COMPANY FORMATION IN THE NETHERLANDS
The Netherlands has long been a favorite home for foreign investors. It has a stable and successful economy and a trade and investment policy that’s one of the most open in the world
Dutch company key features
The main advantages are:
Attractive holding regime
Attractive financing/licensing regime
0% withholding tax on interests and royalties
Structuring possibilities for reduction of corporate tax rate (20/25%) or dividend withholding tax (15%)
Advanced Tax ruling practice
Extensive tax treaties network
Popular Dutch company applications
DUTCH BV AS HOLDING COMPANY
For a long time The Netherlands have been acknowledged as Preferred Holding Jurisdiction as they grasped the idea of elimination of the double taxation on investment profits and implemented a „participation exemption” or holding regime.
No minimum holding period
No corporate tax on dividends arrived to Dutch holding company
Capital gains on sale of shares are not taxed.
Participation Exemption applies if:
Dutch Holding Company holds at least 5% of subsidiary’s shares, AND
Subsidiary is a trading company or subsidiary is not held as a portfolio investment
OR, Subsidiary is subject to “tax test” – f.e. standard corporate tax rate is at least 10%
OR, Subsidiary is subject to “asset test” – passive assets must be less than 50%
Netherland company taxation
CORPORATE INCOME TAX (CIT): The standard rate is 25% (or 20% on taxable profit up to EUR 200,000.) With Advanced Tax Ruling effective CIT rate can be brought down to 5%.
INCOMING DIVIDENDS: 0% if Participation Exemption applies.
CAPITAL GAINS TAX (CGT) 0% if Participation Exemption applies.
ROYALTIES: No withholding tax on royalties.
DIVIDENDS: 0% under EU Parent Subsidiary Directive and/or when participation exemption applies. Withholding tax rate on dividends paid to non-EU entities is 15% unless reduced by the treaty.
INTERESTS: No withholding tax on interests.
VALUE ADDED TAX (VAT). EU VAT regime. Standard rate for inland sales is 21%.
How to register a company in the Netherlands?
- Choose a structure, what is appropriate for your business. Need help? Contact us.
- To find out more, please contact us.