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Besloten Vennootschap met beperkte aansprakelijkheid (Private company limited)

The besloten vennootschap (BV), or private limited liability company, is the most widely used corporate form in the Netherlands for both domestic and international business activities. Its structure offers flexibility in governance, limited liability for shareholders, and access to the Netherlands’ extensive tax treaty network—making it suitable for holding, trading, and service-providing entities.

A Dutch BV is a company limited by shares, meaning shareholders are only liable up to the amount they have invested. The BV can be formed with a single shareholder and a single director, both of whom may be either individuals or legal persons. There is no statutory minimum share capital, although at least one share must be issued at incorporation. This allows a BV to be set up with nominal capital (e.g., EUR 0.01).

The company’s articles of association govern internal affairs, including share transferability. While shares in a BV are typically non-freely transferable to preserve private ownership, the articles may permit free transfer or require shareholder approval, depending on the chosen structure.

Incorporation requires the involvement of a Dutch civil-law notary, who prepares and executes the notarial deed of incorporation. The company is registered with the Dutch Trade Register (Kamer van Koophandel), and obtains a corporate registration number (KvK number) upon formation.

Although Dutch law does not mandate a locally resident director, tax residency considerations make board composition important. For a BV to be regarded as a Dutch tax resident to benefit from tax treaties and EU directives, central management and control should be exercised in the Netherlands.

This typically involves:

  • Majority of the board residing in the Netherlands;
  • Board meetings being held within Dutch territory;
  • Key management decisions being made locally;
  • Adequate office infrastructure, where applicable.

Foreign-owned BVs may appoint Dutch-resident directors to enhance local substance for tax purposes.

BVs are subject to Dutch corporate income tax (vennootschapsbelasting) on worldwide income if tax-resident in the Netherlands.

As of 2025, the applicable tax rates are:

  • 19% on the first EUR 200,000 of taxable profit;
  • 25.8% on profits exceeding that threshold.

Participation Exemption

The Netherlands offers a participation exemption regime, under which qualifying dividends and capital gains received from subsidiaries are exempt from corporate tax. To qualify:

  • The BV must hold at least 5% of the share capital of the investee company;
  • The participation must not be held as a passive portfolio investment;
  • The subsidiary must be subject to a realistic taxation level (generally, a minimum 10% effective tax rate).
  • This regime supports the Netherlands’ role as a holding jurisdiction.

Dividends paid to non-resident shareholders are generally subject to 15% dividend withholding tax, unless reduced or eliminated under a double tax treaty or the EU Parent-Subsidiary Directive.

Interest and royalty payments are generally not subject to withholding tax, unless paid to related entities in jurisdictions classified as low-taxed or non-cooperative. In such cases, a 25.8% conditional withholding tax may apply.

The standard VAT rate in the Netherlands is 21%. Reduced rates of 9% or 0% may apply to specific goods and services (e.g., food, medicines, international transport).

VAT is chargeable on:

  • Domestic sales of goods and services;
  • Intra-EU acquisitions;
  • Imports from outside the EU.

Businesses must register for VAT and file periodic returns with the Dutch Tax and Customs Administration (Belastingdienst). The standard filing frequency is quarterly, but monthly filings may be required if the business consistently pays over EUR 15,000 in VAT per quarter or demonstrates non-compliance.

For intra-EU B2B sales, the reverse charge mechanism typically applies, where the VAT liability shifts to the buyer. To apply the reverse charge:

  • Both parties must be VAT-registered in their respective EU countries;
  • The seller must report the transaction via the EC Sales List and ensure the buyer’s VAT number is valid via the VIES system.

Intrastat declarations are also required for companies whose intra-EU trade exceeds annual thresholds.

Since 2021, the One-Stop Shop (OSS) system allows B2C sellers to report and remit VAT for cross-border EU sales from a single EU member state. Once annual cross-border B2C sales exceed EUR 10,000, VAT must be charged at the rate applicable in the consumer’s country. The OSS simplifies reporting across jurisdictions.

