A registered address and a professional director are legal in both countries when they come from a regulated provider. In the Netherlands, acting as director and offering an address with extra services are trust services that need a DNB licence. In Luxembourg only banks, financial professionals, lawyers, auditors and chartered accountants may domicile a company, under a written agreement. The real owner is always the registered UBO. Tax residence and bank accounts depend on where the board really decides.
Resident directors and domiciliation: what the words mean
Founders who set up a Dutch B.V. or a Luxembourg SARL from abroad usually hear three terms in the first call: domiciliation, resident director and nominee. They are often sold as one package, and they are not the same thing.
Domiciliation means the company uses the address of a service provider as its registered office. In Luxembourg it is a regulated activity reserved to certain professionals. In the Netherlands the address alone is free, but an address combined with other services is a trust service that needs a licence.
A resident or independent director is a professional who sits on the board, takes part in decisions and signs on behalf of the company. He or she is a real director with real liability. A nominee in the bad sense is a straw man: a name on the register who signs whatever is sent, while the owner stays out of sight. The first is a recognised service in both countries. The second is a fast route to a frozen bank account, a lost tax treaty and personal liability for everyone involved.
This note explains what the law allows in 2026, what the banks and tax authorities check, what a professional director actually does and how to choose between options. A checker at the end tells you what your company needs.
Wtt 2018
Directors and domicile-plus are trust services; DNB licence needed.
Law of 1999
Only regulated professionals may domicile; written agreement required.
UBO registers
The real owner is registered, never the nominee.
Substance
Decisions taken locally, by people who can say no.
Netherlands: the Trust Offices Supervision Act 2018
The Dutch rules are in the Wet toezicht trustkantoren 2018 (Wtt 2018), in force since 1 January 2019. A firm that provides a trust service on a professional basis needs a licence from De Nederlandsche Bank (DNB). Working without one is an economic offence, and DNB publishes enforcement decisions, including orders for incremental penalty payments.
DNB lists five trust services:
| Trust service | What it covers |
|---|---|
| Acting as director or partner | The provider, or a person working for it, sits on the board of the client company |
| Domicile plus | A registered or postal address combined with at least one extra service: legal advice, tax returns, bookkeeping, preparing accounts or finding a director |
| Selling or intermediating legal entities | Bringing about the sale of companies to clients; a one-off referral is not intermediation |
| Acting as trustee | Managing a trust, for example a share portfolio, under a trust deed |
| General powers of attorney | Holding a power to perform general management acts, including a private power of attorney |
Three practical consequences follow. First, an address on its own (domicilie sec) is not a trust service. Many business centres in Amsterdam and Rotterdam sell exactly that, without a licence, and it is legal. Second, the moment the same provider adds bookkeeping, tax returns or finding a director, the package becomes a trust service. A provider who does that without a licence is in breach, and the client company is left with an unstable set-up.
Third, a licensed trust office may not provide trust services and tax advice to the same client. DNB states it plainly. The rule was designed to stop trust offices from designing structures and then running them. If one firm offers you a director, an address and the tax plan, ask which entity does what.
A licensed trust office must also carry out client due diligence before it accepts you: identity of the owners, source of funds, the purpose of the company and an assessment of integrity risk. It must refuse or end the relationship if it cannot complete that review. Expect questions about your business, your other companies and where the money comes from. A provider who asks none of them is not one you want on your board.
UBO register. Dutch companies register their ultimate beneficial owners with the Chamber of Commerce (KVK). Public access was stopped after the EU Court of Justice judgment of 22 November 2022. The amending act restricting access was adopted by the Senate on 8 July 2025: authorities, institutions with anti-money laundering duties, such as banks and notaries, and persons with a legitimate interest keep access. The duty to register the real owner did not change.
Law and practice: Wet toezicht trustkantoren 2018 and the Besluit toezicht trustkantoren 2018 (Article 2 on general powers of attorney); DNB guidance 'Wat is een trustdienst' (dnb.nl); Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) and the Commercial Register Act 2007 for the UBO register; Wijzigingswet beperking toegang UBO-registers, adopted on 8 July 2025.
