The single-company structure
The Asian parent owns one Dutch BV (besloten vennootschap, the Dutch private limited company). This BV does everything: it imports, keeps stock, invoices customers and employs staff. The company has one set of accounts and files one corporate tax return.
The accumulated profit, the brand, the customer relationships and the trading risk are all on one balance sheet. A creditor with a claim against the trade can therefore also reach the accumulated profit.
Adding a holding company
The other option has two Dutch companies in a chain. The parent owns a Dutch holding company, which owns a Dutch operating company.
- The operating company trades: imports, stock, contracts, staff, customers. Corporate tax is charged here.
- The holding company owns the shares in the operating company and receives its distributions. Under the participation exemption, which exempts dividends and gains on holdings of 5% or more from Dutch corporate tax, those distributions are untaxed.
The operating company pays its accumulated profit to the holding, where it is kept apart from the trading risk. Groups often place intellectual property and brand rights in the holding too, and license them to the operating company.
Comparing the two structures
| Objective | Single company | Holding plus operating |
|---|---|---|
| Accumulated profit separated from trading risk | Combined | Separated |
| Brand and IP kept apart from trade | Combined | Separated |
| Selling the operation later | Assets transfer individually | Shares of the operating company transfer |
| Adding a second country | New structure required | New subsidiary under the same holding |
| Annual cost | One set of filings | Two sets of filings |
Distributing to the parent
When the Dutch holding pays profits to the Asian parent, the dividend withholding tax depends on the tax treaty. For Hong Kong the rate is 0% on participations of at least 10%. Read more about the Netherlands-Hong Kong treaty. Singapore has its own treaty with a similar reduction on qualifying participations.
Many groups keep the profit in the Dutch holding and use it to fund European expansion. Only Dutch corporate tax has been paid on this profit. The group decides on a distribution when the parent needs the money.
Pricing between the companies
When your Asian parent sells goods to the Dutch operating company, you agree a price. With that price, you also decide how much profit is taxed in each country. Under Dutch rules, the terms must be what independent parties would agree, and you must document them. The Tax Administration generally expects a distribution company to keep a routine margin that reflects its functions and risks.
The same applies to a licence fee that the Dutch holding charges the Dutch operating company, and to management fees. Set these prices at the start and support them with an analysis. This is much easier than changing them during a tax audit.
When a holding company is worth the cost
A holding company means an extra set of annual filings. It is worth the cost when the group keeps profit in the company for later use, or when the brand has its own value. It is also worth it when you are considering a future sale of the operation, or when a second European country is likely. In other cases, a single operating company under the Asian parent is often enough.
Last verified: 20 July 2026. Sources: Corporate Income Tax Act 1969, article 13 · Belastingdienst.
Does your company want its European entity in the Netherlands? See setting up a Dutch subsidiary for the steps, the costs and a comparison with other countries.
Further reading
See also A Dutch subsidiary under a Singapore parent and Israeli Tech and Dutch Holdings.