Holding companies in the Netherlands

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Holding companies in the Netherlands.

What are they and why should you consider one?

When it comes to holding companies, the Netherlands has grown into a worldwide reference. From billion-dollar multinationals and major family offices to innovative operators and ambitious start-ups; the Netherlands offers unrivalled infrastructure and benefits in terms of a private limited company and holding company set-ups. The possibilities and advantages of a Dutch holding company will be discussed in this blog/article. We will also compare a Dutch holding company set up with other jurisdictions like Poland and Germany.

What is a holding company in the Netherlands?

A holding company in the Netherlands is a company located in the Netherlands that has no commercial activities of its own. Instead, it forms an umbrella for a number of other companies, which is why it is sometimes referred to as a controlling or managing company. These holdings are usually private limited companies (“Besloten vennootschappen” or BV’s in Dutch) that consist of two parts: the holding company in the Netherlands itself plus one or more operational companies.

Advantages of a holding company in general.

Depending on your current company structure and objectives, a holding in the Netherlands comes with a series of considerable advantages, both general and specifically related to its location in the Netherlands. We will start by listing some of the major general advantages of setting up a holding company for your commercial operations.

  • Spreading the risk.
    Seeing as your holding would hold your participation in one or more operation companies, it’s also the owner of these companies. In a simplified presentation, the operational companies would be used to conduct daily activities and operations, such as product manufacturing or service provision, while the holding company would be used to manage and hold profits, pensions, and fixed assets, for example. In case of serious problems like the bankruptcy of one or more of the operational companies within your holding structure, this helps you protect your most valuable assets.

    The holding company offers the possibility to distribute funds out of a company without it needing to leave the concern and enter the private equity of the shareholder(s). This is important when a bankruptcy would emerge because the distribution would be out of the bankrupt company. Distribution to a holding company could be tax-exempt, while distribution to an individual would always lead to taxation.

  • Fiscal benefits.
    As we briefly explained earlier, a typical holding structure consists of a holding company and at least one operating company. This opens the doors to a potentially very interesting fiscal position, on condition that the holding owns at least 95% of the operating company or companies. If this is the case, you can create a so-called fiscal unit in which the profits and losses of the companies in question can be settled among each other. The optimal settlement this way can result in considerable tax benefits (more about this later).

  • Adjustment of corporate structure.
    Another big advantage of a correctly set up and managed holding structure is that its structure is easy to adjust when and where necessary. Assets can easily be transferred between the related companies and the same goes for the sale of such assets. Imagine, for example, the sale of an operating company for which you only want to monetise the shares and not its corporate real estate. A holding structure allows you to easily transfer the real estate** to another part of your holding structure while selling the shares in question.
    **(could result in 10,4% transfer tax if real estate is involved, but that totally depends on facts and circumstances)

Advantages of a holding company in the Netherlands.

Chances are that you were already familiar with the advantages of setting up a holding structure in general. Maybe you even already have some (or a lot) of experience with holding structures. The main question here though is why you should consider setting up a holding company in the Netherlands, especially with other jurisdictions in Europe like Germany and Poland offering decent options as well.

  • In and around the European Union, there are several jurisdictions that have the ambition to become the region’s go-to country for international holding registrations. At the moment of writing though, it’s the Netherlands that is known as the Western European alternative with a solid reputation. It is and has been for centuries a global trading hub, which in part has led to the many tax treaties the country currently has with dozens of important economies around the world. As a result, many of the world’s largest corporations have established their headquarters in the Netherlands, including the likes of Phillips, Heineken, Netflix, Cisco and Booking.com

  • English literacy levels in the Netherlands are amongst the highest in the world for countries where English is not an official language. According to the European Union, between 90% and 93% of all inhabitants speak English as a second language, which is higher than in any other major economy in Western Europe.

  • The Netherlands boasts a very stable economy and several major positives in relation to that fact, including a highly qualified labour force, an excellent geographical position in the heart of Europe with direct access to the sea and a focus on the services sector.