Luxembourg: the domiciliation law and the RBE
Luxembourg regulates the address rather than the director. Under the law of 31 May 1999 on the domiciliation of companies, a company may establish its registered office with a third party only if that third party is a credit institution, another financial or insurance sector professional, a lawyer on List I or List IV of the Bar, a company auditor, an approved statutory auditor or a chartered accountant. A financial sector professional acting as domiciliation agent needs CSSF approval.
The domiciliary agent and the company must sign a written domiciliation agreement. For financial sector professionals the CSSF sets minimum content: the person in charge at the agent, the services and their cost, rights and duties of both sides, anti-money laundering obligations, the means of communication, duration and termination, and Luxembourg law as governing law.
- Before signing, the agent verifies that the head office meets the legal requirements and identifies the members of the company's governing bodies.
- During the agreement, the agent keeps the documents up to date and holds them for five years after it ends.
- If the company breaks company or establishment law, the agent may terminate at once by registered letter, and the termination takes effect when filed with the RCS.
- Without a valid agreement, the company can be dissolved and shut down by the court, and acting as an unauthorised agent is a criminal offence.
Directors are not licensed as such in Luxembourg, but anyone offering directorships as a business is either a regulated professional or needs a business permit. An operating company also needs its own business permit, which requires a manager with professional integrity and a real fixed establishment in Luxembourg. A domiciliation address does not count as one, so a trading SARL needs more than a mailbox.
RBE. Every company files its beneficial owners in the Register of Beneficial Owners within one month of incorporation and of every change. Public access has been restricted since the 2022 judgment, but professionals and authorities still consult it, and the domiciliary agent checks it against its own file.
Law and practice: Law of 31 May 1999 on the domiciliation of companies; CSSF Circulars 01/28 and 02/65 on domiciliation agreements; guichet.public.lu, 'Domiciliation of companies'; Law of 2 September 2011 on the right of establishment; Law of 13 January 2019 establishing the Register of Beneficial Owners.
Why a straw-man nominee is dangerous
The nominee model comes from offshore practice: a local name on the register, a pre-signed resignation letter in the drawer and a general power of attorney for the owner. In the Netherlands and Luxembourg in 2026 that model fails on four fronts at once.
- Beneficial ownership. Both registers require the individual who ultimately owns or controls the company. A nominee shareholder or director does not change who the UBO is. Filing the wrong person is a breach with fines, and banks compare the register with their own file.
- Tax residence. A Dutch or Luxembourg company is resident where it is incorporated, but treaties and foreign authorities look at where effective management takes place. If every decision is made by the owner in another country, that country can claim the company as its resident and tax its profit, and the treaty benefit you wanted falls away.
- Banks. Banks interview the directors, read the minutes and ask who gives instructions. A director who cannot explain the business is a red flag that ends onboarding or leads to an exit later.
- Liability. A person who in fact runs the company can be treated as a de facto director. In a bankruptcy the owner who gave the instructions and the nominee who followed them can both be liable.
The pre-signed undated resignation letter deserves a separate word. It suggests that the director is not free to decide, which is exactly what a tax inspector or a bank looks for. Professional directors in both countries refuse it.
A founder resident outside the EU sets up a Dutch B.V. to hold shares in an operating company in Eastern Europe. The B.V. has a Dutch address and a nominee director who signs dividend resolutions emailed by the founder. The source country refuses the reduced withholding rate under the treaty: the B.V. has no staff, no local decisions and no say over the dividend it passes on. The 10% saving on a EUR 400,000 dividend, EUR 40,000, is lost, and the tax authority opens an inquiry into the founder's other companies.
Law and practice: EU Anti-Money Laundering Directives and Regulation (EU) 2024/1624 on beneficial ownership; principal purpose test in Article 7 of the Multilateral Instrument as applied in Dutch and Luxembourg treaties; OECD Model Convention, Article 4(3) and Commentary on place of effective management.
