Dutch Company Formation

Reduced corporate income tax rates and new state initiatives aimed at reducing the risk of non-payment from customers, makes Dutch Company Formation an increasingly attractive proposition.

The Netherlands has long been a favourite home for foreign investors and these new government policies increase the appeal for companies considering setting up business in Holland. Due to a stable and successful economy and a trade and investment policy that is one of the most open in the world, thousands of international companies have already experienced the many benefits of Company Incorporation in the Netherlands.

Netherlands Corporate Tax Income Lowered to 20%

In order to stimulate the economy, the corporate income tax rates have been lowered to 20% on the first EU200,000 profit in the years 2009 and 2010. Any additional profits will be taxed with 25.5%.

Due to the increasing competition between countries in Europe to attract foreign investors, it is expected that corporate income taxes will remain at a low level for the years after 2010. At the moment the Netherlands has one of the lowest corporate tax rates in Western Europe which demonstrates their commitment to attract additional Dutch Company Formation investment.

The Netherlands Is a Tax Paradise

Although Dutch Employees might not agree on this, the Netherlands is a tax paradise for foreign companies seeking Company Incorporation.

The primary factors driving this are:

  • Dividends and capital gains from subsidiary companies are not taxed
  • There are no withholding taxes on outgoing interest and royalties
  • Tax treaties with almost 90 countries reduces dividend withholding tax, often to 0%!
  • Rulings by the Dutch tax authorities provides certainty of (low) taxation of your activity Income from group financing activities is taxed at only 5% (“group interest box”)
  • The attractive low corporate tax rate of only 20% (profits greater than EUR200,000: 25.5%)
  • The 30% facility substantially lowers the wage taxes for ex-patriate workers
  • Regular importers do not have to pay VAT on their imports (“article 23 facility”)
  • Non-working partners of expatriate workers get a yearly tax refund of more than EUR2,000

Clearly, the Netherlands welcomes foreign investors considering Dutch Company Formation as part 成立有限公司 of an expansion program.

Dutch government offers extra warranty for risk of non-payment

Due to the current economic crisis the risks of non-payment by companies has increased. As a result, credit insurance companies have lowered the maximum insured credit limits. Obviously, this hampers business to business transactions. To stimulate trading activity, the Dutch government has introduced a temporary additional state insurance.

Companies with a credit insurance policy can now request for an increase of the lowered credit limit. The government covers up to 2 times the new credit limit of the insurance company, however not more than the previous credit limit.

For example:

A credit insurance company lowers a credit limit for a customer from EU70,000 to EU30,000. In that case your company can apply for an additional state covered credit limit of EU30,000. For this additional coverage an extra premium must be paid. Your insurance company can inform you about the details.

The additional state insurance covers domestic and foreign trade and runs until the end of 2009. This is another positive step that will help to make Dutch Company Formation an even more attractive proposition for potential foreign investors.

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