In general, there are no restrictions applying to foreigners in particular.
Last modified 13 Mar 2025
From a legal perspective the concept of a permanent establishment does not automatically apply when a foreign person invests in real estate. It is possible for foreign legal entities to set up a permanent establishment by means of registering a branch office. Such branch office is not a separate legal entity.
However, from a Dutch corporate income tax perspective a foreign person investing in Dutch real estate is deemed to havea permanent establishment, irrespective of an actual registration of a branch office, therefore giving rise to Dutch corporate income tax liability,
Registration of a branch office costs €4,000 – €5,000 and it takes 10 days.
The branch office is not a separate legal entity and therefore the governing law of the foreign legal entity applies to the branch office in respect of all corporate legal matters (such as liability of the shareholders, charter documents, responsibility of directors and capital requirements), and if the foreign legal entity under its governing law is required to file annual accounts in its country of origin, then such annual accounts shall also be filed for the branch office with the Dutch Trade Register.
Last modified 13 Mar 2025
Three types of corporate vehicles are commonly used for foreign real estate investments in the Netherlands: the co-operative (Cooperatie), the limited liability company (Besloten vennootschap met beperkte aansprakelijkheid) and the public limited company (Naamloze vennootschap).
In addition, these latter two entities can qualify as fiscal investment vehicles in order to benefit from a special tax regime. The Dutch government, however, intends to prohibit the direct investment in Dutch real estate by fiscal investment vehicles as per 1 January 2025, effectively abolishing the special tax regime for holding of Dutch real estate assets.
Other vehicles often used to make indirect investments in the Netherlands are the Limited Partnership (Commanditaire Vennootschap) and the mutual fund (fonds voor gemene rekening).
Last modified 13 Mar 2025
The B.V. is company with its capital is divided into shares, which are privately registered. It is the most commonly used form of legal entity in the Netherlands. A B.V. is a private limited liability company, meaning that the shareholders are not liable for the company’s debts. The shareholders in general have no liability beyond the payment obligation relating to their shares, unless the by-laws specifically provide such obligations. A B.V. is not required to include a transfer restriction clause in its articles of association; the articles may thus provide that the shares either are or are not freely transferable. The BV’s freely transferable shares can be traded on the public stock market, although traditionally only shares in public limited companies are traded on the public stock market.
An N.V. is also a company with its capital divided into shares. The company's shares can be traded on the public stock market. An N.V. is a limited liability company, meaning that the shareholders are not liable for the company’s debts. The shareholders in general have no liability beyond the payment obligation relating to their shares.
The Co-operative (Coöperatieve U.A.) is a form of association with members. Generally, there is no personal liability of the members (which is indicated by use of ‘U.A.’ in the name of the co-operative). Please note there can also be co-operatives in the Netherlands with a different level of liability for its members to contribute to a deficit upon liquidation, such as the co-operative B.A. (with limited liability of its members to contribute to a deficit) and the co-operative W.A. (with statutory liability for its members ). This overview is limited to the (most commonly used) co-operative U.A. (with exclusion of liability for its members).
This is a method for investing in Dutch real estate using a Dutch-resident entity that qualifies as a fiscal investment vehicle (Fiscale Beleggings Instelling). Under Dutch civil law a fiscal investment vehicle can be either a limited liability company (B.V.) or a public limited liability company (N.V.), but a special tax regime applies. There are certain shareholder and financing criteria that must be met in order to qualify as a fiscal investment vehicle. The Dutch government intends to prohibit the direct investment in Dutch real estate assets by fiscal investment vehicles as per 1 January 2025.
A limited partnership (Commanditaire Vennootschap) is a partnership which distinguishes between its general partners (beherende vennoten) and its limited partners (commanditaire vennoten). The Limited Partnership does not have legal personality (rechtspersoonlijkheid) and as such cannot hold assets in its own name. Usually assets are held in economic terms by the Limited Partnership and are legally held by the general partner acting for and on behalf of the Limited Partnership. The limited partners are simply (silent) financiers of the partnership. Each general partner of the partnership is fully liable for any debts, but the limited partners are liable only to the extent of their partner’s contribution to the limited partnership.