For electronically supplied services (e.g., software, streaming, e-learning), VAT is due in the consumer’s location, and reporting is facilitated via the Mini One-Stop Shop (MOSS), now part of the broader OSS scheme.

Sales to customers outside the EU are generally exempt from Dutch VAT, although documentary proof of export is required.

Corporate Compliance and Reporting

Dutch BVs are required to meet several ongoing compliance obligations:

  • Annual Financial Statements must be prepared in accordance with Dutch GAAP or IFRS and filed with the Chamber of Commerce within 12 months after the financial year-end. For most companies, abbreviated financials are permitted.
  • Corporate income tax returns must be submitted annually to the Belastingdienst, typically within 5 months after the end of the financial year, extendable upon request.

A statutory audit is mandatory if a BV exceeds two of the following thresholds for two consecutive years:

  • Balance sheet total exceeding EUR 6 million;
  • Net turnover exceeding EUR 12 million;
  • Average annual workforce of more than 50 employees.

Audits must be conducted by a qualified and registered Dutch accountant.

The Dutch BV provides a flexible, efficient, and internationally recognized corporate vehicle for a wide range of business purposes. While incorporation is straightforward, proper attention must be paid to substance, governance, and compliance requirements, especially for tax residency and treaty access. The Netherlands’ comprehensive tax framework, strong legal infrastructure, and central role in EU trade make it a preferred jurisdiction for both SMEs and multinational groups.

Taxes

Tax residency – Corporate residency is determined by the place of effective management. However, in principle, all companies incorporated under the Dutch Civil Law, are deemed to be tax resident in the Netherlands.

Basis – Corporate income tax is levied on worldwide income.

Tax rate – Corporate tax is levied at 19% on the first EUR 200,000 of taxable profits, and 25.8% on the rest.

Capital gains – Capital gains are treated as ordinary income and taxed at the standard rate. However, capital gains derived from the disposal of holdings may be tax-exempt provided that the Dutch company holds at least 5% of the shares, and the participation is not held as a portfolio investment, among other conditions.

Dividends – Dividends received are subject to Corporate Income Tax. However, as with capital gains, if the Dutch company holds at least 5% of the shares, the participation is not held as a portfolio investment, and the subsidiary is subject to a reasonable effective tax rate, dividends received may be tax-exempt.

If distributed profits are tax deductible by the subsidiary, for instance under the EU’s Parent-Subsidiary Directive, the tax-exemption may not apply.

If the participation exemption is not available, a credit for the underlying tax may be obtained.

Interests – Interests are subject to corporate income tax.

Royalties – Royalties are generally subject to corporate income tax.

Withholding Taxes – Dividends paid to resident or non-residents are usually subject to a 15% withholding tax unless the tax rate is reduced or exempted under a tax treaty or exempted under the EU parent-subsidiary directive.

Currently, there is no withholding tax on interests, royalties and technical fees.

Foreign-source income – Certain foreign-source income such as foreign branch income or real estate income may be exempted or excluded from the tax base.

Double taxation of foreign dividends, interest and royalties is relieved by a tax credit provided by Dutch tax treaties or unilaterally if the payer is a resident of a developing country designated by Ministerial Order. If no relief applies, a deduction of the foreign tax paid is allowed.

Dividends and capital gains that qualify for the aforementioned participation exemption may not be subject to taxes.

Losses – Losses arising from taxable income may be carried forward for 9 years and carried back for 1 year.

Inventory - Inventory may be valued at the lower of acquisition/production costs or market value. First in first out (FIFO), Last in first out (LIFO) or average cost methods are generally permitted.

Anti-avoidance rules – There is transfer pricing legislation in Luxembourg. Transactions between related entities have to be governed by OECD’s arm’s-length principle and must be documented.

Acceptable transfer pricing methods include the comparable uncontrolled price, resale price, cost plus, profit split and transactional net margin methods. It is possible to enter into an advance pricing agreement for the use of certain transfer pricing methods.

There are no thin capitalization rules.

Netherlands has implemented certain tax law modifications to meet OECD’s BEPS standards and has conscripted to local law the EU Anti-Tax Avoidance Directive 1 (ATAD1).

