Setting Up a Subsidiary in Europe: Country, Costs, Steps

A subsidiary in Europe is a company inside the EU that your company owns. It signs contracts with European customers, imports goods under its own name, holds the VAT number, employs local staff and pays corporate tax where it is based. Your company abroad stays the parent. Customers, banks, marketplaces and tender boards treat the subsidiary as a normal European company, and that is the reason most companies set one up: the market asks for a European counterparty, and a branch or a foreign VAT registration no longer satisfies that ask.

Three decisions come in order. Which country. Subsidiary or branch. Then the setup itself, with the bank account and the registrations. This page takes them in that order and ends with what the Netherlands looks like in practice, because that is where Holdwise sets subsidiaries up, fully remote, for parents on every continent.

19%

Dutch corporate tax on the first €200,000 of profit; 25.8% above

3 weeks

from complete documents to a registered Dutch subsidiary, nobody travels

Dutch tax on dividends to a treaty-country parent that owns at least 5%

Which country for a European subsidiary

The candidates that come up in almost every board discussion are the Netherlands, Ireland, Germany, Luxembourg and Estonia, with Portugal and Spain when the founder wants to live there. The table compares what decides the choice for a parent company abroad: the headline tax rate, the minimum capital, whether the whole setup can be done from abroad, how long it takes, and whether the authorities work in English.

Country	Corporate tax	Minimum capital	Setup from abroad	Time	English at the authorities
Netherlands (BV)	19% up to €200,000, 25.8% above	€0.01	Yes, video identification and power of attorney	About 3 weeks	Yes: KVK, tax office and notary
Ireland (LTD)	12.5% on trading profit; 15% for large groups	€1	Yes, but a director resident in the EEA or a bond is required	1 to 2 weeks after papers	Yes
Germany (GmbH)	About 30% including trade tax	€25,000 (UG from €1)	Notary appointment, online possible for cash formations	4 to 8 weeks including the bank	Mostly German
Luxembourg (SARL)	About 24% combined	€12,000 (SARL-S from €1)	Notary, usually with a local agent	2 to 4 weeks	French, German and English
Estonia (OÜ)	0% on retained profit, 22% on distribution	€0.01	Yes, through e-Residency	Days	Yes
Portugal (Lda)	About 20%; lower on the first €50,000 for small companies	€1	Tax number and local representative needed first	1 to 2 weeks after the tax number	Portuguese, English in practice
Spain (SL)	25%; 15% in the first profitable years for new companies	€1	Foreigner ID number needed first; notary in person or by power of attorney	2 to 4 weeks	Spanish

Headline rates and standard setups as at September 2026. Every country has conditions and exceptions; we check the detail for your case in the written proposal.

How to read the table for your company

You sell or ship goods across several EU countries. The Netherlands. One Dutch VAT number plus the One Stop Shop covers consumer sales in the whole EU, and the Article 23 licence means you pay no import VAT at the border. Only the Netherlands and Belgium offer that licence. Rotterdam and Schiphol put the stock within a day of most of the EU.
You sell software or services and can place a director in Europe. Ireland is the usual comparison. The 12.5% rate is real, but so is the director requirement, and Ireland sits at the edge of the EU for logistics.
Your customers are German and want a German company. Germany. Accept the capital, the notary and the slower bank.
You hold shares in several European companies. The Netherlands or Luxembourg. The Dutch participation exemption leaves dividends and sale profits from subsidiaries untaxed at the holding, and the treaty network is one of the largest in the world. See the best country for a holding company.
The founder wants to live in Europe as well. Then the residence permit decides, not the company. See the best EU country for non-EU founders.

Subsidiary or branch

A subsidiary is a separate legal person. Its debts are its own, it files its own tax return, and it opens its own bank account. A branch is your foreign company registered in the trade register of the European country; it has no separate liability, so every claim on the branch is a claim on the parent, and the parent's accounts have to be filed locally as well. Almost every parent chooses the subsidiary. The exceptions are regulated activities where a licence sits with the parent, and temporary projects. The comparison for the Netherlands: branch or subsidiary in the Netherlands.

The Dutch subsidiary, step by step

This is what the setup looks like when Holdwise does it for a parent company in New York, London, Mumbai, Istanbul or Singapore.

