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Dutch Holding Company

Dutch Holding Company

The Dutch Holding Company is a company that has enough stocks in another company (subsidiary) to manage this company’s actions. Its only purpose is to hold shares in the respective company or companies.Our lawyers in Netherlands can guide you through the requirements, documentation, procedure and taxation, regarding opening a Dutch holding company.

Requirements for opening a Dutch holding company

A Dutch holding company may be established as a private limited liability company or as a public limited liability company, depending on the client’s preference. For incorporating a private limited liability holding company a minimum share capital of 18,000 Euros must be deposited in a bank account, unlike the minimum share capital of a public limited holding company: 45,000 Euros.

The main reason the Dutch holding companies are preferred is the applicable fiscal policy. Holland offers an appealing tax regime mainly because of its numerous Double Taxation Avoidance Agreements signed with other countries. If ever in need of legal consultancy or assistance in other European countries, our clients can always rely on our partners lawyers in Cyprus or attorneys in Belgium.

Quick Facts
Legal entities used

Private limited company (BV) in most cases

Incorporation method

As per the Dutch company formation rules; registered with the Commercial Register

Incorporation time

Approximately 1 week

Easy incorporation in the Netherlands

Reduced risk

Various tax addvantages related to the taxation of the holding, when certain criteria are met

Precautions Minimum shareholding is needed in the operating company in order for the holding to benefit from certain advantages
Shareholding structure

Typically, the holding company (a Dutch BV) will own shares in another legal entity (which can be another Dutch BV)

Minimum Capital

€0.01 starting capital for the BV

Taxation 15% on the first EUR 245,000 of taxable profits and 25% afterwards
A participation exemption applies to income derived from shareholdings of at least 5%, under certain conditions
Control The founder of the Dutch BV privately owns shares in the holding
Accounting and Reporting Annual financial statements. Filing and payment usually takes place five months after the end of the fiscal year.
Holdings (parent companies) can form a fiscal unity with one or more operating companies (subsidiaries).
Number of double taxation treaties > 100
Structure of a holding company

– holding company (central entity in the structure),

– operating companies (companies where day-to-day business activities take place)

General steps of opening a Dutch holding company

– firstly set up the holding BV,

– set up the operating company,

– assign shares of holding into operating company

Participation exemption characteristics

Allows Dutch companies to avoid paying tax on profits when they own at least 5% of another company’s shares and meet certain conditions;

Our lawyers can explain this in more detail.

Company name requirements

Terms like “holding company” are not required to be included in the statutory or company name.

Address requirements

The holding company and operating company can share the same business address, or use different ones.

Bank account required (YES/NO)


Hiring employees

Might affect the overall tax and legal structure of the holding company;

It is advisable to contact our attorneys in this matter.

Withholding tax on dividends (YES/NO)


Restrictions on currencies (YES/NO)


Upgrading from BV to BV holding company

We recommend setting up the holding BV right away, as adding it later involves transferring shares, and potentially higher costs.

Liquidation of a Dutch holding company

Follows standard procedures applicable to other types of companies in the Netherlands.

Fiscal unity requirements

– 95% ownership by parent company,

– 95% profit and asset entitlement,

– 95% voting rights,

– meet specific legal and location criteria.

VAT registration in Netherlands

Depends on the specific business activities.

Remote assistance

Our Dutch lawyers can help you set up a holding company remotely.

Additional services by our law firm in Netherlands


– tax advice and planning,

– litigation,

– employment and labor,

– real estate,

– intellectual property, etc.

Usually no withholding tax is applicable on the dividends. The share sale of the holding company in Holland doesn’t provide capital profits in the subsidiary’s country.

The holding company may operate in other foreign currency, there are no constraints regarding this.

The participation exemption is another major reason why Dutch holding companies are created. In case the principles of the participation exemption are applied, then the company may not be subject to any kind of taxation.

The main conditions a holding company must comply are: the subsidiary is taxed in the country of origin, the Dutch holding company must own at least 5% of the paid up share capital of the subsidiary, the subsidiary’s shareholders are standing and actual and the holding company must have an actual owner.

If the first condition of owning at least 5% from the paid up share capital is not respected, the holding company may be tax exempted but only it have the same type of business as the rest of the holdings and if it is a strategic company.

As a result of the participation exemption the costs in relation to the subsidiary are recoverable. Excepting the liquidation losses, the subsidiary’s losses are not recoverable.

Double tax treaties were signed by Netherlands with more than 100 countries so special policy is also applied to the holding companies in Netherlands. Here are some of the benefits: the decrease of the withholding tax on dividends in the subsidiary’s country of residence, the prevention of dual residency and permanent headquarters, cut of withholding tax rates for other sources of revenue.

The liquidation of a Dutch holding company is no different than the liquidation of a private limited liability company or public limited liability company.

Steps of opening a Dutch holding company

When starting a Dutch holding company, one of the initial decisions to make is selecting the appropriate business form. In the Netherlands, common options for a holding company include:

The choice of business form depends on factors such as the nature of the business and the specific objectives of the holding company. Our Dutch lawyers can help you choose the appropriate business structure.

