The Netherlands has become one of the most widely used jurisdictions in Europe for structuring international real estate investment platforms. Although the country does not use the term “REIT” in the same way as the United States or the United Kingdom, the Dutch system offers equivalent structures that allow investors to build diversified property portfolios while benefiting from a stable legal framework, strong financial infrastructure and access to one of the largest tax treaty networks in the world.
For international investors, family offices and institutional capital, using the Netherlands as the central jurisdiction for a real estate investment platform can create significant advantages in terms of governance, financing, tax coordination and cross-border portfolio management.
The Dutch REIT-Equivalent Structure
In the Netherlands, the closest equivalent to a traditional REIT is the Fiscale Beleggingsinstelling (FBI), which pays corporate income tax at 0% where its conditions are met, as the Belastingdienst guidance on the fiscale beleggingsinstelling states. Those conditions include distribution of the profit to shareholders within eight months of the end of the financial year, together with the governance, shareholder and leverage tests set out in article 28 of the Wet op de vennootschapsbelasting 1969, which caps borrowing at sixty per cent of the book value of the property.
Each of those two conditions is narrower than its summary. The sixty per cent in article 28(2)(b) applies to debt taken on over immovable property belonging to the body, or over rights to which that property is subject, and only to investable means in excess of the body’s own capital; other debt is capped separately at twenty per cent of the book value of the remaining investments. For that test, interests in connected bodies whose consolidated assets usually consist at least almost exclusively of immovable property, or of rights to which it is subject, count as immovable property themselves. The distribution condition in article 28(2)(c) is not a free choice either: what has to be made available is the part of the profit fixed by order in council, it has to reach shareholders and holders of participation rights no later than in the eighth month after the end of the year, and it has to be divided equally over all shares and participation rights.
One change decides the analysis for property investors: since 1 January 2025 an FBI may no longer invest directly in Dutch real estate and retain that treatment. The consequence falls on the entity rather than on the asset. The Belastingdienst states that where an FBI does so the 0% rate no longer applies and the ordinary corporate income tax rate is applied, and article 28(2) reads the same way, because the absence of that investment is drafted as a condition of being regarded as an investment institution at all rather than as a rule about how one asset is taxed. The prohibition is defined by reference to article 17a(a) of the same act, which counts rights relating directly or indirectly to Dutch immovable property as included alongside the property itself, and it reaches one step further, to debt claims on a body that holds such property where the return on the claim is usually connected, in law or in fact, mainly with income from that property.
Ordinary corporate income tax is what applies once the regime is lost, and article 22 of the same act sets it at 19 per cent on the first 200,000 euro of taxable profit and 25.8 per cent above that. Indirect exposure through a non-transparent subsidiary remains possible, as does direct investment in real estate outside the Netherlands. For most international platforms the practical route is now an ordinarily taxed BV or NV holding structure rather than the FBI.
Even when investors do not use the FBI regime directly, many real estate investment platforms still adopt a Dutch holding or fund structure that performs a similar role to a REIT by centralizing capital, governance and reporting.
A typical structure for international real estate investments may look as follows:
Investors
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Dutch Holding / Fund (NL)
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Local SPV per country
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Real estate assets
In this structure, the Dutch entity functions as the investment platform, while local special purpose vehicles (SPVs) hold the actual real estate assets in each country.
Example of a Cross-Border Real Estate Portfolio Managed from the Netherlands
Consider an example where a real estate investment platform raises €25 million in equity from investors. The fund applies an assumed 60 per cent leverage, allowing the platform to acquire approximately €62.5 million in total property assets across several European countries.
The portfolio may include the following investments, with yields assumed for the illustration rather than drawn from market data.
A logistics property portfolio in Germany valued at €25 million, generating a net operating yield of 6 per cent per year.
A hospitality and tourism property portfolio in Spain valued at €20 million, generating a net operating yield of 7 per cent per year.
A residential value-add portfolio in France valued at €17.5 million, generating a net operating yield of 6.5 per cent per year.
