The Netherlands has long been one of the most widely used jurisdictions in Europe for international corporate structuring. Its combination of legal stability, an extensive tax treaty network, strong banking infrastructure and a highly professional corporate services ecosystem makes it particularly attractive for entrepreneurs, investors and multinational groups.
For many international founders, the Dutch holding structure has become a common solution when managing investments, intellectual property, operating companies or cross-border business activities. While many entrepreneurs initially search for how to open a company in the Netherlands, the real strategic value often lies in understanding how a Dutch holding structure works and how it can be integrated into a broader international business model.
When designed correctly, a Dutch holding structure can provide legal protection, operational flexibility and efficient coordination of international activities.
Why the Netherlands Is Attractive for International Corporate Structures
The Netherlands occupies a central position within the European Union and is widely regarded as one of the most business-friendly jurisdictions in Europe. The country offers a predictable legal framework, efficient administrative procedures and a strong reputation among international banks and investors.
One of the key advantages of the Netherlands is its extensive network of double tax treaties. Since the treaties with Andorra and Kyrgyzstan entered into force on 1 January 2025, the Dutch government puts the count at tax treaties in force with ninety-eight countries. This treaty network plays a major role in reducing withholding taxes on dividends, interest and royalties in cross-border structures.
The Netherlands is also known for its stable corporate law framework and its long-standing experience with international holding structures. Many multinational groups use Dutch entities as intermediate holding companies, investment platforms or coordination centers for European operations.
In addition, the Dutch financial and legal ecosystem is highly developed. Entrepreneurs benefit from access to experienced tax advisors, international law firms, corporate service providers and one of Europe’s most sophisticated banking sectors.
What Is a Dutch Holding Structure
A Dutch holding structure typically consists of at least two companies. The first entity is the holding company, which owns shares in one or more operating companies.
The holding company does not usually carry out day-to-day business activities. Instead, it holds investments, intellectual property or shares in subsidiaries. The operating company is responsible for the commercial activity of the business, such as providing services, selling products or employing staff.
A simplified structure often looks as follows:
Shareholder
↓
Dutch Holding BV
↓
Operating Company (BV or foreign subsidiary)
This separation between holding and operating activities is widely used in international corporate structures because it allows companies to separate operational risks from ownership of assets.
The Dutch BV: The Standard Corporate Vehicle
The most common legal entity used in Dutch corporate structures is the Besloten Vennootschap (BV), which is the Dutch equivalent of a private limited liability company.
The BV is flexible and well suited for both holding companies and operating companies. Since the flexibilisation of Dutch private company law there is no statutory minimum share capital: the provision of Book 2 of the Dutch Civil Code on the capital of a BV requires only that the articles state the nominal amount of the shares, and sets no minimum figure. Until the 2012 reform, the same provision required the authorised and issued capital, and the paid-up part of it, to reach a statutory minimum fixed by royal decree; that requirement has been struck from the text entirely, so the minimum capital figures still quoted from the old regime no longer apply. Official government guidance for entrepreneurs confirms that no start-up capital is needed and that at least one eurocent is paid in on incorporation, in cash or in kind. The company can be established by one or more shareholders.
Shareholder liability is limited to the amount that must be paid up on the shares, and the governance structure can be tailored to the needs of the founders or investors.
Because of its flexibility and strong legal framework, the BV has become the standard vehicle for both domestic and international corporate structures in the Netherlands.
How to Set Up a Holding Structure in the Netherlands
Establishing a Dutch holding structure generally involves incorporating at least two companies: the holding company and the operating company.
The process begins with defining the corporate structure and determining how the ownership and governance will be organized. This includes identifying the shareholders, determining the share distribution and clarifying the roles of directors.
Once the structure has been defined, the Articles of Association are prepared for the Dutch BV. These documents define the governance rules, shareholder rights and operational framework of the company.
The company is then incorporated before a Dutch civil-law notary, and this step cannot be skipped: Book 2 of the Dutch Civil Code provides that the company is incorporated by notarial deed, signed by every incorporator and by everyone who takes shares under it. The notary prepares the deed and then registers the company and all its managing directors with the Business Register of the Dutch Chamber of Commerce (KvK), and its ultimate beneficial owners with the KvK ultimate beneficial owner register. Registering a new company carries a one-off fee of 85.15 euros.
