What are the advantages of setting up an offshore company in The Netherlands?

Here are the best Netherlands advantages on offer to you

An excellent European option for international trade.

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Setting up your business in the Netherlands

The Netherlands is a very attractive business location that offers a wide variety of advantages to investors who want to open a company in Netherlands.
The country is a dynamic center for trade activities and industry, complete with a stable economy. The Netherlands has a highly educated workforce: employees are multilingual and motivated, and it also has an excellent geographical location in Europe.
Tax incentives for those who open a business in the Netherlands
The Netherlands is an attractive location to open a business also because of the incentives available to companies, most importantly in research and development. The Innovation Box is a regime that allows the taxpayer to choose a lower tax rate on taxable profits derived from intangible assets. The regime is subject to certain criterion and it applies in general to profits derived from innovative activities, thus the name.

Investors who open a company in the Netherlands that activates in the research and development sector can reduce the costs associated with these specific types of activities and they can use a scheme that allows them to minimize the payroll tax and the national insurance contributions that are to be remitted. In order to benefit from the R&D reductions, applicants must file an online application and then fill in the R&D statement.

The benefits of starting a business in the Netherlands

Many global investors and entrepreneurs consider starting a business in the Netherlands. In this guide we explore the Netherlands as a jurisdiction to start a company. Here are some of the benefits of establishing a business in the Netherlands:

Shareholders carry no personal liability for the debts of the company. In principle, the risks are limited to their investments in the business.
The minimum share capital required to establish a BV used to be EUR 18 000 (before October 01, 2012), but it was reduced to just 1-euro cent. Now it is easy to establish a new business.

The corporate income tax rate in the Netherlands is 19% (increased from 15% effective from 1 January 2023) on profits up to EUR 200,000 (reduced from EUR 395,000 effective from 1 January 2023) and 25.8% (increased from 25% effective from 1 January 2022) on the excess.

No value added tax (VAT) for transactions between member states of the EU.
No taxes on interest, royalties and dividends.
The Netherlands has developed a comprehensive network of treaties for the avoidance of double taxation. Thus companies can benefit from reduced rates of withholding taxes on interest, royalties and dividends transferred to companies established in the country and minimum taxation of capital gains arising from share sales in the source country (pacts with close to a hundred different jurisdictions).

The participation exemption is among the most commonly used advantages with respect to taxation. This tax regulation exempts from tax holding entities owning at least five percent of a subsidiary in case of transfer of dividends. The regulation is known as “the directive on parent companies and subsidiaries”.

Participation exemption for international companies – The exemption gives an additional advantage to companies operating internationally if the subsidiary company is located in another country. The international subsidiary’s profit is subject to tax in the country where it is established. The profit after tax can then be transferred to the parent company in Holland. This amount, received by the parent company, will NOT be subject to corporate tax in Holland.
The Netherlands are ranked as the 5th most innovative and competitive country in the world by the World Economic Forum and the 3rd best country in the world for business by Forbes Magazine.
The Netherlands has recently attracted many businesses and multinationals from the UK regarding Brexit.
The greatest number of treaties for double tax avoidance worldwide.
Outstanding international business atmosphere.
According to a recent investigation by G. Thorton, starting a business in the Netherlands is one of the best choices for foreign investors.
The country welcomes foreign entrepreneurs and investors: from small enterprises to multinational companies included in the Fortune 500 list.
The Netherlands attracts international companies from all sectors with its stable legislation and politics, coupled with excellent international relations.
The BV holding structure

Entrepreneurs prefer to start their Netherlands businesses as holding structures for two principal reasons: risk and tax.

First, you reduce risk by operating via a holding structure in the Netherlands. A holding BV provides an additional layer of protection between the business owner, as an individual, and his/her business activities. BVs can also be structured to protect the capital of the active company. Accumulated pension provisions and profit are thus shielded from business risks.

Second, holding structures may provide tax advantages. The most significant one is the so-called participation exemption. It allows the owner to sell the company and transfer the profit to the holding BV without paying profit tax.

The Dutch stak structure

A Dutch Stak Structure is a Dutch Holding Structure, where a Dutch foundation acts as the sole shareholder of the Dutch Holding Company, thus becoming an asset protection vehicle, limits disclosure of ownership, functions as an inheritance planning vehicle, amongst others.

The foundation is another legal entity which can be used as a commercial entity, a holding entity or family funds. It is possible for a foundation to own shares and real estate and it is also allowed to obtain profits. Under certain strict conditions, a foundation can be exempt from Dutch taxes. A foundation can even be exempt from accounting and/or reporting requirements. When a foundation is concluded under a notary agreement, the foundation will be limited in liability.

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