The annual net operating income from these assets would be approximately:
Germany: €25 million × 6% = €1.50 million
Spain: €20 million × 7% = €1.40 million
France: €17.5 million × 6.5% = €1.14 million
The combined annual net operating income for the portfolio would therefore be approximately €4.04 million.
Assuming the structure uses €37.5 million of debt financing at an assumed average interest rate of 4.5 per cent, the annual financing cost would be approximately €1.69 million.
After interest payments, the platform would generate around €2.35 million in annual cash flow before local taxes, which can then be distributed to investors or reinvested into the portfolio depending on the investment policy.
What Dutch Transfer Tax Does on the Way In
Where the assets themselves are Dutch, the acquisition is where the analysis starts, before any of the income analysis matters. Article 2 of the Wet op belastingen van rechtsverkeer charges transfer tax on the acquisition of immovable property situated in the Netherlands and of rights to which that property is subject, and its second paragraph extends the charge to the acquisition of economic ownership, meaning a set of rights and obligations in respect of the property that represents an interest in it and includes at least some risk of a change in value.
Article 14 sets the general rate at 10.4 per cent. Lower rates apply to the acquisition of a dwelling, and a rate of 4 per cent applies where the exemption in article 15(1)(a) and (6) is disapplied by article 15(11). A warehouse, an office or a hotel falls outside the residential rates, but the general rate is the one in point only where no exemption in article 15 applies and the acquisition is not one of the share acquisitions that article 15(11) takes out of the exemption in article 15(1)(a) and (6). Article 15(1)(a) exempts an acquisition under a supply on which turnover tax is due, unless the property has been used as a business asset and the acquirer can deduct that turnover tax, and article 15(6) extends the exemption to that used case where the acquisition falls within six months of first use or of the earlier start of a letting and is recorded in a notarial deed in time. Where article 15(11) does take the share acquisition out, article 14(8) sets the rate at 4 per cent expressly in derogation from the first and second paragraphs.
Buying the shares in the owner rather than the building does not by itself move the transaction outside the charge. Article 4(1)(a) treats shares in a legal person as immovable property where its assets consist, at the time of the acquisition or at any time in the preceding year, largely of immovable property while at the same time at least 30 per cent of the assets consist or consisted of Dutch immovable property, provided the property taken as a whole is or was wholly or mainly serving the acquisition, disposal or exploitation of that property. Article 4(3)(b) then charges a corporate acquirer only where it holds an interest of at least one third in that legal person, counting the shares it already holds, the shares of connected bodies and connected individuals, and the shares still to be acquired under the same or a related agreement. A share deal is accordingly a question of thresholds and of what sits on the balance sheet, not of the label on the contract.
Why the Netherlands Works Well for Cross-Border Real Estate Investments
One of the main reasons investors use the Netherlands for such structures is its extensive double taxation treaty network. The Ministry of Finance overview of treaties in the field of direct taxation in force at 1 July 2026 lists agreements with more than ninety jurisdictions. These treaties can reduce withholding taxes on dividends, interest and other financial flows between jurisdictions.
The Dutch tax system also offers the participation exemption in article 13 of the Wet op de vennootschapsbelasting 1969, which generally allows dividends received from qualifying subsidiaries to be exempt from Dutch corporate income tax, the basic test being a holding of at least 5 per cent of the nominal paid-up capital. Capital gains from the sale of qualifying subsidiaries may also benefit from exemption, because the provision covers the benefits arising from the participation as a whole. This is particularly relevant when a Dutch holding company owns real estate SPVs in multiple countries.