The written proposal. You describe what the subsidiary will do, who owns the parent, who will be director and where the staff and the stock will be. You receive one document with the structure, the steps and the complete price. Nothing starts before you accept it.
The documents of the parent. An extract from your own trade register, the articles of the parent, a board resolution to set up the subsidiary and a power of attorney. Documents from outside the EU carry an apostille or a legalisation. Which documents your country needs, and which stamps: documents per country.
Identification. The notary checks the identity of the directors and the ultimate owners by video call. The bank does its own check on the same file, so we prepare that file once and use it twice.
The deed and the KVK. The notary signs the deed of incorporation and registers the subsidiary with the KVK, the Dutch trade register, the same day. The owners go into the UBO register. From here the company exists.
Tax number, VAT number, EORI. The tax office issues the corporate tax number automatically. We apply for the VAT number and, for goods, the EORI number for customs. With the VAT number in hand the subsidiary can apply for the Article 23 licence.
Bank account and address. The subsidiary needs a registered address in the Netherlands and a bank account in its own name. Dutch banks accept foreign-owned companies with a complete file; a payment institution is the faster start while the bank completes its review. Read opening a Dutch business bank account from abroad.
Running it. Bookkeeping, VAT returns, payroll if you hire, the annual accounts and the corporate tax return. Holdwise does this for the subsidiary, in English, on a fee agreed in writing. See corporate services in the Netherlands.

Substance: what makes the subsidiary real

A subsidiary that exists only on paper does not get a bank account, and tax treaties do not protect it. Real means: decisions about the subsidiary are taken by its own director, the books are kept in the Netherlands, it has an address and a contract or a stock position here, and the parent charges it at market prices for anything it supplies. None of that requires a Dutch resident director, but it does require that the director does the job. The detail is in substance requirements for a Dutch BV.

What the parent gets back

Profit stays in the subsidiary at 19% up to €200,000 and 25.8% above. When the subsidiary pays a dividend to a parent that owns at least 5% and is based in a treaty country such as the United States, the United Kingdom, India, Japan or Singapore, the Netherlands usually withholds no dividend tax. When the parent sells the subsidiary later, the sale is taxed in the parent's country under the treaty. The Dutch rules and the treaty rates per country: Dutch withholding tax explained and the Dutch tax treaty network.

From your country

The steps are the same everywhere; the documents, the stamps and the tax treaty differ. The pages per country of the parent: a European subsidiary for a UK company after Brexit, for a US company, for an Indian company, for a Turkish company, for a Chinese company, for a Japanese company and for a Singapore parent. Every other country is on the country list.

Questions parent companies ask

The answers we give in the first call, in writing.

Which country is best for a European subsidiary? +

For most companies from outside the EU the Netherlands, Ireland and Germany are the three serious candidates. The Netherlands fits a company that sells or ships across several EU countries and wants to run the subsidiary from abroad: 19% corporate tax up to €200,000 of profit, no minimum capital, a fully remote setup in about three weeks, English at the tax office and the trade register, and import VAT deferred under Article 23. Ireland fits a company that mainly sells software or services and can place a resident director. Germany fits a company that needs to be German for its German customers and accepts a slower setup.

How long does it take to set up a subsidiary in the Netherlands? +

About three weeks after your documents are complete. The parent signs a power of attorney, the notary checks the identity of the directors by video call, signs the deed and registers the subsidiary with the KVK. The tax number and the VAT number follow. Nobody travels.

Can a foreign parent company own a Dutch BV in full? +

Yes. A BV can have one shareholder, and that shareholder can be a company in the US, the UK, India, Turkey or anywhere else. The director can live abroad too. For a working bank account and for the tax treaties, the subsidiary needs real activity in the Netherlands: a contract, an address, decisions taken here, and books kept here.

Subsidiary or branch in Europe: which one? +

A subsidiary is a separate company with its own liability, its own tax return and its own bank account. A branch is the foreign company itself, registered locally, so every claim reaches the parent. Almost every company chooses the subsidiary: customers, banks and marketplaces treat it as a normal Dutch company, and the parent keeps its risk contained.

What does a Dutch subsidiary cost per year? +

The running costs are the registered address, the bookkeeping with the VAT returns, the annual accounts and the corporate tax return. Holdwise prices the bookkeeping on your volume and the annual accounts per year, and puts the whole amount in one written proposal before you decide.

Does a US company pay tax twice with a Dutch subsidiary? +

No. The subsidiary pays Dutch corporate tax on its own profit. Dividends to the US parent are covered by the tax treaty between the Netherlands and the United States, and a parent that owns at least 5% of the subsidiary usually receives them without Dutch dividend withholding tax. The same treaty logic applies to the UK, India, Japan, Singapore and most other countries the Netherlands has a treaty with.

Do we need a Dutch director? +

No. The director can live abroad. What the bank and the tax treaties look at is where the decisions are taken and where the books are kept. Some parents appoint a second, local director for signing and for the bank; Holdwise can arrange that when the activity justifies it.

Setting up a subsidiary in Europe: which country, what it costs, how it works