Holding Structure in Holland is a secure and cost-effective way to start a business in Holland.
A holding is a legal entity that only holds assets, e.g., trade companies share.
Therefore, a holding company does not carry any liability or risk associated with its operations.
A subsidiary is an entity actively involved in services or trade.
It performs business activities and, therefore, carries liability for its operations.
This means that creditors, suppliers and other parties may file claims against it.
On the other hand, the holding entity with its assets is safe from claims.
The combination of a subsidiary and a holding in one structure results in the so-called holding structure.
Below are the main characteristics of a Dutch BV Holding Structure:
• the holding structure includes two separate private limited companies (BVs);
• one of the BVs is a subsidiary and engages in business activities.
• the other BV is a holding without any business activity.
• the investor/entrepreneur owns the holding’s shares.
• the holding company owns the subsidiary’s shares.
REASONS TO INCORPORATE A BV HOLDING STRUCTURE
Holding Structure in Holland Entrepreneurs prefer to set up their businesses as holding structures for two principal reasons: risk and tax.
First, you reduce risk by operating via a holding structure in the Netherlands.
A holding BV provides an additional layer of protection between the business owner, as an individual, and his/her business activities.
BVs can also be structured to protect the capital of the active company.
Accumulated pension provisions and profit are thus shielded from business risks.
Second, holding structures may provide tax advantages.
The most significant one is the so-called participation exemption. It allows the owner to sell the company and transfer the profit to the holding BV without paying profit tax.
WHEN SHOULD I CONSIDER ESTABLISHING A HOLDING STRUCTURE FOR MY BUSINESS?
• if it is very likely that your company will one day be sold. You can then transfer the profit from selling the
company to the holding BV free of tax, by virtue of the Dutch participation exemption.
• if you need risk protection for your capital
• if you want a fiscally flexible company structure.
Holding Structure in Holland