A mutual fund (FGR)is a legal relationship between a fund manager (beheerder) and a depositary (bewaarder) governed by terms and conditions of management and custody to which investors may participate. The FGR has no legal personality and is not a partnership. The investments are held by the depositary at the expense and risk of the participants. After deduction of the costs of management and depositary, and any taxes, the investment income accrues to the participants by way of the increase in the value of their participation. It is best practice to separate the depositary function and the management function. In that case, the depositary continuously reviews whether the fund manager acts according to the mutual fund's terms and conditions. In general, the depositary function is exercised by a foundation, which ideally has been set up exclusively for that particular FGR. The fund manager function usually lies with a financial institution or with an independent asset manager.
Last modified 13 Mar 2025
No minimum capital requirements.
€45,000.
No capital requirements.
Nil/€45,000 (depending on which type of entity is used).
No minimum capital requirements.
No capital requirements.
Last modified 13 Mar 2025
€4,000 – €5,000.
€4,000 – €5,000.
€4,000 – €5,000.
€4,000/€5,000 (depending on which type of vehicle is used).
€4,000 – €5,000.
€4,000 – €5,000.
Last modified 13 Mar 2025
10– 15 days, although in theory this can be done more quickly, if needed.
10– 15 days, assuming bank account can be opened within this period.
10– 15 days, although in theory this can be done more quickly, if needed.
10– 15 days.
10 days.
10 days.
Last modified 13 Mar 2025
Considerable flexibility on corporate governance can be agreed on in the articles of association. It is possible to create different categories of shares with different rights. Non-voting shares and non-profit shares can be created. There are few restrictions on the allocation of voting and profit rights. Shareholders appoint and dismiss directors and may also have rights to approve management decisions, but the directors are responsible for day-to-day business decisions. The company can be managed either by a sole director or by a board of directors, and there can be a separate board of supervisory directors or a one tier board with executive and non-executive directors. A supervisory board or one tier board may be mandatory in certain specific circumstances. Legally, the board of directors can consist entirely of non-Dutch residents or – when it concerns executive directors – even legal entities.
Considerable flexibility on corporate governance can be agreed on in the articles of association. It is possible to create different categories of shares with different rights. There are few restrictions on the allocation of voting and profit rights. In principle, the shareholders appoint and remove the company directors. A sole director or board of directors manages the company. There may be a separate board of supervisory directors or a one tier board with executive and non-executive directors. A supervisory board or one tier board is often installed and may be mandatory in certain specific circumstances. Legally, the board of directors can consist entirely of non-Dutch residents or – when it concerns executive directors – even legal entities.
Considerable flexibility on corporate governance can be agreed on in the articles of association. It is possible to create different categories of memberships with different rights. Members appoint and dismiss directors and may also have rights to approve management decisions, but the directors are responsible for day-to-day business decisions. The Co-operative can be managed either by a sole director or by a board of directors, and there can be a separate board of supervisory directors or a one-tier board with executive and non-executive directors. A supervisory board or one-tier board may be mandatory in certain specific circumstances. Legally, the board of directors can consist entirely of non-Dutch residents or – when it concerns executive directors – even legal entities. Under certain circumstances a mandatory members’ committee is appointed to report on the annual accounts as prepared by the board of directors.
The corporate governance requirements depend on whether the entity is a B.V. or N.V.
Considerable flexibility can be given in the partnership agreement. There are few restrictions on the allocation of voting and profit rights. The unlimited partner is, by law, the general partner. Limited partners may have certain limited approval rights regarding management decisions. Too much influence by a limited partner on the partnership's management creates a risk that the limited partner might lose limited liability status.
There are no regulatory requirements for the establishment of a mutual fund (FGR) and it can therefore be flexibly structured. The FGR can be entered into by means of a private contract between a depositary (bewaarder), fund manager (beheerder) and its participants. The FGR has no regulatory publication obligations. The FGR can be structured to qualify as an open or closed FGR for tax purposes, see comments below under ‘taxation’.
Last modified 13 Mar 2025
€10,000 to €20,000
€10,000 to €20,000
€10,000 to €20,000
At least €12,000 to €20,000
€10,000
€10,000.
Last modified 13 Mar 2025
The applicable corporate income rate in 2024 is 19% for the first €200,000 and 25.8% thereafter. Financing costs, depreciation and other at arm’s length expenses are generally deductible from (rental) income.
Dutch real estate may be depreciated for tax purposes, generally based on a linear method taking into account a residual value and a 20-50 year depreciation method, until a certain floor value (bodemwaarde) for tax purposes is reached. Such floor value is set at 100% of the value for the purpose of the Valuation of Immovable Property Act (such floor value generally referred to as the WOZ–value in the Netherlands) applicable for each relevant year. The WOZ-value is set annually and determined by the municipality in which the real estate is situated on basis of comparable transactions (due to which, depending on the business cycle, the valuation may be lower (economic upturn) or higher (economic downturn) than fair market value. For newly developed real estate, the WOZ-value may be set conservatively in early years.
