Company formation in 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.
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
- Company formation packages available. Ask now.
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%
- 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%. Ask now!
- INCOMING DIVIDENDS: 0% if Participation Exemption applies.
- CAPITAL GAINS TAX (CGT): 0% if Participation Exemption applies.
- WITHHOLDING TAX:
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.
- BILATERAL TAX TREATIES with 95 countries including Hong-Kong, Cyprus, Malta
- VALUE ADDED TAX (VAT). EU VAT regime. The standard rate for inland sales is 21%.