Category: General

The future of investment dispute settlement

The original article was published in Family Office Magazine and can be found here.

Entrepreneurs engaging in international investments face several issues when they are accused of a breach of contract. When the investment agreement does not provide solid provisions for dispute settlement, endless legal discussions and expensive court cases in unfamiliar jurisdictions can be the result. This article provides simple solutions for both investor and beneficiary to avoid such issues. 

The solution to avoid endless legal battles is to insert an arbitration clause in the investment agreement (out of court legislation). Arbitration has numerous advantages.

  1. Unlike in court, parties can select an arbitrator with an appropriate degree of practical experience. For example, a Court of Arbitration has a list of arbitrators who are experts in the field of digital commerce.
  2. Arbitration is faster than litigation in court, and a time limit can be placed on the length of the process.
  3. Arbitration is cheaper and more flexible, more commercial and less formal than court.
  4. Unlike court rulings, arbitration proceedings and arbitral awards are confidential.
  5. Unlike in court, there are very limited avenues for appeal of an arbitral award, which limits the duration of the dispute and any associated liability.
  6. Due to the provisions of the New York Convention 1958, arbitral awards are far easier to enforce in other nations than court judgments.

From an international perspective, there are several courts of arbitration that offer an effective way to solve investment disputes. Below are examples (in alphabetical order).

Astana International Financial Court (AIFC Court)

The AIFC Court in Kazakhstan provides a common law court system that operates to the highest international standards to resolve civil and commercial disputes in the Astana International Financial Centre.  It adjudicates exclusively all claims arising out of the AIFC and its operations and other claims in which all parties to the dispute agree in writing to the jurisdiction of the AIFC Court.  

The AIFC Court has its own court of final appeal, its own procedural rules, and a special fast track for small claims. Its Chief Justice and judges are among the most experienced and distinguished judges from the common law world with global reputations for independence, impartiality, integrity, unconditional application of the rule of law, and incorruptibility. The judges, procedures, practices and standards at the AIFC Court will be familiar to businesses currently operating in major financial centres around the world.


Dubai International Financial Courts (DIFC Courts)

The laws establishing the DIFC Courts were designed to ensure the highest international standards of legal procedure, thus ensuring that the DIFC Courts provide the certainty, flexibility and efficiency expected by the global institutions operating in, with and from Dubai and the UAE. The laws enacted provide for a court system capable of resolving all civil and commercial disputes, ranging from sophisticated, international financial transactions to debt collection and employment disputes.

The DIFC Courts deal exclusively with all cases and claims arising out of the DIFC and its operations and any other claims where all parties agree in writing to use the DIFC Courts. The DIFC Courts carry out their functions in an independent manner, in accordance with the provisions of the DIFC laws and regulations.


Court of Arbitration of the European Chamber of Digital Commerce (ECDC Court)

As an activity of its parent organization, the Swiss Chamber of Commerce in The Netherlands, founded in 1933, the Court of Arbitration of the European Chamber of Digital Commerce plays a crucial role in today’s digital world. Issues specific to digital technology include fintech, blockchain, cybersecurity, digital currencies, and intellectual property. Fairness has always been a business tradition observed in Europe, making the region so prominent as an arbitration location. The Court of Arbitration is conveniently located at Schiphol International Airport in The Netherlands.

The Court of Arbitration applies the UNCITRAL Arbitration Rules of the United Nations Commission on International Trade Law which meet international legal standards. The rules are concise and easy to understand, comply with current national and international legal developments, and are published in several languages.

Unless parties do not agree otherwise, the Court will apply the neutral UNIDROIT Principles of International Commercial Contracts to judge the dispute.


London Court of International Arbitration (LCIA)

The LCIA is one of the world’s leading international institutions for commercial dispute resolution. The LCIA provides efficient, flexible and impartial administration of arbitration and other ADR proceedings, regardless of location, and under any system of law. The international nature of the LCIA’s services is reflected in the fact that typically over 80% of parties in pending LCIA cases are not of English nationality. 

The LCIA has access to the most eminent and experienced arbitrators, mediators and experts from many jurisdictions with the widest range of expertise. The LCIA’s dispute resolution services are available to all contracting parties without any membership requirements.


Arbitration Institute of the Stockholm Chamber of Commerce (SCC)

The Arbitration Institute of the Stockholm Chamber of Commerce (SCC) has developed into one of the world’s leading forums for dispute resolution. The SCC was established in 1917 and is part of, but independent from, the Stockholm Chamber of Commerce. The SCC consists of a Board and a Secretariat and provides efficient dispute resolution services for both Swedish and international parties. The SCC was recognized in the 1970’s by the United States and the Soviet Union as a neutral centre for the resolution of East West trade disputes. Also China recognized the SCC as a forum for resolving international disputes around the same time. The SCC has since expanded its services in international commercial arbitration and emerged as one of the most important and frequently used arbitration institutions worldwide.



