Dutch Company Formation

Dutch Company Formation

Lower corporate income tax rates, as well as new state initiatives that aim at reducing the chance of customer non-payment and create Dutch Company Formation, an increasingly appealing proposition.

The Netherlands has long been an ideal destination for investors from abroad, and the new policies of the government increase the attraction for businesses who are considering establishing operations in Holland. Because of the stability and success of the economy as well as an investment and trade policy that is among the most transparent around, many multinational companies have experienced the numerous advantages of company Incorporation within the Netherlands.

Netherlands Corporate Tax Income Lowered to 20%

To stimulate the economy, corporation income tax rates were reduced to 20% for the first EUR200,000 of profits in 2009 and 2010. Any additional earnings will be taxed at 25.5 percent.

Due to the growing competition between nations in Europe to draw overseas investors, it’s anticipated that corporate income taxes will remain low in the years following the year 2010. At present, the Netherlands is among the lowest corporate taxes in Western Europe, which demonstrates their determination to attract more Dutch Company Formation investment.

The Netherlands Is a Tax Paradise

While Dutch employees might not be able to be on the same page but it is true that the Netherlands is a paradise for taxation for companies from abroad who want the company Incorporation.

The main reasons for this are:

Dividends and capital gains of subsidiaries aren’t taxed.
There are no withholding tax withholdings on interest payments and royalties.
Tax treaties signed with more than 90 countries lower dividend withholding tax, typically to the smallest amount!
Decisions made by The Dutch tax authorities provide assurance regarding (low) the taxation you pay for your earnings. Income earned from group finance activities is taxed at just 5percent (“group interest box”)
The attractively low corporate tax rate of just 20 percent (profits more than EUR200,000 25.5%)
The 30% facility significantly reduces wage tax for workers who are expatriates.
Regular importers have not required the obligation to cover VAT for their purchases (“article 23 of the facility”)
Non-working partners of expatriate workers receive a tax refund each year that exceeds EUR2,000.
It is evident that the Netherlands will welcome foreign investors looking to Dutch Company Formation as part of their expansion plan.

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Dutch government offers an additional guarantee in case of non-payment

Because of the current economic downturn, the possibility of non-payment by businesses has increased. In the aftermath, credit insurers have reduced the maximum limits of insured credit. This obviously hinders business-to-business transactions. To encourage trade activity, it is the Dutch Government has introduced interim state insurance.

Companies that have insurance policies for credit may now apply for an increase in the credit limit. The government can cover up to two times the new amount of insurance coverage, but it is not greater than the original credit limit.

For instance:

A credit insurance company reduces the credit limit for customers by a factor varying from EU70,000 up to. If that happens, your business could apply for an extra credit limit covered by the state that is EU30,000. In order to secure this coverage, an additional premium needs to be paid. The insurance company will provide you with the information.

The state insurance supplement protects trade between the country and abroad and is valid through the end of 2009. This is a positive move that can help increase the appeal of Dutch Company Formation, an even more appealing proposition to prospective foreign investors.

If you’re contemplating the possibility of incorporating a company Incorporation within the Netherlands, there is never a better time to consider the decision.



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