Cross-Border Investment: Why the Dutch Holding Still Anchors Europe
Investing across Europe today requires more than identifying an attractive opportunity. It requires a framework that ensures tax efficiency, legal certainty, and institutional credibility. At the center of this framework, the Dutch holding remains the anchor.
A Dutch B.V. combines several decisive advantages. Corporate income tax is levied at 25.8%, yet the participation exemption removes this burden on qualifying dividends and capital gains, making cross-border cash flows tax neutral. Under the EU Parent-Subsidiary Directive, dividends distributed within the Union flow without withholding tax when the parent holds at least 5–10% of the subsidiary. The Dutch treaty network reinforces this position, reducing dividend withholding taxes to between 0% and 5% in most bilateral relationships. Since 2021, outbound interest and royalty payments from the Netherlands are subject to a 0% withholding rate unless directed to blacklisted jurisdictions. This architecture ensures that capital routed through the Netherlands can move across borders with minimal friction.
Luxembourg illustrates how this framework expands. A company such as an S.à r.l. or S.C.Sp. benefits from corporate income tax rates of 24.94%, but with exemptions on dividends and capital gains that range from 85% to 100%. Switzerland offers another layer, with federal and cantonal corporate tax rates reduced to between 11% and 15% following the 2020 reform. Its statutory dividend withholding tax of 35% can be brought down to 0–15% under the treaty with the Netherlands. In Spain, dividends distributed by an S.L. are subject to a standard withholding tax of 19%, but this is reduced to 0–5% when paid to a Dutch parent. Belgium applies a corporate income tax of 25%, while dividend withholding—normally 30%—is reduced to 0–5% under the bilateral treaty when the Dutch shareholder holds a significant participation.
Poland provides a practical case study. Corporate income tax is set at 19%, with a reduced rate of 9% for companies generating less than EUR 2 million in annual revenue. Dividends paid to a foreign shareholder are normally subject to 19% withholding tax. However, under the treaty with the Netherlands and the EU directive, this falls to 0% provided that the Dutch parent holds at least 5% of the Polish subsidiary. Real estate transactions are taxed at 2% through the civil law transaction tax when acquired as asset deals, while new developments are subject to 23% VAT, with exemptions applicable for secondary properties.
In a recent office acquisition in Warsaw, capital was structured through a Dutch holding, while a Polish spółka z ograniczoną odpowiedzialnością was incorporated to hold the title. Local legal counsel coordinated due diligence on zoning, tenant contracts, and notarial execution. Although local transaction taxes were paid in Poland, dividend distributions to the Dutch parent flowed without withholding, creating a tax-free channel at shareholder level. In the longer term, a Luxembourg vehicle could consolidate this asset with others, creating a cross-border fund that is attractive to institutional investors.
The contrast is clear. Without such architecture, investors face 19% withholding in Poland, 19% in Spain, or 35% in Switzerland. With a Dutch holding in place, these rates are reduced to 0–5%. Instead of fragmented, tax-heavy execution, the strategy becomes integrated, transparent, and scalable.
Compliance obligations are tightening, and substance requirements in the Netherlands, Luxembourg, and Switzerland are now enforced with greater intensity. Yet for investors who build with foresight and partner with reliable legal counsel, the Netherlands continues to deliver the most balanced combination of neutrality, efficiency, and credibility.
The question for cross-border investors is no longer whether to choose Spain, Poland, Belgium, Luxembourg, or Switzerland. The real choice lies in whether to improvise in each jurisdiction or to build a system in which all pieces fit seamlessly together. In that system, the Dutch holding remains the cornerstone.
Amsterdam, October 2025