The word generally is carrying weight there. Article 13(9) switches the exemption off for a participation held as an investment unless that participation qualifies, and article 13(11) treats it as qualifying where either the subsidiary is subject to a profit tax that results in a real levy by Dutch standards, or its assets consist, directly or indirectly, usually for less than half of low taxed free investments. Real estate is where that asset test behaves differently from the rest of the balance sheet. Article 13(12)(a) takes investments consisting of immovable property, including rights relating directly or indirectly to immovable property, out of the definition of free investments in that subparagraph, unless the body holding them has itself been designated an investment institution or an exempt investment institution. An SPV that does little beyond owning and letting its building to third parties therefore does not fail the asset test on account of the building, while the same building inside an investment institution counts against it. The carve-out does not travel to the rest of the paragraph: subparagraph (c) treats business assets used for activities consisting mainly of making their use or right of use available to the taxpayer or to bodies connected with it as free investments in their own right, subject to the exceptions it sets out, so a building let inside the group is read there instead.
Two further paragraphs of the same article qualify the timing and the source of the benefit. Article 13(16) keeps the exemption running for three years where an interest that the taxpayer has held for more than a year, and for which it qualified without interruption during that period, stops being a participation because it no longer meets the 5 per cent threshold. Article 13(17) works the other way and withdraws the exemption to the extent the benefit consists of payments by the subsidiary that can be deducted, in law or in fact, directly or indirectly, against the base of a profit tax.
Another advantage is the clarity of the Dutch dividend distribution system. Article 5 of the Wet op de dividendbelasting 1965 sets the standard dividend withholding tax rate at 15 per cent, although this can often be reduced or eliminated through tax treaties or through the withholding exemption in article 4 of the same act, which carries into Dutch law the exemption in article 5 of Council Directive 2011/96/EU on the common system of taxation applicable to parent companies and subsidiaries of different Member States and reaches beyond it.
The reach and the limits are both in article 4. Its second paragraph covers a recipient resident in another EU or EEA state, or in a state whose treaty with the Netherlands provides for dividends, and only where that recipient holds an interest to which the participation exemption or the participation credit would apply if it were resident in the Netherlands, which is how the Dutch exemption can run from a 5 per cent holding where the directive asks for a minimum holding of 10 per cent. The third paragraph then takes the exemption away, and each of its cases is enough on its own, because the statute separates the last two with a disjunction where the second paragraph joins its own conditions with a conjunction: where a treaty between the recipient’s state of residence and a third state treats the recipient as resident in a state that has no dividend treaty with the Netherlands and is neither an EU nor an EEA state, where the recipient performs a function comparable to an investment institution under article 6a or article 28 of the corporate income tax act, or where the interest is held with the avoidance of tax by another as its main purpose or one of its main purposes and there is an artificial arrangement or series of arrangements. The fourth paragraph puts on the recipient the burden of making it plausible that it is the beneficial owner. The directive carries the same anti-abuse logic in its own article 1(2) and (3).
The Netherlands also offers a highly professional banking environment and is widely recognized by institutional investors. This credibility is particularly important for real estate platforms that rely on international capital, syndicated financing or joint venture structures.
How Much of the Leverage Is Deductible
Leverage of the order assumed in the illustration is not deductible without limit. Article 15b of the Wet op de vennootschapsbelasting 1969 disallows a taxpayer’s net interest balance to the extent it exceeds the higher of 24.5 per cent of the corrected profit and one million euro. That balance is interest expense on loans less interest income on loans, and it is never less than nil. The corrected profit is the profit determined without the rule, increased by the year’s depreciation, increased by write downs to lower going concern value and reduced by reversals of such write downs, and increased by the year’s interest balance apart from the capitalised interest the provision carves out, and it is set at nil if it would otherwise be negative.
What is disallowed in a year is not lost. The fifth paragraph carries it forward to the following year and allows it to be deducted there to the extent that year’s own balance falls short of the higher of the two amounts, taking the carried balances in the order in which they arose, with the inspector fixing the amount carried forward by an appealable decision.
Two features of the rule matter to a platform of this shape. The test runs on a net balance, so interest received by the Dutch entity on shareholder loans made down to the SPVs reduces the balance the rule bites on, and the sixth paragraph brings into that balance the costs of the loans and the results of transactions hedging interest and currency risk on them, which means the figure tested is not simply the coupon in the model. The rule also measures each taxpayer separately, so where the borrowing sits in the local SPVs rather than in the Dutch entity it is the local interest limitation and not article 15b that decides the outcome. The size of the interest deduction is in that sense a function of where the debt is placed as much as of how much of it there is.