After incorporation, the Chamber of Commerce passes the registration details to the Netherlands Tax Administration, and where the company’s activities are subject to VAT the VAT numbers are issued by that administration without a separate application.
In many cases, entrepreneurs establish both the holding BV and the operating BV at the same time in order to create a clean and structured corporate framework from the beginning.
The Dutch Participation Exemption
One of the most important features of the Dutch holding regime is the participation exemption.
Under this regime, dividends received by a Dutch holding company from qualifying subsidiaries are generally exempt from Dutch corporate income tax. In addition, capital gains from the sale of qualifying subsidiaries may also be exempt. The article of the Dutch Corporate Income Tax Act 1969 that sets out the participation exemption leaves out of account, in determining profit, the benefits derived from a participation and the costs of acquiring or disposing of it, which is why both dividends and disposal gains fall within its scope.
This mechanism is designed to prevent double taxation within corporate groups and is one of the reasons why the Netherlands is widely used for international holding structures.
To qualify, certain conditions must be met. The basic threshold is a holding of at least 5 per cent of the nominal paid-up capital, with equivalent tests for cooperatives and comparable interests. The exemption is then switched off for a participation held as a portfolio investment, unless that participation is a qualifying one. It qualifies if either of two tests on the subsidiary is met: that the subsidiary is subject to a profit tax which results in a real levy by Dutch standards, or that the subsidiary’s assets, directly or indirectly, usually consist for less than half of what the statute defines as low-taxed free investments. Either test on its own is enough, only a participation that fails both falls outside the exemption, and one that passes either keeps the exemption even though it is held as an investment.
Corporate Taxes in the Netherlands
Dutch companies are subject to corporate income tax on their worldwide profits if they are considered tax residents of the Netherlands.
Under the rate table in the Dutch Corporate Income Tax Act 1969, in force in its present form since 1 January 2023, the corporate income tax rates are:
19 per cent on the first €200,000 of taxable profit
25.8 per cent on profits above that threshold
However, the effective tax burden can vary depending on the company’s activities, financing arrangements and international structure.
The Netherlands also benefits from a large network of double taxation treaties, which can reduce withholding taxes and facilitate cross-border business operations.
Substance and Management Considerations
When using a Dutch holding structure, it is important to consider issues related to tax residency and substance. The two questions are distinct, and conflating them leads to the wrong conclusion.
Incorporation itself imposes no residence test. Nothing requires a BV to have a Dutch-resident director in order to be validly incorporated, and a company incorporated under Dutch law is always deemed established in the Netherlands for the purposes of the Corporate Income Tax Act, save for a list of provisions that the same paragraph carves out. That carve-out is the part which matters here, because it covers, among other provisions, the participation exemption and the fiscal unity regime. For those, incorporating in the Netherlands settles nothing by itself, and where the company is established has to be determined on its own footing.
Substance is what decides those cases. The general tax code provides that where a body is established is assessed according to the circumstances, and that is the general rule of Dutch tax law, governing wherever the deeming rule just described does not reach. Tax authorities therefore look at the place of effective management, meaning where strategic decisions are made and where the company is effectively managed.
For international entrepreneurs, this means that governance, board meetings and key decisions should be properly documented and aligned with the company’s declared jurisdiction.
In practice, many international structures combine foreign shareholders with Dutch corporate governance elements to ensure that the structure remains defensible from a tax perspective.
Typical Use Cases for Dutch Holding Structures
Dutch holding structures are commonly used in a variety of international scenarios.
Many entrepreneurs use them to manage multiple operating companies in different countries. Others use Dutch holdings to centralize ownership of intellectual property, manage investment portfolios or coordinate European operations.
The Netherlands is also frequently used as a jurisdiction for venture-backed companies because Dutch corporate law is well understood by international investors and venture capital funds.
Final Considerations
Setting up a holding structure in the Netherlands can offer significant advantages for international entrepreneurs, particularly when managing cross-border investments or coordinating multiple subsidiaries.
However, the effectiveness of such a structure depends on careful planning. Issues such as governance, tax residency, treaty access and operational substance must be considered from the outset.
When properly designed, a Dutch holding structure can provide a stable and flexible platform for managing international business activities and supporting long-term growth within the European market.
This article is informational and does not constitute tax advice. Each engagement is subject to scope and applicable regulation.