on 65 percent of the gross rent, with mortgage interest deductible on top. Every taxpayer, resident or not, also receives the basic tax credit. For someone who lives on the rent, that can be the simpler and cheaper route.

A PFF tends to fit well when:

you want income to build up and be reinvested;
you want property or investments to stay together for the next generation;
the beneficiaries live outside Sint Maarten;
you hold property on the island that you may later sell to a foreign buyer.

It tends to fit less well when:

you need the income to live on and you live on Sint Maarten;
you want to keep full personal control over the assets;
you plan to develop and sell property inside the foundation itself;
your home country taxes the foundation's income as yours anyway.

Three ways to hold property on Sint Maarten

In your own name

Rental income is taxed in income tax on 65% of the gross rent. Mortgage interest is deductible.
Taking money out costs no further tax.
Business activities are allowed and taxed as business income.
Each year you file an income tax return.

Through a company (N.V. or B.V.)

The company pays profit tax of 34.5% on its actual profit.
Dividends to a Sint Maarten resident are taxed as income. Sint Maarten levies no dividend withholding tax.
Business activities are allowed.
Each year the company files a profit tax return with financial statements.

Through a PFF

Rental income is free of profit tax, as long as there is no business.
Distributions to a Sint Maarten resident are taxed as income. Distributions to a non-resident are not taxed on Sint Maarten.
Running a business may not be its purpose. Business profit is taxed at 34.5%.
Each year the foundation files a profit tax return with financial statements.

This overview shows the Sint Maarten side only. The country where you or your beneficiaries live may tax the same income again, or give credit for tax paid here.

PFF and real estate on Sint Maarten

Most PFFs on the island hold property. A few points come up in almost every case.

Getting the property into the foundation

The simplest route is to buy the property in the name of the PFF from the start. Transfer tax of 4 percent is then due on the purchase deed, as it would be for any buyer.

Moving a property you already own into a PFF is a different matter. Transfer tax is levied on the deed that transfers legal ownership. Depending on the situation, the contribution can be structured so that the 4 percent does not arise. That requires a carefully drafted agreement, and we can assist with it.

Letting the property

Long-term letting is generally an investment activity, and the rent stays exempt in the foundation. Short-stay rental with hotel-type services moves closer to running a business. Room tax and turnover tax have their own rules and apply regardless of the profit tax exemption.

Selling the property later

Buyers on Sint Maarten are often American or Canadian. Many of them are glad to take over a PFF that owns the property. Distributions from the foundation are taxed only in the buyer's home country. The property register also shows the foundation as owner, which keeps the buyer's own name out of it. A PFF can therefore make a property easier to sell.

Tax authorities still exchange information about foundations and their beneficiaries under international reporting rules. The privacy a PFF offers is privacy towards the public.

Setting up and running a PFF

Setting up the foundation is straightforward. Running it properly takes some discipline every year.

Test the plan first. Before anything is signed, the structure is checked against your goals and against the rules of the countries where you and your beneficiaries live.
Draft the articles. A civil law notary on Sint Maarten drafts the articles of incorporation: the board, the beneficiaries, the rules for distributions and what happens on the founder's death.
Incorporate and register. The notary executes the deed and the foundation is registered with the Chamber of Commerce.
Open a bank account. Banks ask who the founder, the board members and the beneficiaries are, and where the money comes from. This step often takes longer than the incorporation itself.
Fund the foundation. Assets are contributed, or the foundation buys property in its own name.
Keep it running. The board takes the decisions and records them in minutes. Each year the foundation prepares financial statements and files its profit tax return.

A foundation that consists of a deed and nothing else does not hold up when it is examined. Minutes, accounts and a board that actually decides are what make the separation from the founder real.

Considering a PFF?

We advise on private fund foundations from the first question to the annual return. We start with a short intake and an engagement letter. We then set out the options in a memo, including the alternatives, before anything is signed at the notary. Once the foundation is running, we can prepare its financial statements and profit tax return each year.

For the wider picture of doing business and holding assets on the island, see Doing Business in Sint Maarten: Tax Guide 2026. Filing dates for the annual profit tax return are listed in Sint Maarten Tax Forms and Filing Deadlines 2026.

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Frequently asked questions

Its income is exempt from profit tax as long as the foundation does not conduct a business. Distributions to beneficiaries who live on Sint Maarten are taxed as income. Distributions to beneficiaries abroad are not taxed on Sint Maarten.

Yes. Every PFF files a profit tax return each year with its financial statements, even when no tax is due.

Yes. The founder and the beneficiaries can live anywhere. Their own countries may tax the foundation's income or distributions under their own rules, so those rules need to be checked first.

Yes, and many do. Transfer tax of 4 percent applies to the deed by which the foundation acquires legal ownership. Long-term letting is generally fine; developing and selling property is a business.

Both separate assets from the person who provides them. A PFF is a legal entity with its own board. A trust is an arrangement in which a trustee holds the assets for the beneficiaries. For Sint Maarten profit tax, both are treated the same way.

The legislation still exists, but the tax is not collected in practice.

Partly. The property register and other public records show the foundation as owner. Banks and tax authorities still exchange information about foundations and their beneficiaries under international reporting rules.