When you want to avoid legal dramas unfolding from an investment agreement, check the websites above and copy the relevant clause into the agreement before signing. Another option is to persuade the counterparty to allow an already arisen case be settled by one of these arbitration institutions.

About the author: Bob Juchter van Bergen Quast, LLM, FSS, is the President of the Court of Arbitration of the European Chamber of Digital Commerce. Juchter van Bergen Quast has the right of audience before the AIFC. He is Chief Executive Officer of the Swiss Chamber of Commerce in The Netherlands and the European Chamber of Digital Commerce.

DIFC Courts corporate video

The DIFC Courts are an independent English language common law judiciary, located in the United Arab Emirates (UAE) and based in the Dubai International Financial Centre (DIFC). This video briefly explains the work of the Courts, why leading international law firms in the region use their services and how their role encourages investment in Dubai. The DIFC Courts’ jurisdiction governs civil and commercial disputes nationally, regionally and worldwide. The DIFC Courts are part of the sovereign structure of the UAE Emirate of Dubai and more than 500 cases have been decided since the Courts began operations in 2006. Based on international best practice, the Courts are an important resource for international businessmen seeking to resolve commercial legal disputes, as well as the enforcement of national and cross-border judicial decisions. The DIFC Courts’ official Enforcement Guide was created in 2012 to provide details on the enforcement of DIFC Courts’ judgments in Dubai, the UAE, the Middle East and across the world. The document is available on our website

See the corporate video here.

Intermediary commission percentages to raise money from investors

Investment banks and other consultants can plan and execute a fundraising campaign for startups and for companies in the growth phase. A reputable fundraising intermediary will likely speed up the process, reduce the legal risks, and negotiate a better deals. Most brokers will take a monthly retainer plus 5 percent to 15 percent of the investment. That may sound like a lot, but taking into account the time and risks, hiring an experienced expert can be very budget friendly.

Commission guidelines

The Lehman formula is a compensation formula developed by Lehman Brothers to determine the commission on investment banking or other business brokering services. Lehman Brothers developed the Lehman Formula, also known as the Lehman Scale Formula, in the 1970’s while raising capital for corporate clients.

The original structure of the Lehman Formula is a 5-4-3-2-1 ladder, as follows (accumulated amounts):

  • 5% of the first million EURO involved in the transaction
  • 4% of the second million
  • 3% of the third million
  • 2% of the fourth million
  • 1% of everything thereafter (above EUR 4 million)
Today, financial experts often seek some multiple of the original Lehman Formula, such as the double Lehman Formula (or the triple Lehman) (accumulated amounts):
  • 10% of the first million EURO involved in the transaction
  • 8% of the second million
  • 6% of the third million
  • 4% of the fourth million
  • 2% of everything thereafter (above EUR 4 million)
A more common variant used by mid-market M&A specialists and business brokers is the Double Percentage Lehman (“Modern Lehman”). Under this variation both the percentages and the scale are adjusted, instead of the percentages only. In addition, the percentage is held constant at 3% above EUR 8 million (accumulated amounts):
  • 10% of the first  million EURO
  • 9% of the second  million
  • 8% of the third million
  • 7% of the fourth million
  • 6% of the fifth million
  • 5% of the sixth million
  • 4% of the seventh million
  • 3% of everything thereafter (above EUR 7 million)

Source: Investopedia

How Chambers of Commerce Help Family Offices and Wealth Management Firms

A Chamber of Commerce has traditionally furthered the interests of businesses in a particular geography or market sector by way of representation, business services, and networking opportunities. Multilateral Chambers of Commerce can link the business environments of two or more countries, such as the Swiss Chamber of Commerce in The Netherlands.

International Chambers of Commerce, such as the European Chamber of Digital Commerce, aim to boost companies’ reputation and growth in a particular business sector, such as Digital Technology. Some are governmental, nonprofit, or private organisations.

This article, written by Bob Juchter van Bergen Quast and published in Family Office Magazine, presents some unique benefits that Chambers of Commerce can offer businesses in an independent, impartial manner.

Read the full article here

Functions of the AIFC Court

The AIFC is underpinned by an ambitious objective to become the financial hub for Central Asia, the Caucasus, Eurasian Economic Union, the Middle East, and Europe. The new financial centre is positioning itself to attract US$ 40 billion of investments by 2025 and ensure about 1 per cent growth in the carbonless GDP of Kazakhstan. Kazakhstan is the largest and most oil rich country in Central Asia.