Directors' liability: what the professional director accepts
A professional director takes personal risk, which is why a good one is selective about clients. The rules are similar in both countries.
| Netherlands (B.V.) | Luxembourg (SARL, SA) | |
|---|---|---|
| Towards the company | Art. 2:9 BW: improper performance, where the director can be seriously blamed; collective board duty | Art. 441-9 of the 1915 law (applied to SARL managers by Art. 710-16): management faults under general law |
| Breach of law or articles | Covered by Art. 2:9 BW and tort | Art. 441-9, second paragraph: joint liability to the company and third parties, with a rebuttable presumption |
| In bankruptcy | Art. 2:248 BW: manifestly improper management in the three years before bankruptcy; presumed if books or accounts filing were neglected | Art. 495-1 Commercial Code: serious faults that contributed to the bankruptcy |
| Tax and social security | Liability for unpaid wage tax and VAT if non-payment is not reported in time | Liability of managers for unpaid withholding taxes under the tax law |
Two points matter in practice. First, Dutch liability is collective: each director answers for the whole board unless he or she can show that the matter was not attributable to him or her and that he or she was not negligent in taking measures. A local director who never asks questions shares the owner's risk. Second, in both countries late or missing annual accounts are dangerous. In the Netherlands a failure to file is a statutory presumption of improper management in a bankruptcy.
That is why professional directors insist on information rights, sign-off on large transactions and directors' and officers' insurance. Read their engagement letter carefully: a reasonable director wants to be informed, not to run the business.
Law and practice: Dutch Civil Code, Book 2, Articles 2:9, 2:10, 2:248 and 2:394; Collection of State Taxes Act 1990, Article 36; Luxembourg Law of 10 August 1915, Articles 441-9 and 710-16; Commercial Code, Articles 444-1 (director bans) and 495-1.
What a professional independent director actually does
A good independent director is a board member, not a signatory. In a typical holding or financing company the year looks like this:
- Board meetingsUsually four a year, held physically in the Netherlands or Luxembourg, with an agenda and papers sent in advance.
- DecisionsApproving dividends, loans, share acquisitions and the annual accounts after reviewing the figures, not before.
- MinutesWritten records showing what was discussed, the alternatives and why the board decided; the minutes are the first document a tax inspector requests.
- ContractsReviewing and signing material agreements in the country, so the place of signature matches the place of decision.
- ComplianceChecking the UBO filing, annual accounts, tax returns and, in Luxembourg, the domiciliation file.
The board should be balanced. A common Luxembourg structure has class A managers (the owner or group representatives abroad) and class B managers (resident professionals), with a signature from each class required. It works only if the class B managers have real input. In the Netherlands, a B.V. often has a local director alongside the foreign founder, and the articles reserve key decisions to the board as a whole.
Tax on directors' fees. In Luxembourg, directors' fees (tantièmes) carry 20% withholding tax, 25% if the company bears the tax. For a non-resident director without other Luxembourg income and with fees up to EUR 100,000 a year, the withholding is normally final. On VAT, Circular 781-2 of 11 December 2024, following the EU Court of Justice judgment of 21 December 2023 (C-288/22), treats directors who personally receive the fee as not acting independently, so their fees fall outside VAT. Fees invoiced by a company that makes an employee available as director remain subject to 17% VAT.
In the Netherlands, fees paid to a director of a Dutch B.V. are usually taxable in the Netherlands under the directors' fees article of the treaties, and a non-resident director can fall under Dutch wage tax. Our note on the non-resident director of a Dutch B.V. explains salary and substance; the Luxembourg note covers foreign managers.
Costs, in general terms. A professional director charges an annual fee per mandate, higher for operating companies, regulated activities and complex groups. Domiciliation is a separate fee. Ask what is included: number of meetings, minutes, travel, review of contracts and insurance. Very cheap offers usually mean very little director.
Law and practice: Luxembourg Income Tax Law, Article 152 (withholding on directors' fees); AED Circular 781-2 of 11 December 2024; CJEU 21 December 2023, C-288/22; OECD Model Convention, Article 16; Dutch Wage Tax Act 1964.
How substance is assessed, with examples
There is no single substance test. Tax authorities, treaty partners and banks look at the facts as a whole: who decides, where, with what information and with what resources. Our pages on Dutch substance requirements and Luxembourg substance requirements go through the points one by one.