Interest expenses are only deductible within the limits of the Dutch implementation of the European Anti-Tax Avoidance Directive's interest deductibility rule. As a result, net interest expense are deductible up to the highest of 20% of the Company's EBITDA or €1 million. The Dutch government published the intention to abolish or limit the €1 million threshold for companies leasing real estate assets to third parties as of 1 January 2025. Typically for intragroup loans, other interest non-deductibility rules may apply as well. Furthermore, anti-base-erosion rules may limit the deductibility of interest paid on intra-group debt relating to certain transactions, subject to rebuttal (eg unless such interest is subject to sufficient (roughly 10%) effective taxation in the hands of the creditor or otherwise based on business considerations).
As of 1 January 2021, the Netherlands levies a conditional withholding tax on interest paid to related entities that are residents for tax purposes in a so-called low tax jurisdiction, are on the EU blacklist or in certain abusive situations. The rate of the conditional withholding tax is linked to the highest corporate income tax rate (25.8% in 2024).
General
Limited liability company (B.V.) and Public limited company (N.V.)
Co-operative
Dutch tax-resident shareholders
If the Dutch resident shareholder or member is an entity holding 5% or more of nominal paid-up share capital of a company or holds a membership right in the co-operative, (regardless to what extent the member is entitled to profits), the Dutch dividend withholding tax exemption should apply.
Non-Dutch tax-resident shareholders
If the shareholder or member is an entity, tax resident in the EU or EEA (Iceland, Norway and Liechtenstein) or jurisdiction which the Netherlands has concluded a double taxation treaty with, no Dutch dividend withholding tax applies, provided that the Dutch participation exemption would apply to the proceeds if such shareholder or member were a resident of the Netherlands, which generally is the case when holding a 5% or more shareholding or a membership of the co-operative. Specific rules apply when the shareholder or member is considered a hybrid entity (ie difference in qualification as tax opaque or tax transparent in jurisdiction of residence and the Netherlands)
The same anti-abuse rule applied to substantial shareholdings will apply to deny the aforementioned dividend withholding tax exemptions. This means the exemptions will be denied if the shareholding or membership is both held with the principal purpose, or one of the principal purposes, of avoiding the levy of dividend withholding tax and the shareholding is part of an artificial (non-genuine) structure or transaction or series of transactions.
Capital gains on the sale of real estate are taxed at the same rates as rental income (ie 19% for the first €200,000 and 25.8% thereafter). Capital gains are calculated as the difference between the sale price (fair market value) and the tax book value of the real estate.
Under circumstances, capital gains related to the sale of the Dutch real estate may be added to a reinvestment reserve (herinvesteringsreserve). This may result in the postponement of taxation on the capital gain by deducting the amount of capital gain from the tax book value of the Dutch real estate in which the qualifying reinvestment is made.
Capital gains on the sale of shares in a Besloten Vennootschap, a Naamloze Vennootschap or Co-operative
For corporate shareholders or members that are tax resident in the Netherlands, the participation exemption regime should generally apply if the shareholder holds a 5% or more of the nominal paid-up share capital of the B.V. or N.V. or the member holds a membership of the co-operative. Hence, capital gains realized on the sale of the shares in a B.V. or a N.V. or the termination or transfer of the membership in a co-operative should be exempt from corporate income tax.
Capital gains on the sale of shares in a BV or NV or the termination or transfer of the membership in a co-operative are subject to 25.8% Dutch corporate income tax, in case the shares constitute a 'substantial shareholding' (ie 5% or more) in the hands of the disposing shareholder or member, but only if the shareholding/membership is both held with the principal purpose, or one of the principal purposes, of avoiding the levy of Dutch personal income tax at the level of another person and the shareholding/membership is part of an artificial (non-genuine) structure or transaction or series of transactions.
The Netherlands may yet refrain from levying taxation on capital gains realized from the sale of a substantial interest under a relevant tax treaty, provided that the shareholder is resident in that other jurisdiction for tax purposes and is entitled to tax treaty benefits.