Legal framework

The governing law of the AIFC is based on the Constitution of Kazakhstan and has a special legal regime, consisting of the AIFC Constitutional Law “On the Astana International Financial Centre” (the Law), its own independent judicial system and jurisdiction based on English common law and standards of leading international financial centres. The official language of the AIFC is English.

Like its neighbouring financial free zone the Dubai International Financial Centre (DIFC) (whose Courts were selected to advise the Kazakhstan Central Bank on establishing the AIFC’s commercial court and arbitration centre), the AIFC has its own specific legislation to address issues arising in the context of companies, contract, implied terms, obligations, damages and remedies, employment and partnership law.

It is reported by the Prime Minister of Kazakhstan that a total of 30 general-purpose AIFC Acts and 17 financial services regulation acts were developed and subsequently adopted by the relevant bodies of the AIFC. About 50 acts constitute the legislative framework of the AIFC.

Source: Norton Rose Fullbright

Official opening of the Court of Astana International Financial Center (AIFC)

The official opening of the Court of Astana International Financial Center (AIFC) took place in Nur-Sultan.

Since January last year, civil and commercial disputes have been solved in accordance with the best international practices and based on English law. The first case went to AIFC court in February of this year. The case is now available in English and Russian on the court’s website.
At similar international financial courts in Dubai and Qatar the first case was considered much later. “We managed to get enforced through the enforcement agency in Kazakhstan almost immediately and that is a world first, that never happens in new international financial centers,” said Registrar of AIFC Court, Christopher Campbell-Holt.
The AIFC Court is an independent institution as part of the financial center. According to the registrar of the Court, Christopher Campbell-Holt, the presence of this court in Kazakhstan is an additional factor to investment attractiveness of not only the country, but also the Eurasian region. “No one can tell our judges what to do. That is written in the constitution in law, court and arbitration center. It is very important to protect international investors, to show them, to give them perception,” Campbell-Holt also said. He added that the AIFC court and the International Arbitration Center will enable investors from all over the world to invest safely in Kazakhstan.

International Dispute Resolution – the advantages the Court of Arbitration of the European Chamber of Digital Commerce

The Court of Arbitration of the European Chamber of Digital Commerce plays a crucial role in today’s digital world. The appeal and quality of this independent arbitration institution are as valued today as ever. Fairness, even when there is a dispute, has always been this business tradition which continues to be observed in Europe, making the region so prominent as an arbitration location.


  • Unlike in court, parties can select an arbitrator with an appropriate degree of practical experience. The Court of Arbitrage has a list of arbitrators who are experts in the field of digital commerce.
  • Arbitration is faster than litigation in court, and a time limit can be placed on the length of the process.
  • Arbitration is cheaper and more flexible, more commercial and less formal than court.
  • Unlike court rulings, arbitration proceedings and arbitral awards are confidential.
  • Unlike in court, there are very limited avenues for appeal of an arbitral award, which limits the duration of the dispute and any associated liability.
  • Due to the provisions of the New York Convention 1958, arbitral awards are easier to enforce in other nations than court judgments.
  • The Court of Arbitration is located at Schiphol Airport, which is easy to reach.
  • The Court of Arbitration applies UNCITRAL Arbitration Rules of the United Nations Commission on International Trade Law which meet international legal standards. The rules are concise and easy to understand, comply with current national and international legal developments, and have been published in several languages.
  • Unless parties do not agree upon otherwise, the Court will apply the neutral UNIDROIT Principles of International Commercial Contracts to judge the dispute.

More information can be found here.

The legal status of Security Tokens in Europe

This article describes the legal context in seven European countries regarding Security Token Offerings. Such offerings differ from Initial Coin Offerings (ICO’s). An Initial Coin Offering (ICO) is the cryptocurrency equivalent to an Initial Public Offering (offering shares of a private cooperation to the public for the first time, also known as IPO) in the traditional investment world.

ICO’s act as fundraisers. For example, a company looking to create a new coin or a new software application launches an ICO. Next, interested investors buy in to the offering, either with fiat currency or with preexisting digital tokens like Bitcoin. In exchange for their support, investors receive a new cryptocurrency token specific to the ICO. Investors hope that the cryptocurrency will perform very well into the future, providing them with a high return on investment. ICO’s are often used by startups to bypass the regulated capital-raising process required by venture capitalists or banks.

Unlike an ICO, a security token is essentially an investment contract into an underlying asset. It has all the attributes of a security in that it is a fungible, negotiable financial instrument that represents actual monetary value. STO’s are backed by real assets.

It is interesting to see to what extent Security Token Offerings are considered traditional security offerings from an international financial law perspective. In the table below, the most important legal characteristics are listed.

