The private limited liability company (Dutch BV) holding structure in the Netherlands
Updated on 16 January 2025
If you wish to set up a business in the Netherlands, the Dutch BV is by far the most chosen company type by foreigners. This legal entity provides you with limited personal liability because it is legally seen as a separate entity that can enter into contractual agreements with others. Next to that, it is possible to establish a Dutch BV entirely remotely. This means that you can start your business activities in just a few working days if you provide us with a power of attorney to act on your behalf.
A Dutch BV is the same as a private limited liability company and can also be incorporated in a so-called holding structure, where you own a parent company with one or more operational companies under its wing. This is a very popular way to do business in the Netherlands, as you can reap certain tax benefits and protect your assets in the safest way possible.
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What is a limited holding company?
The Dutch BV is an incorporated company and therefore also a legal entity. More than 99% of our clients choose this company type for solid reasons. The BV company is an entity in which assets are divided via shares, which can be in the hands of one or multiple shareholders. If you are the director and shareholder, then you are employed by your own company. You have to pay your salary regularly, the minimum amount is currently 56,000 euros in 2024. Keep that in mind when you want to establish a Dutch BV. A BV is commonly interesting if you generate at least 100,000 euros in profits each year or exceed this amount. That’s when the tax benefits start to become interesting. In addition to paying yourself a salary, you can also build up capital in the BV by reserving profits. As we already discussed above, you are not personally liable for debts or bankruptcy, instead the BV will be held liable. As a shareholder, you can lose the capital you have invested in the BV, but creditors cannot claim private property such as your house, car or savings. You do need to remember that you will be held liable if the debts or bankruptcy can be easily traced back to your actions, such as fraud or improper management.
Since the BV is an incorporated type of business, only a notary public may establish a BV. The notary draws up the deed of incorporation and describes the articles of association (internal rules) of the company together with you. Topics in the AoA can include, but are not limited to:
- The purpose of the company
- The activities of the company
- The specific responsibilities of the management
- The amount and types of shares
As a legal entity, the BV has the obligation to report the profit that it generates, which is the turnover minus purchases and costs. When considering costs, also consider the salary of the director and other employees. The tax on the profit is called corporate income tax. The BV pays 19% corporate income tax on profits up to 200,000 euros. For profits above 200,000 euros, the rate in 2025 will be 25.8%. This is considered to be a low rate in the European Union, as some other countries have much higher rates. The Netherlands is actually in the top 5 of the best European countries for corporate tax due to its relatively low rate. This is also why the BV is popular amongst foreign entrepreneurs. After paying corporate income tax, the BV can add the remaining profit to reserves or equity. The meeting of shareholders can also decide to make a profit distribution, and as a shareholder, you will then receive dividends. The BV will withhold 15% of the dividend tax from the distribution. Do you have a significant interest as a shareholder? Then you pay 24.5% tax on the first 67,000 euros and 33% on everything above 67,000 euros. You may offset the dividend tax withheld by the BV in the tax return.
What is the general structure of a holding BV, and what does limited structure mean?
The holding structure saves money and mitigates business-related risks, which is why many foreign entrepreneurs decide to incorporate this particular business type. As a minimum, the holding structure includes two companies: one is the active company that performs business operations, and the other is a personal company holding shares issued by the active company. The law does not differentiate between BVs with respect to their function, therefore the terms operating BV and holding BV have no legal meaning. But it is easier to differentiate between the two to be able to explain how the structure works, so in this article we will speak of a holding BV and an operating BV to make the distinction between both clear.
These two (or more) Dutch BVs are incorporated by using the services of a notary. The owner of the business holds all shares issued by the holding, which, in turn, holds the operating BV’s shares. Our explainer video explains different aspects of the Dutch BV and the holding structure. If two shareholders (SH 1 and SH 2) plan to set up a single active company and to hold equal amounts of its shares, the usual scenario is the following: one active BV performing real business operations is incorporated using the services of a notary. Then two holding companies are incorporated above the active company. Both of them own 50% of the active BV. Holding 1 is then fully owned by SH 1, while holding 2 is fully owned by SH 2. Take a look at the video below for more information.
Main examples and advantages of the Dutch BV holding structure
The Dutch holding offers two main advantages to entrepreneurs with respect to their businesses: a lower tax burden and decreased business risks. The reason for the lower tax burden is the fact that holding structures may provide tax advantages.
The main benefit is the Dutch participation exemption (“deelnemingsvrijstelling” in Dutch).
For instance, profits generated by selling the active company and transferring them to the holding company are exempt from profit tax. Also, operating from a local holding structure involves a lower level of risk. The holding BV serves as an additional layer between the owner of the business and the actual business activity. Your holding structure can be set up to protect the equity of the company. You can accumulate pension provisions and profits safeguarded from business risks. Furthermore, when you sell (partially or entirely) the shares issued by your operating BV, the profits from the sale are then transferred to the holding BV. Holding companies do not pay taxes on realized profits from selling shares issued by operating BVs. The resources accumulated by the holding can be used for reinvestment in another business or retirement benefits. If you own shares of the active company but have not yet established a holding, you will need to pay 19%, or 25.8% corporate income tax with respect to the profit in 2025.
Intercompany Solutions can establish your Dutch BV holding company in just a few business days
A Dutch BV holding company is a great choice if you value tax benefits and the opportunity to mitigate risks as much as possible. If you are an active entrepreneur who likes to invest in different niches and markets, then the holding structure might be very beneficial for you.
Intercompany Solutions is always ready to provide you with the necessary advice and guidance on your entrepreneurial journey in the Netherlands, making sure that everything goes smoothly. Beyond company formation, we provide comprehensive business support services:
- Legal compliance and advisory
- Financial administration and tax returns
- Strategic business planning
- Operational management guidance
- Day-to-day business support
Our team of experts ensures your business runs smoothly while you focus on growth and development. Please take a look at our extensive array of services, or contact one of our agents directly for more information and personalized advice.
