When establishing a company in the Netherlands, investors may choose between setting up a subsidiary or abranch. The differences between these two business forms are substantial and our team oflawyers who specialize in opening branches and subsidiaries in the Netherlands can help you determine which one suits your business needs.
| Quick Facts | |
|---|---|
| Branches in Netherlands – definition | Branches are permanent establishments established by foreign companies within the country in order to conduct their business activities without creating a separate legal entity; The branch is considered an extension of the foreign company. |
Subsidiaries in Netherlands – definition | Subsidiaries are separate legal entities, owned and controlled by the parent company with their own legal status, assets, liabilities, and operations. |
Taxation of branches and subsidiaries | – corporate income tax (19% on the initial EUR 200,000 of profit and 25.8% on any amount above that), – dividend withholding tax (15%), – withholding tax rate for interest and royalties (0%), etc. |
| VAT | – 21% (standard rate), – 9% (reduced rate for food, medicine, etc.), – 0% (goods exported from EU); Please contact our team if you are interested in VAT registration in Netherlands. |
| Liability of branches | The parent company is responsible for all the debts and responsibilities of the Dutch branch. |
| Liability of subsidiaries | The liability of a subsidiary is generally limited to its own assets and operations; The shareholders are only financially responsible for the amount of money they invested in the company’s capital. |
| Incorporation of branches | Opening a branch involves presenting the foreign company’s existing Articles of Incorporation and the decision to establish the Dutch branch, and registering with the Trade Registry and Chamber of Commerce; Our Dutch lawyers can help. |
| Incorporation of subsidiaries | Opening a subsidiary involves drafting new Articles of Association; Registration with the Trade Registry and Chamber of Commerce is still mandatory. |
| Double taxation agreements | Subsidiaries have access to double taxation treaties, unlike branches, with a few exceptions. |
| Accounting | Both branches and subsidiaries are required to comply with Dutch reporting and tax regulations, but the accounting practice and financial reporting is different. |
| Recommended for | Companies looking for a simple entry into a new market (branches); Businesses seeking external investments or partnerships (subsidiaries). |
| Capital requirements | – 0.01 EUR (if the legal entity is BV for a subsidiary), – no minimum capital (branch). |
| Advantages of opening a branch in Netherlands | – easy incorporation process, – the branches’ financial statements do not need to be published, – no minimum share capital required, – a great opportunity to enter a new market. |
| Advantages of opening a subsidiary in Netherlands | – limited liability of the shareholders, – the parent company is not liable for the subsidiary, – customers and partners might have more trust in a local brand, – intangible assets can be amortized for Dutch tax purposes. |
| Assistance | If you have trouble choosing between opening a subsidiary or branch, our law firm can help. |
Table of Contents
What are the main services your lawyers can offer for the registration of a branch or a subsidiary in the Netherlands in 2026?
Our team of lawyers in the Netherlands can offer dedicated legal services for the registration of a branch or a subsidiary. Below, you can find out the main ways in which we can assist you:
- establish an initial meeting, during which we can discuss about yourinvestment plans in the Netherlands;
- based on the assessment, we can recommend you to open a branch or a subsidiary;
- we can present the advantages and disadvantages of both structures, so that you can make an informed decision (these can take into account startup costs, managerial requirements, taxation, etc.);
- we will ask for the paperwork required for the registration and, after you grant us the power of attorney, we will submit the registration file;
- we can help you draw up the statutory paperwork, obtain certificates, licenses, etc.;
- our team of Dutch lawyers can also complete the tax registration formalities;
- we can help you find a suitable office location (having a registered address in the Netherlands is mandatory when starting a business).
What is a branch office in the Netherlands?
A branch is a permanent establishment that forms one entity with a foreign company. It is essentially an extension of the parent company abroad and thus the parent company will need to undertake the liabilities that arise from opening a Dutch branch. This particularity offers both advantages and disadvantages.
What are the characteristics of a branch?
Foreign investors willing to establish a branch in the Netherlands can read the list below which summarizes the main characteristics of this business form:
- set up advantages – it is relatively easy to set up and the costs are usually lower compared to incorporating a new legal entity;
- slightly different taxation regime – no withholding tax on remitted earnings and no capital registration tax (it must also be noted that the branch is liable to taxation in the Netherlands only for the income obtained from business activities carried out in this country, not for the company’s global income);
- different accounting principles – no need to publish the financial result of the branch (with some exceptions);
- no legal capacity – the branch is not a separate Dutch legal entity, it operates as a foreign company;
- liability – the parent company that will set up a branch in the Netherlands will be fully liable for the debts and obligations of the Dutch branch.
In the infographic below, we present the branch compared to the subsidiary in the Netherlands:
What is a subsidiary in the Netherlands?
A subsidiary refers to a separate legal entity that is set up by a foreign company. It is incorporated under one of the business forms available in this country and it is an autonomous entity, unlike the branch.
What business forms are acceptable for a subsidiary?
A subsidiary is, by definition, a separate legal entity with legal personality. Therefore, in order to register one, investors can incorporate one of the following:
- the private limited company;
- the public limited company.
What is the most suitable business form for a subsidiary?
Both business forms mentioned above are suitable for setting up a subsidiary. The decision must be taken based on the business plans investors have, the capital they plan to invest or whether they want to list the company on the stock exchange (the latter is possible only for the public company).
What are the advantages of a subsidiary?
Our lawyers present some of the advantages of a subsidiary:
- the shareholders have limited liability to the extent of their contribution to the capital;
- unless agreed otherwise, the parent company is not liable for the Dutch subsidiary;
- intangible assets can be amortized for Dutch tax purposes;
- Dutch nationals may prefer dealing with a subsidiary.
The video below describes the main differences between the two business forms:
What are the branch and subsidiary taxation and reporting requirements in the Netherlands in 2026?
The branch and the subsidiary are subject to the same corporate income tax rate in the Netherlands, however, the basis for residence is different, as it depends on where the company has its management office.
What are the main taxes charged to companies operating in the Netherlands in 2026?
Below, we highlight some of the most important taxes:
- 19% – the corporate income tax on the first 200,000 EUR of taxable profits;
- 25.8% – the applicable corporate income tax rate on taxable profits that exceed 200,000 EUR;
- 15% – the dividend withholding tax rate, unless reduced or exempted through a tax treaty or the EU parent-subsidiary directive;
- 0% – the withholding tax rate for interest and royalties applicable both to residents and nonresident companies that benefit from a participation exemption (the same tax can be charged at a rate of 28.5% in other cases);
- 21% – the standard value-added tax in the Netherlands, along with two reduced rates of 0% and 9% that apply to certain types of foods and services (foodstuffs, medicines, books, or goods that are exported from the EU).
Are there any residency requirements for foreign investors?
No, foreign investors setting up branches or subsidiaries in the Netherlands do not need to have Dutch residency in order to incorporate a company in this country.
If you need more information or need help deciding what type of company is best to establish in the Netherlands in 2026, please contactour lawyers who specialize in opening branches and subsidiaries in the Netherlands.