Country Are Security Token Offerings considered a security, from a legal perspective? Prospectus needed?
Austria Determined on a case-by-case basis. Yes, unless: > 100.000 EUR < 150 investors < 2 Mio. EUR total investment qualified investors
Belgium Yes, when they look and feel like securities. Yes, unless: > 100.000 EUR < 150 investors < 500.000 EUR total offer profesional investors
France Yes. Yes, unless: > 100.000 EUR < 150 investors < 8 Mio. EUR total investment qualified investors
Germany Yes, when they look and feel like securities. Yes, unless: > 100.000 < 150 investors < 8 Mio. EUR total investment qualified investors
Switzerland Yes, called “asset token”. No.
The Netherlands Yes, when they look and feel like securities. Yes, unless: > 100.000 EUR < 150 investors < 5 Mio. EUR total investment qualified investors
United Kingdom Yes, see Guidance on Cryptoassets Consultation Paper. Yes, unless: > 100.000 EUR < 150 investors < 8 Mio. GBP total investment qualified investors


Crypto law differs among jurisdictions and certain countries offer more possibilities than others. Running into legal issues is easy, considering the complexity of the new digital laws. Properly drafted and constructed documents are an important part of running a business or structuring any offering. It is crucial to have a specialised lawyer provide you with the documents you need for business operations and fundraising. This includes documents like a private placement memorandum, token sales documents, and miscellaneous offering documents. These documents help not only to ensure compliance with any cryptocurrency law and governmental regulations, but to instill credibility in your project and confidence that your investors are protected.

Important link

Getting Haiti back in the saddle

Goal of the article

In 2017, Professor Michael E. Porter of Harvard Business School gave an important presentation about a strategy for restoring Haiti’s prosperity. A crucial part of his advice is to “make attracting foreign investment a core strategy“. In this article I will provide a suggestion to implement such a strategy.

The causes of Haiti’s poverty

Poverty in Haiti affects its people in many aspects of everyday life, including housing, nutrition, education, healthcare, infant mortality rates, as well as environment. Haiti has constantly been plagued with low levels of living conditions, with many Haitians moving into the capital city of Port-au-Prince in a bid to escape poverty in the more rural areas of the country. Levels of poverty in Haiti are generally regarded as among the most severe in the western hemisphere. This short article describes the origin of Haiti’s poverty and provides a solution to get the country back in the saddle.

French extortion for re-enslaving

An important cause of this poverty is the debt they ‘owed’ to France after fighting for their independence; France demanded a payment of 150 million francs ($20 billion dollars) as ‘compensation’ for the profit they lost when Haitians freed themselves from slavery on plantations producing coffee and sugar. Most of this was still being paid until 1947.

The United States stealing Haiti’s gold

On July 28, 1915, United States Marines landed in Haiti on the orders of President Woodrow Wilson, who feared that European interests might reduce American commercial and political influence in Haiti, and in the region surrounding the Panama Canal. The precipitating event was the assassination of the Haitian President, Jean Vilbrun Guillaume Sam, but United States interests in Haiti went back as far as the previous century: president Andrew Johnson wanted to annex both Haiti and the Dominican Republic. Twenty years later, Secretary of State James Blaine unsuccessfully tried to obtain Môle-Saint-Nicolas, a northern Haitian settlement, for a naval base. By 1915, the Americans were also afraid that an ongoing debt Haiti was forced to pay to France tied the country too closely to its former colonizer; Germany’s growing commercial interests in Haiti were another major concern. So one of the first actions carried out by the United States at the start of the occupation was to move Haiti’s financial reserves to the United States and then rewrite its Constitution to give foreigners land-owning rights.

During the nineteen years of the United States occupation, fifteen thousand Haitians were killed. Any resistance to the centralized, United States-installed puppet governments was crushed, and a gendarmerie—a combination of army and police, modelled after an occupation force—was created to replace the Marines after they left. Although United States troops officially pulled out of Haiti in 1934, the United States exerted some control over Haiti’s finances until 1947.

Stealing by the Duvalier family

From 1957 to 1986 Haiti was ruled by the corrupt and oppressive Duvalier family. Loans incurred during this period alone were estimated to account for approximately 40% of Haiti’s debt in 2000, before debt relief was granted. These funds were used to strengthen the Duvaliers’ control over Haiti and for various fraudulent schemes. Large amounts were simply stolen by the Duvaliers.

New loans

With the devastating effects of the early 2010 earthquake in Haiti there came renewed calls for a further debt cancellation from civil society groups. In light of the tragedy and new borrowing that lifted Haiti’s debts back to $1.25 billion, groups such as the Jubilee Debt Campaign called for this debt to be dropped. Furthermore, during the aftermath emergency money was offered to the Haitian government from the IMF in the form of loans. Civil society groups protested the offer of loans and not grants for such an already heavily indebted country trying to cope with such destruction. 