Anti-avoidance measures include the introduction of controlled foreign company (CFC) rules – certain non-distributed income of a CFC, namely dividends, interests, royalties, certain capital gains, and other income, will be subject to Dutch corporate tax.

CFC rules are applicable to the aforementioned income type accrued by foreign subsidiaries located in low-tax jurisdictions, in which a Dutch company has a 50% or more interest, or by a low-taxed foreign permanent establishment.

Low-tax jurisdictions are those that have no corporate income tax or have corporate income tax lower than 9%, or jurisdictions that are considered non-cooperative jurisdictions for tax purposes by the EU. The Dutch Ministry of Finance publishes a list every year of jurisdictions to which CFC measures apply.

Certain exceptions apply if a subsidiary’s passive income is less than 30% of its total income or if the subsidiary meets certain economic substance requirements in its jurisdiction of establishment – such as salary expenses of over EUR 100,000 and office space for a period of 24 months. Note that Dutch tax authorities will no longer grant tax rulings for transactions with companies established in the aforementioned low-tax jurisdictions.

Anti-avoidance provisions also include the so-called ‘earnings stripping rule’ for groups, which limits the deductibility of net interest expenses (interest revenue – borrowing costs) up to 30% of taxable profits. Net interest expenses up to EUR 1,000,000 (lower than EU standards) are not caught by the earnings stripping rule. Non-deductible interest expenses will be allowed to be carried forward indefinitely.

In addition, a 20.5% withholding tax on royalty and interest payments to low-tax jurisdictions included in the aforementioned list published by the Dutch Ministry of Finance.

Labor taxes –National Insurance Tax, Employee Insurance Contribution, and Dutch Health Insurance are paid by both the employer and employee. The employer must withhold social security contributions from the employee’s salary at an aggregate rate of 27.65% (2018) calculated on the first EUR 33,994 (2018) of each employee’s gross salary.

Tax credits and incentives – There are additional deductions available for investments in energy-efficient assets and environmental assets. Companies conducting certain R&D activities may be eligible for a reduction of wage taxes.

An exemption from corporate taxes may apply to investment funds whose profit is made available to the shareholders and holders of certificates of participation no later than eight months after year-end, as well as for funds whose investments are limited to financial instruments such as shares, bonds, options, and futures traded on qualifying stock markets.

An IP Box regime applies with respect to profits, including royalties, derived from a self-developed intangible asset. In such caes, a company may elect, fulfilling certain conditions, for the application of a lower effective rate on taxable profits derived from qualifying intangible assets. The effective tax rate of the innovation box is 9%.

Personal income tax – An individual is deemed to be tax resident in the Netherlands based on a series of facts and circumstances such as permanent home, employment duties, family residence, registration with local authorities, local bank accounts and local assets and the intended length of stay in the Netherlands.

Foreigners have usually deemed tax residents if their family is residing in the Netherlands or if they stay in the Netherlands for more than 1 year. However, expats may opt for several tax benefits if they fulfill certain conditions.

Tax residents are subject to tax on their worldwide income.

Employment, enterprise and housing income is taxed at progressive rates of 36.55% up to 51.95%, although a 14% base deduction may apply for entrepreneurs. Interests are taxed at 25% and income from savings and investments is usually taxed based on a fixed presumed gain (assets minus debt) at a rate of 30%. Calculation of presumed gains is based on past market returns realized.

Capital gains are usually taxed at progressive rates 36.55% up to 51.95%, exceptions may apply.

Other taxes – Transfer of immovable property is usually taxed at 6%. There is a municipal tax levied on real property. Inheritances received from Dutch residents are taxed at rates between 10% and 40%.

There is a landlord tax, charged to landlords that rent out more than 50 houses.

The sale of goods and services are subject to V.A.T. at a standard rate of 21%. Reduced rates and exemptions may apply.