The fiscal investment vehicle (fiscale Beleggingsinstelling or FBI) is effectively corporate income tax exempt (ie 0% tax rate). It is a facility for individual shareholders to invest jointly in securities and real estate among others, without resulting into higher taxation, compared to when the individual shareholder invests directly without the interference of a fiscal investment institution. Thus, the FBI regime was introduced in the past to facilitate collective investment by preventing additional taxation at the level of the investment institution compared to direct investment.
As of 1 January 2025, the regime will be amended as a result of which it will no longer be possible for a FBI to invest directly in Dutch real estate (direct investment in foreign real estate remains possible). Such a real estate FBI will become a regular subject to corporate income tax. It remains allowed to invest directly in shares in a regular taxpaying subsidiary that holds real estate located in the Netherlands. This proposal aims to ensure corporate income taxation under all circumstances of profit derived from real estate.
Until 2025 (see below), a Limited partnership (CV) can be structured as either a transparent (closed) or a non-transparent (open) entity for Dutch tax purposes. An open limited partnership (open commanditaire vennootschap) is a limited partnership in which admission or substitution of the limited partners can take place without the prior written consent of all partners, general as well as limited. If a CV cannot be classified as an open CV, the CV should be deemed to be closed. Thus, a CV is deemed to be closed if the admission or substitution of a limited partner (apart from through inheritance or bequest) requires the unanimous consent of all general and limited partners.
If the CV qualifies as an open CV, the CV itself is liable to Dutch corporate income tax, as it is considered to be a non-tax-transparent entity for Dutch corporate income tax purposes. A closed CV, which is transparent for Dutch corporate income tax purposes, is not (itself) liable to Dutch corporate income tax, instead the profits will be allocated to the partners of the CV and taxed in accordance with the rules of their jurisdictions.
As of 1 January 2025, the open CV will be abolished (ie in principle all CVs will be treated as transparent for Dutch tax purposes).Transitional law is provided as of 1 January 2024.
In addition, as of 1 January 2022, a closed CV could become a taxpayer if it is a so-called ‘reverse hybrid entity’. This is the case if the partners of the closed CV considered the closed CV to be a taxpayer (opaque) and therefore do not treat the income and profits of the closed CV as the income and profits of the partners.
Until 2025 (see below), a mutual fund (FGR) can be structured as either a transparent (closed) or a non-transparent (open) entity for Dutch tax purposes. An open mutual fund (open fonds voor gemene rekening) is a FGR in which admission or substitution of the participants can take place without the prior written consent of all participants. A FGR is deemed to be a closed mutual fund (closed fonds voor gemene rekening) if the admission or substitution of a participant (except by inheritance or bequest) requires the unanimous consent of all participants. This consent does not have to be actively obtained. If for an admission or replacement to all participants' written consent has been requested, and that permission is not refused within four weeks, the permission may be assumed to have been granted. In addition, a closed FGR may repurchase its own participations.
If the FGR qualifies as an open FGR, the FGR itself is liable to Dutch corporate income tax, as it is considered a non-transparent entity for Dutch corporate income tax purposes. A closed FGR, which is transparent for Dutch corporate income tax purposes, is not (itself) liable to Dutch corporate income tax, instead the profits are allocated to the participants of the closed FGR and taxed in accordance with the rules of their jurisdictions.
As of 1 January 2025, a mutual fund only qualifies as a tax opaque FGR if, amongst others, such fund is a qualifying fund under the Dutch Financial Supervision Act (implementing the AIFMD). Any other mutual investment fund will generally be considered a tax transparent fund for Dutch tax purposes.
Last modified 13 Mar 2025
Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?
From a legal perspective the concept of a permanent establishment does not automatically apply when a foreign person invests in real estate. It is possible for foreign legal entities to set up a permanent establishment by means of registering a branch office. Such branch office is not a separate legal entity.
However, from a Dutch corporate income tax perspective a foreign person investing in Dutch real estate is deemed to havea permanent establishment, irrespective of an actual registration of a branch office, therefore giving rise to Dutch corporate income tax liability,
Registration of a branch office costs €4,000 – €5,000 and it takes 10 days.
The branch office is not a separate legal entity and therefore the governing law of the foreign legal entity applies to the branch office in respect of all corporate legal matters (such as liability of the shareholders, charter documents, responsibility of directors and capital requirements), and if the foreign legal entity under its governing law is required to file annual accounts in its country of origin, then such annual accounts shall also be filed for the branch office with the Dutch Trade Register.
Last modified 13 Mar 2025