On 28 May 2010, the World Bank announced it had waived Haiti’s remaining debts to the bank. The value of the waiver was only $36 million.

In 2015, France forgave only about US $77 million in a modern debt, unrelated to independence. In 2004, the Haitian government demanded that France repay Haiti for the millions of dollars paid between 1825 and 1947 as compensation for the slaves’ freedom. In 2015, the French government rejected this plan and said that it would consider investing in the country.


The Battle of Vertières on the island of Haiti on 18 November 1803 was the final event that stood between slavery liberty in Saint-Domingue. It involved forces made up of former enslaved people on the one hand, and Napoleon’s French expeditionary forces (who were openly committed to re-enslave the former enslaved people and regain control of the island) on the other hand. The result was that Napoleon’s troops pulled back from Vertières, knowing they were defeated and that Haiti was lost to France.

Because Napoleon had failed to re-enslave Haiti he was missing the plantation revenues. As war with England was inevitable and he could not raise enough assets, Napoleon abandoned his colonial policy. France’ immense territory of Louisiana was sold to the United States on 30 April 1803 by means of the Louisiana Purchase Treaty. It was the birth of what now is considered the most powerful nation in the world, as Livingston made clear in his famous statement: “We have lived long, but this is the noblest work of our whole lives…From this day the United States take their place among the powers of the first rank.”

The West still profits from the international political and economic role that the United States plays in the world. The country contributes to world peace and has liberated Europe twice from German dominance. However, until now, the West has only contributed to Haiti’s poverty. It is my opinion that not much can be expected from the West and that Haiti needs to take into account that it needs to get back on its feet without or with minimal foreign aid.


In order to restore Haiti to its former glory, I suggest the following.

  • As France has suggested it would invest in Haiti, a way of doing so would be to implement access to internet all over the country, so Haitians can have access to the open education platforms of e.g. Coursera. The French government could also fund a liaison office of the Institut européen d’administration des affaires (INSEAD) in Haiti that provides open education. INSEAD prides itself that it offers participants a global educational experience. With campuses in Europe (France), Asia (Singapore) and Middle East (Abu Dhabi), and alliances with top institutions, INSEAD’s business education and research spans around the globe. Our 150 renowned faculty members from 40 countries inspire more than 1,400 students in our degree and PhD programmes. In addition, more than 11,000 executives participate in INSEAD’s executive education programmes each year. I see INSEAD as an institution that can provide an ideal impuls to develop the level of education that Haiti needs to become an emerging market.
  • A very important step to taken, is the implementation of Blockchain technology in a new (to be developed) Haitian offshore banking sector. There are offshore jurisdictions that are working to attract Crypto banks. As an example, Puerto Rico just issued a license for a Cryptocurrency International Financial Entity (Puerto Rico’s version of a banking license). Dominica is also active in the issuance of quality offshore banking licenses and makes allowances for cryptocurrency. 
  • In addition, a number of open-sourced groups have been formed to increase the availability of blockchain technology for offshore banks. For example, the Enterprise Ethereum Alliance became the world’s largest open-source blockchain initiative on July 18, 2017. With members like MasterCard, Cisco and Scotiabank, I have high hopes for this team.
  • A new Companies Act should be drafted, with input from the industry’s stakeholders. Such an act should eliminate the complex and cumbersome approach to formation and operation of companies. A well-functioning Companies Registry to compliment these new laws should eventually provide affordable accessibility to the company law. Ultimately, a significant reduction in the overall cost of doing business in Haiti should be the direct result.
  • With technical aid from the International Monetary Fund, a new International Banking Act should be passed to regulate and supervise all offshore licensed banks. This ensures protection of depositor’s assets and sound banking practice and qualified management are in place.
  • A Mutual Assistance in Criminal Matters Act is needed. The aim is to regulate the provision by Haiti of international assistance in criminal matters in the prevention of Money Laundering of proceeds from criminal activities and terrorist funding.
  • A new Insurance Act is needed to provide for the licensing, regulation and supervision of insurance business. This is to promote the maintenance of efficient, fair, safe and stable insurance markets for the benefit and protection of policyholders.
  • Providers of company and trust services must apply for a license to offer such services and to be regulated with a system that sets out their legal obligations as license holders. This ultimately protects users of financial products and further enhances the reputation as a finance centre.
  • A new Companies Act should provide the courts with as much direction as possible to allow them to continue to make decisions on company law. The underlying objective of this is to reduce gaps and grey areas in the legal system.
  • The promise this proposed law is holding out is to ultimately remove the expensive, time consuming and protracted process of incorporating a company. The approach to this is to replace the traditional Memorandum and Articles of Association with a straight forward Application Form. The Application Form will contain the essential information required by the Registrar of Companies to satisfy himself prior to accepting or declining the application to incorporate a company.
  • Part of this shift is to introduce a set of “Model Rules”. This replaces the traditional Memorandum and Articles of Association which only serves the legally trained. The Model Rules is essentially the internal governance rules which apply to the company and by which the company operates on a daily basis. Logically therefore, the Model Rules cover such things as appointments of directors, removal and powers of officers, meeting procedures, shareholders rights and so forth. In line with the Act’s objective to reduce costs and achieve simplicity, Model Rules will be attached as schedules to the required Act. There will be no need to get the Model Rules prepared professionally. And the Model Rules will provide both directors and shareholders with guidance for the management of the company. All types of company: private, public, single shareholder and community will be covered by the Model Rules which can be amended to meet specific needs of the company.