Example of Portfolio Exit Scenario
A key advantage of structuring a real estate investment platform through a central jurisdiction is the ability to coordinate portfolio exits efficiently.
Imagine the portfolio described above is held for five years and the property values increase as follows, again on assumed figures.
German logistics assets appreciate by 15 per cent, increasing in value from €25 million to approximately €28.75 million.
Spanish hospitality assets appreciate by 10 per cent, increasing from €20 million to €22 million.
French residential assets appreciate by 12 per cent, increasing from €17.5 million to approximately €19.6 million.
The total capital gain across the portfolio would therefore be approximately €7.85 million.
In a centralized investment structure, these gains would be realized at the level of the local SPVs and then distributed through the Dutch holding platform to investors. The holding structure allows investors to coordinate distributions, reinvestment strategies or capital recycling more efficiently than if each property were owned directly by individual investors.
Realizing a gain by selling the shares in an SPV rather than the building does not automatically place it beyond the reach of the country where the building stands. Where a covered tax agreement already allows that country to tax gains on shares that derive more than a stated part of their value from immovable property situated there, article 9 of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting applies that value threshold if it is met at any time during the 365 days preceding the alienation, and extends the clause to shares and comparable interests such as interests in a partnership or a trust. Its sixth paragraph lets a party reserve against those subparagraphs, so the position is read agreement by agreement rather than assumed.
Inside the Netherlands the equivalent question is answered by article 4 of the Wet op belastingen van rechtsverkeer described above, which asks about the composition of the assets rather than about the form of the sale. That is why selling the property company instead of the property is tested against thresholds on both sides of the transaction, and why the wording of the particular agreement matters as much as the size of the gain.
Strategic Advantages for Investors
Using the Netherlands as the central platform for a real estate investment structure provides several strategic advantages.
It creates a single governance framework for investors and lenders, simplifying reporting and investor relations. It allows capital to be deployed across multiple countries while maintaining a coherent legal structure. It also facilitates financing, as Dutch entities are widely recognized by international banks and institutional investors.
In addition, the Dutch legal and corporate governance system is familiar to venture capital funds, private equity firms and institutional investors, which can simplify negotiations when raising additional capital.
Final Considerations
A Dutch real estate investment structure can provide a powerful platform for managing international property portfolios. By centralizing governance, financing and investor relations in one jurisdiction, investors gain operational efficiency and improved transparency across multiple markets.
However, successful structuring requires careful planning. Issues such as local taxation, substance requirements, treaty access and financing structures must all be considered in advance. Treaty access is itself conditioned by the principal purpose test in article 7 of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, the BEPS Action 6 minimum standard, under which a benefit is not granted in respect of an item of income or capital if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in it, unless it is established that granting the benefit in those circumstances would be in accordance with the object and purpose of the relevant provisions of the agreement.
Substance is read in the same register on the Dutch side. The Besluit vooroverleg rulings met een internationaal karakter makes advance certainty on a cross-border position conditional on the requesting body forming part of a group that carries on operating business activities in the Netherlands, which is the requirement the besluit itself labels the economic nexus, on such activities being carried on for the account and risk of the requesting party with sufficient relevant personnel present in the Netherlands at group level, and on those activities fitting the function of that body within the group. The besluit adds that this provision does not apply by its nature where the certainty sought is that there is no foreign tax liability within the meaning of article 17 or 17a of the corporate income tax act, which is the same article 17a the prohibition on Dutch property for an FBI is built on.
When properly designed, a Dutch-based real estate investment platform can offer a flexible and credible framework for managing diversified European property portfolios while maintaining strong access to international capital markets.
This article is informational and does not constitute tax advice. Each engagement is subject to scope and applicable regulation.