In most cases, the Dutch BV will be the type of company under which the holding company will be incorporated. This business entity type is easy to incorporate and it is the Dutch equivalent of the private limited liability company.

If you opt to use a BV as your holding company, it’s crucial to consider the standard company formation timeline. The process for incorporating a Dutch BV, even when it’s intended to function as a holding company, typically follows the standard procedures and legal requirements associated with BV formation.

For a BV to be properly established and chosen as a Dutch holding company, it must have a minimum of one director, who must be a natural person and reside in the Netherlands, along with at least one shareholder. The required minimum capital for its establishment is EUR 0.01. Details of both the manager and shareholders are publicly recorded, and the company cannot issue bearer shares. It can only issue registered shares, and the transfer of shares is subject to restrictions, not allowing for unrestricted transfer. A BV needs to have a registered office in the country and needs to be registered with the Chamber of Commerce and the Tax Office. Another important advantage when setting up this type of company is that the accounting requirements will be the same as those applicable to the BV.

Wecan help you open a BV if you choose this kind of structure, and also assist with the VAT registration in Netherlands, if your company sells goods or services.

It is important to remember that a Dutch holding company is used to hold shares or other assets. It’s a way of structuring a company to manage ownership interests in other companies or assets. After successfully incorporating the holding company, you transfer the shares of any subsidiary companies to the Dutch holding company. This step allows the holding company to centralize control and management over these subsidiary companies.  

It is advised to consult with our law firm in Netherlands to ensure compliance with Dutch company laws and regulations when executing such transfers.

Taxation principles for holding companies in the Netherlands

The following features are the ones that define the taxation of a Dutch holding company:

  • the participation exemption: a holding company can be tax exempt on qualifying holdings (detailed below).
  • tax reduction: when the participation exemption applies, the expenses related to subsidiaries can generally be deductible.
  • no substance requirements: a Dutch holding company does not impose substance requirements and the company does not need to have employees.
  • no withholding tax rate on dividends: the dividend payments made to a Dutch holding company by an EU subsidiary are under the EU Parent-Subsidiary Directive.
  • no currency exchange restrictions: this company is not subject to restrictions for receiving income in the Netherlands or repatriating funds from the Netherlands; some reporting requirements do apply and one of our taxation lawyers in the Netherlands can give you more details.

The participation exemption applies to holding companies in that although a Dutch company operating as a holding (under the form of a BV, for example) is subject to corporate income tax on its worldwide income, all of the benefits that can arise from a qualifying shareholdings are exempt from the corporate income tax at the shareholder’s level, whereas the shareholder is a Dutch resident company for taxation purposes. The participation exemption is designed to allow for the prevention of double corporate tax on income for a given company. The conditions for a qualifying shareholding are for the parent company to hold a participation of at least 5% and for the company to meet one of the three types of tests: the motive test, the asset test, the subject-to-tax test. One of our taxation lawyers in the Netherlands can give you complete information about these. They can also give you details about the numerous Netherlands double tax treaties; these are agreements between Netherlands and other countries for the avoidance of double taxation.

A Dutch tax calculator can be a valuable tool for initial tax planning and assessment of your holding company’s tax implications. We can provide this service to you if you are interested.

Benefits of opening a Dutch holding company

One of the primary benefits of a holding company structure is the ability to spread risk. By having a holding company in Netherlands that owns subsidiary operating companies, the risk associated with each subsidiary is separated, which can protect the overall business from the potential financial difficulties of one subsidiary.

It is important to note that a holding company structure makes it generally easier to transfer or sell parts of the business. This flexibility can be advantageous if the business owner wants to divest certain assets or divisions while retaining others.

The profit generated by the operating company can be transferred to the holding company in Netherlands without incurring additional taxes. This is due to the participation exemption in Dutch tax law. In essence, only the operating company is responsible for paying taxes on its profit, not the holding company. Our attorneys in Netherlands can explain more tax benefits associated with holding companies.

The Dutch holding company can be successfully be used as a manner of extracting the profits of subsidiaries. The Netherlands is a country that offers not only an advantageous tax regime but also a good business environment, credibility and easy access to important surrounding EU markets.

While the Dutch holding company is not subject to value-added tax as it does not provide goods or services, our team is also able to answer questions about Netherlands VAT registration for other types of companies. This is a mandatory step for all companies that produce and distribute goods, and it has varying rates according to the type of goods or services offered by the company.

Useful statistics for opening a Dutch holding company

If you are thinking of opening a Dutch holding company, these statistics might be useful, as they reflect the country’s attractiveness to international investors and businesses:

  • In the second quarter of 2023, Foreign Direct Investment (FDI) in the Netherlands increased by 8,879 million euros;
  • The average FDI from 2003 to 2023 was approximately 29,558.20 million euros per quarter;
  • In 2022, the GDP was evaluated at approximately 1,010.19 billion U.S. dollars;
  • The service sector was the largest contributor, making up about 68.84% of the Netherlands’ GDP.

Our team of lawyers can help you set up a holding company or any other type of company in Netherlands. Also, company formation in Cyprus is a service we strongly recommend for entrepreneurs willing to invest in this country. You can contact our Dutch law firm for any type of legal assistance in company formation.