  • Porter, Michael E. “A Strategy for Haitian Prosperity.” (pdf) In Keynote Presentation. Paper presented at the Forum on Competitiveness and Investment, Port-au-Prince, Haiti, September 22, 2017
  • “World Bank cancels Haiti’s debt”. AFP. 29 May 2010. 
  • Wroughton, Lesley (28 May 2010). “World Bank cancels remaining Haiti debt”. Reuters. 
  • “Hollande pledges Haiti investment”. BBC News. 2015-05-13. 
  • “France Confirms Will Not Repay Haiti ‘Independence Debt'”. TelesurTV. 12 May 2015. 
  • Wikipedia

The myth of the financialization of the housing market


In February 2017, mrs Leilani Farha, the United Nations’ special rapporteur for housing, presented a paper on housing commoditisation to the UN human rights council in Geneva. The paper explains how an unregulated financial market has boosted housing prices to a level that excludes low-income households from certain attractive urban locations and created social inequality. Mrs Farha introduces the term ‘financialization of the housing market’. This article explains that execution of the ideas of mrs Farha will not lead to lesser social inequality. Other measures need to be taken rapidly.

What is meant by financialization of the housing market?

Global investment firms are looking for so called high-quality collateral investments, and housing is one of the asset classes that can be classified as such, together with US, German and Swiss government securities. This explains why housing is increasingly becoming financialized or subject to financial speculation. I would describe financialization in this respect as the increasing dominance of financial actors, markets, practices and measurements of the housing market. Thus, housing is disconnected from its social function and is part of an investment strategy.

Financial markets and housing prices

Stock markets and home building are leading economic indicators. The precise relationship is not known, but it can be observed that the housing sector influences the economy. When the stock market goes down, most portfolios loose money. The net worth of investors declines and so will their willingness to invest. Investors will also be influenced in their behaviour from a psychological perspective. In addition, contractors and their sub-contractors (plumbers, electricians, et cetera) are all dependent on housing. They will loose buying power, which influences other sectors as well.

Purposes of financial markets in general

Generally, the purpose of the financial (capital and money) markets is threefold: (1) raising money for new ventures (a small portion of the stock markets’ activity); (2) providing liquidity, so the investors and therefore contributors to the value of a company can cash in on their efforts and (3) allocating capital effectively, by setting the prices of the financial instruments. Stock markets all over the world list real estate companies.

Fundamental economic problems

One major economic “problem” is that the development of financial markets cannot be predicted. This is explained by the fact that it is too complex to specify all the original information and derivation rules that make up the price of financial instruments. Jeff Stibel (2009) explains this in the following manner:

The future, like any complex problem, has far too many variables to be predicted. Quantitative models, historical models, even psychic models have all been tried — and have all failed. Just imagine predicting something far simpler than the future of the stock market; say, chess. There are an overwhelming 10 to the 120th power possible moves. That’s a 1 followed by 120 zeros! As James Hogan explains it in his book Mind Matters, that sum far exceeds the number of atoms in the universe.

The same counts for housing prices. It is even hard to look back and compare housing prices in the past. Price alone is a misleading way to evaluate the performance of residential real estate. Those who fail to do additional analysis are likely to overestimate the attractiveness of housing as an investment. The only data available in this respect is Robert Shiller’s historical housing index (adjust for the significant increase in the size and quality of homes). To evaluate real estate as an investment, it is needed to consider the total impact that the purchase of the home has on the buyer’s finances. That is, incorporate all of the net additional expenditures (like interest, taxes, insurance and buying/selling costs) associated with the purchase.

The impact of time on the return of a real estate investment is often underestimated. In a 30-years time frame, in increase in price from EUR/USD 50.000 to 300.000 represents an annual growth rate of about 6.2%. The impact of time on the return on their housing investment is often under estimated. It should be stressed that this includes price increase with adjustment for inflation only. The average annual home price increase in the United States over a period of 100 years was about the same as the inflation rate.

