Incorporations in the Netherlands

Companies registered in the Netherlands are taxable entities with tax rates comparable with other onshore EU jurisdictions. However, in some cases they can become quite an effective tool for the conduct of international business. Most often, along with Danish companies, such companies are used as head offices of multinational holding companies or for the possession and trade of such assets as shares in real estate investment funds.

A company in the Netherlands may be in the form of NV (Naamloze Vennootschap or public company with limited liability and BV (Besloten Vennootschap or closed limited liability company). The most popular are closed BV companies.

Dutch companies are required to pay the registration share capital, which, however, recently can be any amount (usually recorded 100 euros).

The following are the main features of Dutch companies:

  • Have a minimum of one director and one shareholder. Residency of Directors and the shareholders is irrelevant. Despite the lack of restrictions on the residency of directors, the Dutch company administrators usually require the appointment of at least one local director for the actual management of companies in order to keep the company’s tax resident status in the Netherlands;
  • Data on the directors and shareholders are public and can be requested in the State Register;
  • Obligation of filing of annual financial statements;
  • Any changes to the structure of the company must be notarized;
  • Issuance of powers of attorney by directors is usually performed only for specific transactions. General power of attorney is not prohibited; however, on practice to receive such a document is almost impossible;

Despite the fact that the corporate income tax in the Netherlands is quite high (on profits of up to 200 000 euros - 20%, with profits of more than 200 000 - 25%), there are a number of tax advantages that make Netherlands attractive jurisdiction for financial routes:

  • A Dutch company that owns at least 5% of the shares in a foreign company is exempt from tax on dividends received from the company, as well as the tax on capital gains from the sale of that shares;
  • A Dutch company is not subject to withholding tax on royalty payments. The company may use rights to such forms of intellectual property as trademarks, patents, copyrights, rights to the film and industrial design, and others.
  • A Dutch company is not subject to withholding tax interest payments. Payment of interest to a Dutch company is taxed at source at the minimum rate or not taxed at all due to numerous agreements on avoidance of double taxation.