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 25% Offshore Income Tax Rate
  • 25% Corporate Tax Rate
  • 25% Capital Gains Tax Rate
  • 25% Dividends Received
  • 15% Dividends Withholding Tax Rate
  • 0% Interests Withholding Tax Rate
  • 0% Royalties Withholding Tax Rate
  • 1 Losses carryback (years)
  • 9 Losses carryforward (years)
  • FIFOLIFOAverage cost Inventory methods permitted
  • 119 Tax time (hours)
  • 9 Tax payments per year
  • 13.8% Social Security Employee
  • 13.8% Social Security Employer
  • 51.95% Personal Income Tax Rate
  • 21% VAT Rate
  • 124 Tax Treaties

Country details

Netherlands
EUR
Amsterdam
Europe
nl-NL, fy-NL
16,645,000

The Kingdom of the Netherlands is a transcontinental sovereign state. Its main jurisdiction is the Netherlands, located in northwestern Europe, member of the BENELUX and the European Union, known for a flat landscape of canals, tulip fields, windmills, and cycling routes. It borders to the north and west with the North Sea, to the south with Belgium and to the east with Germany.  The Kingdom also comprises the constituent Caribbean territories of Aruba, Curaçao, Sint Maarten and the dependent special municipalities of the Caribbean Netherlands (Bonaire, Sint Eustatius, and Saba).

Frequently known by the name of its most influential and relevant historical region, Holland, the country is one of the most densely populated areas in the world, with 41 543 sq. km and 17 million inhabitants. Its capital is Amsterdam, although The Hague is the seat of government. Its official language is Dutch, but English is widely spoken among its population. Other regional languages include Frisian and Papiamento. The legal tender currencies of the Kingdom are the Euro (EUR) in the Netherlands, the US Dollar (USD) in the Caribbean Netherlands, the Aruban Florin (AWG) in Aruba, and the Netherlands Antillean Guilder (ANG) in Curaçao and Sint Marteen.

Netherlands is one of the most developed states worldwide, ranking seventh in the Human Development Index (HDI) (2016). Its economy is characterized by stable industrial relations, low unemployment, a surplus in the trade balance, being an important commercial hub in Europe. In the industrial activity predominates the agro-industries, steel products and aluminum, metal and engineering, machinery and electrical equipment, bulk chemicals, natural gas, petroleum products, construction, transportation equipment, microelectronics, and fishing.

A highly mechanized agricultural sector employs only about 2% of the labor force but generates large surpluses for the food industry and for export, being the third worldwide. Its main agricultural products are dairy products, poultry, meat, livestock, flower bulbs, flowers, vegetables and fruits, sugar beets, potatoes, wheat, barley.

The Services sector accounts almost three-quarters of the GDP, and mainly comprised of tourism, commerce, hotels, restaurants, transportation, storage, and communications and financial services (banking and insurance).

The Netherlands has an attractive tax regime for tax optimization, attracting the establishment of holding companies, which under certain conditions may not pay taxes on the dividends and profits received from their subsidiaries. In addition to being one of the countries with more tax treaties to avoid double taxation.