Final thoughts

There is no such thing as a boost in housing prices over the years. Long-term housing prices are comparable to the inflation rate. They are not artificially kept high due to speculation. Houses are priced based on demand and availability. This does not mean that the government should not put an enormous effort into ensuring that everyone, irrespective of income or access to economic resources, has access to a safe, secure, habitable, and affordable home with protection from forced eviction.

The right to housing is a human right, protected by a number of fundamental declarations: Article 25 of the Universal Declaration of Human Rights; Article 11 of the International Covenant on Economic, Social and Cultural Rights; Article 27 of the Convention on the Rights of the Child; Article 5 of the Convention on the Elimination of All Forms of Racial Discrimination; Article 14 of the Convention on the Elimination of All Forms of Discrimination Against Women and Article XI (11) of the American Declaration on Rights and Duties of Man.

In my opinion, a governmental effort to reduce the so called financialization of the housing market is not an option to improve housing conditions for lower income households. It will lead to a housing bubble, since the market mechanism is artificially removed and prices do not reflect the real value of houses. In my opinion the only way to lower housing prices is to lower demand for housing. I cannot understand why it is not understood that reducing the human population is the most effective tool to combat poverty and inequality. As Paul Ehrlich, Bing professor of population studies at Stanford University in California and author of the best-selling book, the Population Bomb, in an interview with the Guardian (26 April 2012) says:

The optimum population of Earth – enough to guarantee the minimal physical ingredients of a decent life to everyone – was 1.5 to 2 billion people rather than the 7 billion who are alive today or the 9 billion expected in 2050.

We should not let mrs Leilani Farha’s ideas influence us, because they lead to a myopia. The focus should be on the factors that really can be influenced and make a substantial difference in fighting poverty.


Aalbers, M. (2016). The financialization of housing: a political economy approach. London: Routledge Taylor & Francis Group.

Ehrlich, P. R. (1975). The population bomb. Rivercity, MA: Rivercity Press.

Malthus, T. R. (2017). Essay on the principle of population. New York: W W Norton.

Shiller, R. J. (2016). Irrational exuberance. Princeton, NJ: Princeton University Press.

Stibel, J. (2009). Why We Can’t Predict Financial Markets. Boston, MA: Harvard Business Review.

Statistical sources

Eurostat, House Price Indices euro area and EU aggregates Index levels 2015 100 2017Q1

International Monetary Fund, Global Housing Watch

S&P CoreLogic Case-Shiller Home Price Indices

De factuur fiscaal bezien

Het komt voor dat de belastingdienst de aftrek van BTW in facturen weigert. Met name als het om grotere bedragen gaat. Het verwijt dat de ondernemer dan wordt gemaakt is dat de omvang en aard van de werkzaamheden niet is vast te stellen. Wat zegt het internationale recht over de inhoud van de factuur?

BTW-aftrek mag in beginsel niet worden geweigerd

In de zaak ECLI:EU:C:2016:690 en 101 bevestigt het Hof van Justitie EU dat het herhaaldelijk heeft geoordeeld dat het recht op btw-aftrek waarin de artikelen 167 en volgende van richtlijn 2006/112 voorzien, een integrerend deel van de btw-regeling is en, in beginsel, niet kan worden beperkt. Het wordt onmiddellijk uitgeoefend voor alle belasting die op in eerdere stadia verrichte handelingen heeft gedrukt (zie in die zin arrest van 13 februari 2014, Maks Pen, C 18/13, EU:C:2014:69, punt 24 en aldaar aangehaalde rechtspraak).

De aftrekregeling heeft tot doel de ondernemer geheel te ontlasten van de in het kader van al zijn economische activiteiten verschuldigde of betaalde btw. Het gemeenschappelijke btw-stelsel waarborgt bijgevolg een neutrale fiscale belasting van alle economische activiteiten, ongeacht de doelstellingen of resultaten van deze activiteiten, mits deze activiteiten in beginsel zelf aan de btw zijn onderworpen (arrest van 22 oktober 2015, PPUH Stehcemp, C 277/14, EU:C:2015:719, punt 27 en aldaar aangehaalde rechtspraak).

De materiële voorwaarden waaraan moet zijn voldaan opdat het recht op btw-aftrek ontstaat, volgen uit artikel 168, onder a), van richtlijn 2006/211 dat de goederen of diensten waarvoor op dat recht aanspraak wordt gemaakt, door de belastingplichtige in een later stadium moeten zijn gebruikt voor zijn eigen belaste handelingen en in een eerder stadium door een andere belastingplichtige moeten zijn geleverd of verricht (zie in die zin arrest van 22 oktober 2015, PPUH Stehcemp, C 277/14, EU:C:2015:719, punt 28 en aldaar aangehaalde rechtspraak).