The EU's planned Unshell Directive, which would have set mechanical substance indicators, was abandoned: the ECOFIN Council confirmed on 20 June 2025 that work on it would stop. That does not lower the bar. Treaty partners apply the principal purpose test, source countries ask for proof of beneficial ownership, and the national anti-abuse rules remain.
| Indicator | Weak | Strong |
|---|---|---|
| Board | Owner abroad decides; local director signs | Majority of directors resident; meetings held locally |
| Minutes | Template text, signed by email | Discussion of figures, alternatives and risks |
| Bank account | Only abroad | In the country, run by the local board |
| Office | Domicile address only | Domicile with a meeting room, or own office for operations |
| People | None | Staff or outsourced functions under the board's control |
| Equity and risk | Back-to-back flows | Own capital at risk, consistent with functions |
A family resident in Germany owns a Luxembourg SARL that holds shares in three EU companies. The SARL has two class A managers in Germany and two class B managers in Luxembourg, domiciliation with a chartered accountant, four board meetings a year in Luxembourg and a Luxembourg bank account. Dividends from the subsidiaries are exempt under the participation exemption, and the minutes show the board reviewing each dividend and the reinvestment plan. That is a set-up that survives a request for information.
An entrepreneur from outside the EU sells software services through a Dutch B.V. He lives abroad and runs the business himself. A trust office provides one director and domicile plus bookkeeping under its DNB licence. Because the real management sits with the owner, the B.V. accepts that its profit may also be examined abroad and focuses on Dutch operations: a Dutch employee, customer contracts signed in the Netherlands and a Dutch bank account. Substance follows the business, not the address.
Law and practice: ECOFIN report of 20 June 2025 on the Unshell proposal; Luxembourg Income Tax Law, Article 166 (participation exemption) and Section 6 of the Tax Adaptation Law (StAnpG) on abuse of law; Dutch Corporate Income Tax Act 1969 and the general anti-abuse doctrine of fraus legis; principal purpose test in the Multilateral Instrument.
What does your company need?
A first orientation. The final set-up depends on your business, the bank and the provider's due diligence.
Domiciliation and local directors: what your company needs
Four questions. You see the services you need, the legal requirements behind them and the red flags to avoid.
Domiciliation gives an address, not tax residence.
DNB licence in NL; regulated professional in LU.
UBO and RBE always show the true owner.
Minutes, meetings and a director who can say no.
Nominee directors and domiciliation: frequent questions
Is a nominee director legal in the Netherlands or Luxembourg?
A professional director is legal in both countries if a licensed or regulated provider acts in good faith, decides on the merits and the real owner is disclosed. In the Netherlands, acting as a director for a client company is a trust service that needs a DNB licence. What is not legal is a straw man who signs on instruction and hides the owner from the register, the bank or the tax authorities.
Can I use a virtual office as the registered address of a Luxembourg company?
Only through a domiciliation agent who is a regulated professional: a bank or other financial sector professional, a lawyer, an auditor or a chartered accountant. A written domiciliation agreement is compulsory. A simple mailbox from a commercial provider without that status does not meet the law of 31 May 1999.
Can a Dutch company use an address without other services?
Yes. Domicile on its own, without additional services, is not a trust service under the Wtt 2018. Once the provider adds bookkeeping, tax returns, legal advice or finding a director, the package is a trust service and the provider needs a DNB licence.
Does an independent director make my company tax resident?
Not by appointment alone. The tax authorities look at where the key decisions are actually taken. A local director who rubber-stamps decisions made abroad gives little protection; a board that meets locally, reads the papers and can refuse a transaction does.
Who is the UBO if a nominee holds the shares?
The individual who ultimately owns or controls the company, not the nominee. Both the Dutch and the Luxembourg registers require the real beneficial owner, and filing the nominee instead is a breach with fines and possible criminal liability.
Is VAT charged on directors' fees in Luxembourg?
Since Circular 781-2 of 11 December 2024, directors of a Luxembourg SA who personally receive the fee are treated as not acting independently, so their fees fall outside VAT. Fees invoiced by a company that makes an employee available as director remain subject to 17% VAT. The fees carry 20% withholding tax.
What does a professional director cost?
It depends on the company's activity, risk and number of meetings. Expect an annual fee per director plus the domiciliation fee; a licensed provider quotes after its client due diligence. Compare offers on what is included: meetings, minutes, review of contracts and liability insurance.