Tax treaties

Country Type Date Signed
Uruguay TIEA 2012-10-24
Canada DTC  1986-05-27
Estonia DTC  1997-03-14
Slovenia DTC  2004-06-30
Cook Islands TIEA 2009-10-23
Ethiopia DTC  2012-08-10
Hungary DTC  1986-06-05
Kyrgyzstan DTC  1986-11-21
Kuwait DTC  2001-05-29
Liechtenstein TIEA 2009-11-10
United Kingdom DTC  1980-11-07
Greece DTC  1981-07-16
Tajikistan DTC  1986-11-21
Germany DTC  1959-06-16
Ukraine DTC  1995-10-24
Kosovo DTC  1982-02-22
Czech Republic DTC  1974-03-04
Chinese Taipei DTC  2001-02-27
Uganda DTC  2004-08-31
China DTC  1987-05-13
Sint Maarten DTC  1964-10-28
Indonesia DTC  2002-01-29
Qatar DTC  2008-04-24
Georgia DTC  2002-03-21
Saint Kitts and Nevis TIEA 2009-09-02
Nigeria DTC  1991-12-11
Australia DTC  1976-03-17
Bahrain DTC  2008-04-16
Serbia DTC  1982-02-22
Latvia DTC  1994-03-14
South Africa DTC  2005-10-10
Bermuda TIEA 2009-06-08
Finland DTC  1995-12-28
Anguilla TIEA 2009-07-22
France DTC  1973-03-16
Azerbaijan DTC  2008-09-22
Turkey DTC  1986-03-27
Belize TIEA 2010-02-04
Malta DTC  1977-05-18
Antigua and Barbuda TIEA 2009-09-02
Japan DTC  2010-08-25
Aruba DTC  1964-10-28
Sweden DTC  1991-06-18
Hong Kong, China DTC  2010-03-22
Portugal DTC  1999-09-20
Switzerland DTC  2010-02-26
Seychelles TIEA 2010-08-04
San Marino TIEA 2010-01-27
Ghana DTC  2008-03-10
Marshall Islands TIEA 2010-05-14
Brazil DTC  1990-03-08
Belarus DTC  1996-03-26
Ireland DTC  1969-02-11
Saudi Arabia DTC  2008-10-13
Russian Federation DTC  1996-12-16
Korea, Republic of DTC  1978-10-25
Andorra TIEA 2009-11-06
Turks and Caicos Islands TIEA 2009-07-22
Jordan DTC  2006-10-30
Austria DTC  1970-09-01
Grenada TIEA 2010-02-18
Liberia TIEA 2010-05-27
Bulgaria DTC  1990-07-06
Argentina DTC  1996-12-27
Venezuela DTC  1991-05-29
Mexico DTC  1993-09-27
Norway DTC  1990-01-12
Saint Lucia TIEA 2009-02-12
Pakistan DTC  1982-03-24
Former Yugoslav Republic of Macedonia DTC  1998-09-11
United States DTC  1992-12-18
Spain DTC  1971-06-16
Denmark DTC  1996-07-01
Zambia DTC  1977-12-19
United Arab Emirates DTC  2007-05-08
Thailand DTC  1975-11-09
Zimbabwe DTC  1989-05-18
New Zealand DTC  1980-10-15
Armenia DTC  2001-10-31
Moldova, Republic of DTC  2000-07-03
Uzbekistan DTC  2001-10-18
Curaçao DTC  1964-10-28
Kazakhstan DTC  1996-04-24
Dominica TIEA 2010-05-11
Bosnia and Herzegovina DTC  1982-02-22
Singapore DTC  1971-02-19
Tunisia DTC  1995-05-16
Bangladesh DTC  1993-07-13
Israel DTC  1973-07-02
Malawi DTC  1969-06-18
Croatia DTC  2000-05-23
Montserrat TIEA 2009-12-10
Cayman Islands TIEA 2009-07-08
Samoa TIEA 2009-09-14
Italy DTC  1990-05-08
Philippines DTC  1989-03-09
Albania DTC  2004-07-22
Lithuania DTC  1999-06-16
Mongolia DTC  2002-03-08
Suriname DTC  1975-11-25
Saint Vincent and the Grenadines TIEA 2009-09-01
Bahamas, The TIEA 2009-12-04
Romania DTC  1998-03-05
India DTC  1988-07-30
Sri Lanka DTC  1982-11-17
Montenegro DTC  1982-02-22
Viet nam DTC  1995-01-24
Oman DTC  2009-10-05
Guernsey TIEA 2008-04-25
Barbados DTC  2006-11-28
Costa Rica TIEA 2011-03-29
Panama DTC  2010-10-06
Monaco TIEA 2010-01-11
Iceland DTC  1997-09-25
Jersey TIEA 2007-06-20
Luxembourg DTC  1968-05-08
Egypt DTC  1999-04-21
Belgium DTC  2001-06-05
Poland DTC  2002-02-13
Gibraltar TIEA 2010-04-23
Isle of Man TIEA 2005-10-12
Slovakia DTC  1974-03-04
Malaysia DTC  1988-03-07
Morocco DTC  1977-08-12

Tax treaties Map

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