Wat de formele voorwaarden voor de uitoefening van dit recht betreft, volgt uit artikel 178, onder a), van richtlijn 2006/112 dat de belastingplichtige in het bezit moet zijn van een overeenkomstig artikel 226 van deze richtlijn opgestelde factuur (zie in die zin arresten van 1 maart 2012, Kopalnia Odkrywkowa Polski Trawertyn P. Granatowicz, M. Wąsiewicz, C 280/10, EU:C:2012:107, punt 41, en 22 oktober 2015, PPUH Stehcemp, C 277/14, EU:C:2015:719, punt 29).

Het Hof heeft geoordeeld dat het basisbeginsel van neutraliteit van de btw verlangt dat aftrek van voorbelasting wordt toegestaan indien de materiële voorwaarden daartoe zijn vervuld, ook wanneer een belastingplichtige niet voldoet aan bepaalde formele voorwaarden. Wanneer de belastingdienst over de nodige gegevens beschikt om vast te stellen dat is voldaan aan de materiële voorwaarden, mag hij bijgevolg voor het recht van de belastingplichtige op aftrek van die belasting geen nadere voorwaarden stellen die tot gevolg kunnen hebben dat de uitoefening van dat recht wordt verhinderd (zie in die zin arresten van 21 oktober 2010, Nidera Handelscompagnie, C 385/09, EU:C:2010:627, punt 42; 1 maart 2012, Kopalnia Odkrywkowa Polski Trawertyn P. Granatowicz, M. Wąsiewicz, C 280/10, EU:C:2012:107, punt 43, en 9 juli 2015, Salomie en Oltean, C 183/14, EU:C:2015:454, punten 58 en 59 en aldaar aangehaalde rechtspraak).

Daarom mag de belastingdienst het recht op btw-aftrek niet weigeren enkel en alleen omdat een factuur niet voldoet aan de door artikel 226, punten 6 en 7, gestelde voorwaarden indien hij beschikt over alle gegevens die nodig zijn om na te gaan of is voldaan aan de materiële voorwaarden voor uitoefening van dat recht.

In dit verband mag de belastingdienst zich niet ertoe beperken de factuur zelf te onderzoeken. Hij moet bovendien rekening houden met aanvullende informatie die de belastingplichtige verstrekt. Deze stelling vindt steun in artikel 219 van richtlijn 2006/112, dat ieder document of bericht dat wijzigingen aanbrengt in en specifiek en ondubbelzinnig verwijst naar de oorspronkelijke factuur, met een factuur gelijkstelt.

De economische realiteit

Het HvJ EU overweegt in de zaak Paul Newey (HvJ EU 20 juni 2013, nr. C-653/11, BNB 2014/49) in de eerste plaats dat het begrip dienst een objectief begrip is dat onafhankelijk van het oogmerk of het resultaat van de rechtshandelingen wordt toegepast. Vervolgens overweegt het Hof in genoemde zaak dat contractuele bepalingen normaliter de economische realiteit weergeven en – mede omwille van de rechtszekerheid – een in aanmerking te nemen factor vormen. Een afwijking van de contractuele bepalingen is echter mogelijk als sprake is van een zuiver kunstmatige constructie die niet beantwoordt aan de economische realiteit en alleen is bedoeld om een belastingvoordeel te verkrijgen. De nationale rechter dient – op basis van een globale beoordeling van de omstandigheden – na te gaan wie de daadwerkelijke ontvanger van een dienst is. De contractuele bepalingen vormen daarbij een in aanmerking te nemen, maar niet de doorslaggevende factor.

Aard en omvang van de geleverde diensten

Een factuur die bij wijze van vermelding van de aard van een dienst slechts de omschrijving als bijvoorbeeld ‚juridische dienstverlening’ bevat, voldoet aan de eisen van artikel 226, punt 6, van richtlijn 2006/112/EG (2016:101, r.o 102 onder 1).

De factuur is onder meer bedoeld om te kunnen controleren of de opsteller van de factuur de juiste belasting heeft voldaan. Daartoe moet – naast voornoemde omschrijving – ook de datum bekend zijn waarop een dienst is verricht. Het is namelijk deze datum – en niet bijvoorbeeld de datum van uitreiking van de factuur – die volgens artikel 63 van de btw-richtlijn in beginsel bepaalt wanneer het belastbare feit in de zin van artikel 62, lid 1, van deze richtlijn heeft plaatsgevonden, en daarmee ook welke belastingvoorschriften ratione temporis op die handeling van toepassing zijn (2016:101, r.o 68).

Kortom, vermeld op een factuur duidelijk waar het om gaat en wanneer de prestaties zijn verricht.

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