  • As a result of all of the above and more, the Netherlands is also part of a multitude of tax agreements with lots of interesting jurisdictions, including the United Kingdom, the United Arab Emirates and the United States. This resolves the issue of double taxation, which is often a major issue for multinational companies.

  • A holding company is great for reinvesting funds in different daughter companies, as the distributions to the holding company can be tax-exempt and then a capital investment could take place.

  • In the Netherlands, no income tax is paid over royalties and interest, generally taxed with a 15% dividend withholding tax, unless an exemption like the Dutch participation exemption applies, in which case there is a 0% withholding tax. Please note that dividend distributions from an entity to an individual are generally taxed with 26,9% PIT in 2023. Higher tax rates (up to 31%) will apply from January 1st, 2024. Under certain circumstances though, both dividend payments and capital gains can be fully exempt from corporate net profit tax. Capital losses tend not to be subject to taxation.
    **There is a source tax on interest and royalties from certain countries that are blacklisted. Currently, tax treaty countries are exempt from this regulation, however, this will change from January 1st, 2024.
    In principle dividend distributions are subject to either:
    a) 15% dividend withholding tax (regular rate),
    b) 25,8% dividend withholding tax (special rate for blacklisted countries, will apply from January 1st, 2024) or
    c) 0% if exemptions apply. This is case-sensitive information, so it is difficult to provide general information about this.


  • For controlled foreign companies (CFCs), all undistributed income is subject to corporate tax when these companies are located in low-tax jurisdictions if the holding in the Netherlands owns at least half of the CFC. Exceptions to this rule exist though, including situations where the passive income from the CFC in question is less than 30% or when the subsidiary meets certain legal requirements.

Are you considering setting up a holding company in the Netherlands and would you like to know more about the possibilities in regard to the specific situation of your operation? Get in touch with CompanyNL, so we can discuss the optimal approach for you and your company, naturally in an entirely non-committal way!

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Pricing setting up a Dutch Holding (structure) Company

Top Holding B.V. plus one operational company B.V. underneath it.

The pricing of our services depends on the amount and type of shareholder(s) and on the time spent per incorporation. Please find an overview of our rates below.
Incorporation of your Dutch Holding B.V. is done 100% remotely, with no travelling necessary.

HOLDING (STRUCTURE) COMPANY INCORPORATION OPTIONS AND PRICING

Standard Incorporation

“No rush, but please make sure my Holding structure is
incorporated within a month.”



Timeline3
Ca. 3-4 weeks

Priority Incorporation

“I am looking for a balance between
cost-effectiveness and speed.’’



Timeline3
Ca. 2-3 weeks

Fast track Incorporation

“This is the most comfortable and fastest way to incorporate. No need to travel, and established within 7 working days 1.’’



Timeline3, 4
Within 7 working days
Urgent video call identification

1 If the shareholder is a foreign legal entity, legalized documents will still be needed.
2 Exact price depends on the number and kind of shareholders.
3 Timeline: counted from receipt of documents to incorporation date.
4 It is possible to incorporate faster. Please let us know if this is necessary.

Discount packages available:

Set up your holding structure and rent a virtual office at the same time, provided by our partners and receive a discount.

Standard Incorporation

+ Virtual office (€950 ex VAT annually, paid separately)

“No rush, but please make sure my Holding structure is
incorporated within a month.”


(€195 Discount)


Timeline3
Ca. 3-4 weeks

Priority Incorporation

+ Virtual office (€950 ex VAT annually, paid separately)

“I am looking for a balance between
cost-effectiveness and speed.’’


(€500 Discount)


Timeline3
Ca. 2-3 weeks

Fast track Incorporation

+ Virtual office (€950 ex VAT annually, paid separately)

“This is the most comfortable and fastest way to incorporate. No need to travel, and established within 7 working days 1.’’


(€995 Discount)


Timeline3, 4
Within 7 working days
Urgent video call identification

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