Luxembourg or the Netherlands: which holding costs your group less?
Both countries exempt dividends from subsidiaries and both have large treaty networks. The difference is in the details: how much you own, how long you keep it, and who sits above the holding. Answer six questions and see which country wins for your case.
We set up holdings in both countries, so we have no reason to push either.
Six questions, one answer
Change any answer and the result updates. Most cases are decided by questions 2, 5 and 6, not by the headline tax rate.
1. What will the holding do?
An indication based on domestic law in both countries, not tax advice. It assumes a corporate owner is fully taxed where it sits, has real substance and holds at least 10% (25% for two years for Switzerland). Treaty rates can lower the 15% for individuals. We confirm every figure before you rely on it.
Luxembourg and the Netherlands in eleven rows
Rules in force for 2026. Every 0% depends on conditions, and the conditions are where the two countries differ.
Four questions matter more than the tax rate
A working holding pays almost no tax on its main income in either country, so the headline rate rarely decides anything. These four points do.
What the holding is for
Investor money that is pooled and returned points to Luxembourg, where the SCSp and RAIF are the standard. A group of operating companies usually runs more simply through a Dutch B.V.
How much you own, and for how long
The Dutch exemption starts at 5% from day one. Luxembourg needs 10% or EUR 1.2m, held for 12 months. For minority stakes and quick sales, the Netherlands wins.
Who sits above the holding
A company in the EU or a treaty country gets 0% from either. Owners in Australia, low-tax countries or individuals split the two sharply.
How the money comes out
Luxembourg does not withhold tax on liquidation proceeds. The Netherlands taxes the surplus above paid-in capital as a dividend. For owners without an exemption, Luxembourg is the cleaner exit.
Where is the holding's owner?
Tax withheld on a dividend from the holding to its owner. Company rates assume the owner is fully taxed where it sits and meets the holding conditions.
Four cases where the obvious answer is wrong
We see these on first calls every month. Each one costs real money if nobody checks.
“We have a US parent, so it must be the Netherlands.”
A US company holding 10% of a Luxembourg SOPARFI for 12 months already gets 0% under Luxembourg law, without the treaty's limitation-on-benefits test. The US case is decided elsewhere.
“Luxembourg is the bigger centre, so it is safer for a minority stake.”
A 7% stake bought for EUR 800,000 fails both Luxembourg tests, so only half of its dividends can be exempt. In a Dutch B.V. the same stake is fully exempt from day one.
“Our parent is in a zero-tax country, so the Netherlands keeps leakage down.”
Since 2024 the opposite is true: 25.8% conditional withholding against 15% from Luxembourg. The real fix is at the top of the chain.
“Australia is a treaty question, and Luxembourg has more treaties.”
Luxembourg has no treaty with Australia, so an Australian parent pays 15%. From a Dutch B.V. it can receive dividends at 0%.
One adviser for both countries
We compare, recommend and then set up the holding where it works best. The fee is fixed before we start.
- ✓
Both countries modelled
Your structure run through Luxembourg and Dutch rules before you choose.
- ✓
Treaty and exemption check
Every flow from subsidiary to owner, with conditions.
- ✓
Holding formation
A SOPARFI in Luxembourg or a B.V. in the Netherlands, notary included.
- ✓
Share transfer
Your existing companies moved under the new holding.
- ✓
Local director
A resident director through licensed providers, where substance needs one.
- ✓
Registered office
An address through a licensed domiciliation agent.
- ✓
Bank file
Prepared for banks that accept your owners and business.
- ✓
Annual running
Accounts, tax returns and board minutes each year.
Is Luxembourg or the Netherlands cheaper for a holding?+
For most groups the tax on the holding's main income is zero in both. The real cost differences are withholding on payouts, Luxembourg's minimum net wealth tax and the cost of local substance. The decider above shows the withholding side for your case.
Which is better for a US parent company?+
Both usually give 0% on dividends to a US corporate parent. The choice is made by what the holding is for and how you plan to exit, not by the treaty.
Which is better for individual owners?+
Both withhold 15% on dividends to individuals, often reduced by treaty. Luxembourg does not withhold on liquidation proceeds, which can make the exit cleaner.
Do I need substance in either country?+
Yes. Both countries and the banks expect local directors who really decide and a real office. We arrange this through licensed providers.
Can you set up the holding in either country?+
Yes. We form SOPARFIs in Luxembourg and B.V.s in the Netherlands, and run them afterwards. We recommend the one that fits, not the one we sell.