The Netherlands has a favorable trading environment and a stable economic situation that attracts investors from different countries. Business in the Netherlands is famous for its export orientation. The main part of the economy is based on the food industry and financial sector.
Advantages of registering a company in the Netherlands:
- Developed infrastructure provides simplicity, convenience of import/export of goods and free access to the European market;
- The Netherlands has double taxation treaty agreements with many countries including the United States;
- Possibility to open a bank account in the leading world banks (ING bank, ABN Amro, Rabobank);
- The Netherlands provides reduced tax regime for intellectual property products;
- The corporate income tax in the Netherlands is 20% up to EUR 200.000 profit a year, the profit of EUR 200.000 and more is taxed at 25%;
- Between European countries, goods and services may be offered at a 0% VAT rate. Corporations with a VAT number may claim back the VAT;
- Dividends and capital gains remitted to a resident parent company are tax exempt, if less than 50% of the assets are passive;
- Life in general in the Netherlands is ranked quite highly according to the OECD Better Life Index.
Types of companies:
- Besloten Vennootschap (BV) is a private limited liability company;
- Commanditaire Vennootschap (CV) is a limited partnership;
- Naamloze Vennootschap (NV) is a public limited company;
- Vereniging – Association;
- Stichting – Stock Company;
- Branch – Branch of a foreign company;
- Vennootschap Onder Firma (VOF) – Unlimited Partnership.
The following conditions must be met for a holding company in the Netherlands to be a subject to the “Double Tax Exemption Rules”:
- The company must own at least 5% of the shares of the foreign branch. Any company that carries out trading activities and at the same time owns a stake in another company may consider itself a holding company, which will allow it to enjoy the same tax advantages;
- The company must hold shares from the beginning of the financial year in which it wishes to benefit from the agreements;
- The foreign branch must pay income taxes at the place of registration, no matter how low the tax rates will be;
- The parent company should actively participate in the management of the foreign branch. The foreign branch should not be “a company exempt from portfolio investment tax”, as these rules do not apply to such companies.