Dubai has 9% corporate tax and free zones with 0% on qualifying income. It is also a trade centre between Asia, Africa and Europe. A Dutch company is a European company. It is inside the single market and the customs union, and it can use the EU licence passport and the Dutch tax treaties.
The two countries are used for different things. Groups use Dubai for regional trade and for activities that can be done from any country. They use the Netherlands to do business in Europe: imports, licences, employees and European business partners. Most groups therefore use both and plan how the two companies work together.
Why you need an EU company for Europe
Under every European rule made since 2021, a party established in the EU is responsible. Examples are the importer of record, the authorised CBAM declarant and the EUDR operator. Others are the GPSR responsible person and the licensed payment institution. A company in the Gulf is outside these roles, whatever its tax rate. Groups that sell in Europe therefore need a European company. The Dutch BV is the standard choice because of Rotterdam, the licence system, business in English and incorporation from abroad.
Dividends and other payments between the two companies
The Netherlands charges a withholding tax on payments to related companies in countries on its list of low-tax jurisdictions. The UAE was taken off that list on 1 January 2024. In normal situations, payments to a UAE company are therefore free of the tax. It can still apply if the structure is artificial. Decide on the ownership and the payments between the two companies before the Dutch company is set up. The Netherlands-UAE tax treaty is part of that plan.
The structure most groups choose
Most groups put regional trade, holding functions and their Gulf business in the UAE company. They put European imports, licences, contracts and staff in the Dutch BV. Plan the link between the two companies once and in writing, for withholding tax, transfer pricing and substance. You can read more about the European side on EU market entry.
Frequently asked questions
Is Dubai's 9% rate the end of the comparison?
This rate is one part of the comparison. The rate is attractive for activities that a group can run from any country. For sales in Europe, EU rules apply. Several EU rules require a company established in the EU. Examples are the carbon border levy (CBAM), the deforestation rules (EUDR), product safety (GPSR), payment licences and the importer of record. Groups that sell in Europe therefore need an EU company, wherever their other companies are.
Does the Dutch withholding tax apply to payments to the UAE?
In normal situations, these payments are free of this tax. The UAE has been off the Dutch list of low-tax countries since 1 January 2024. The tax can still apply to artificial structures. Plan the payments between the Dutch BV and the UAE company before you set up the BV.
Can a group run both jurisdictions?
Yes, this is the most common structure. The UAE company has the trade with the Gulf region and the holding functions. The Dutch BV has the European operations, licences and contracts. Plan the link between the two companies once, for withholding tax, transfer pricing and substance.
Which entity should come first?
Start with the company that your next contract needs. If you sell in Europe, apply for an EU licence or import goods, set up the Dutch BV first. Add the Gulf company when there is enough regional trade for it.
Design the structure, then incorporate
We set up the Dutch part of international structures: the BV, the holding and the ownership chain. You get a written plan that includes your companies in the Gulf or elsewhere.
Start your Dutch BVSources
- UAE Federal Tax Authority, corporate tax framework.
- Rijksoverheid, list of low-taxed and non-cooperative jurisdictions 2026 (conditional withholding tax).
- Belastingdienst, Dutch corporate income tax and participation exemption.
- Government of the Netherlands, Tax treaty countries.
Last reviewed 13 August 2026. The rates and rules are based on the published law on that date. The law in both countries changes over time. Base your decision on a written analysis of your own numbers.