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Branch vs. Subsidiary in the Netherlands

Which Business Structure Is Right for You?

When expanding your business to the Netherlands, one of the first strategic decisions is choosing between setting up a branch or a subsidiary (Dutch B.V.). Both options allow you to operate legally in the Dutch market, but they differ in structure, legal status, tax treatment, and administrative obligations.

At Nexpat, we help expats, founders, and international businesses choose the right setup—based on your operations, legal preferences, and long-term strategy.

Subsidiary (Dutch B.V.) or Branch: What’s the Difference?

Aspect Dutch Subsidiary (B.V.) Dutch Branch (of a Foreign Company)
Legal Entity A separate Dutch legal entity Not a legal entity; part of the foreign company
Formation Requires a notarial deed and articles of association No notarial deed required
Registration Must be registered with the Dutch Chamber of Commerce and Dutch Tax Authorities Must also register with both authorities
Liability Limited to the capital contributed to the B.V. Foreign parent company is fully liable for branch debts
Reputation Highly regarded, internationally recognized structure Reputation depends on the home country of the foreign entity
Tax Treaties Access to Dutch double taxation treaties Typically no treaty access, with some exceptions
Corporate Income Tax Taxed on worldwide income (relief available via treaties) Taxed only on Dutch-source income via a fixed place of business
Dividend Withholding Tax Subject to 15% withholding tax (often reduced) No dividend tax as there are no share distributions
Financing Based on the B.V.’s own creditworthiness Based on the foreign parent’s credit profile
VAT (BTW) Subject to VAT; services to the parent are taxed Subject to VAT, unless it’s a representative office
Wage Tax Must register and withhold wage tax for employees Same, unless it qualifies as a representative office
Annual Maintenance Annual financial statements and tax filings required Minimal KvK filings; corporate tax returns still required
Selling the Business Parent may sell the shares in the B.V. Sale of branch requires asset-by-asset transfer

Download our branch vs subsidiary guide here.

When Should You Choose a Dutch B.V. (Subsidiary)?

A Dutch B.V. is generally the preferred structure for:

  • Holding, financing, and IP ownership structures

  • Businesses requiring independent legal liability

  • Companies seeking access to Dutch tax treaties

  • Long-term presence in the Netherlands with local operations

  • Enhancing international credibility with a Dutch entity

The Dutch B.V. is a flexible and well-regarded legal form and is the most commonly used structure by foreign investors in the Netherlands.

When Is a Dutch Branch a Better Fit?

A branch may be the right choice if you:

  • Want a lightweight market entry or representative presence

  • Already operate a foreign company and wish to avoid forming a new entity

  • Need to invoice locally or hire staff without full incorporation

  • Prefer lower administrative and compliance obligations (in the short term)

Keep in mind: A branch does not provide limited liability and generally lacks access to Dutch tax treaties.

Representative Office: A Lighter Option?

If you only need a presence for marketing, research, or liaison activities, a representative office may suffice. This setup:

  • Has no commercial activity or contractual powers

  • Is not subject to VAT or corporate income tax

  • Is often not considered a branch for legal and tax purposes

Let us know if this structure suits your needs—we’ll help you register and stay compliant.

Need Help Deciding?

Choosing between a Dutch branch and subsidiary can have major implications for:

  • Tax exposure

  • Legal liability

  • Banking and financing

  • Reputation and client perception

  • Future business structuring (e.g. exit, restructuring, or expansion)

At Nexpat, we offer objective, practical advice tailored to your situation. We’ll help you compare both options and choose the structure that fits your business goals—whether you’re a solopreneur, tech founder, or global company expanding into the Netherlands.

Let’s Talk

📞 Contact us today to schedule a consultation.
We’ll explain the process, handle the paperwork, and set up your Dutch business structure with confidence and compliance.

🔗 Ready to get started? Visit our Branch Registration or B.V. Incorporation pages.